IDOX PLC Year End Trading Update (5496I)
November 27 2018 - 2:01AM
UK Regulatory
TIDMIDOX
RNS Number : 5496I
IDOX PLC
27 November 2018
27 November 2018
Idox plc
('Idox' or the 'Group' or the 'Company')
Year End Trading Update
ldox plc (AIM: IDOX), a leading supplier of specialist
information management solutions and services, today issues a
trading update for the twelve months ended 31 October 2018.
The Group continues the transition to fully consolidate prior
year acquisitions and refocus operations on our core profitable and
cash generative activities to maximise shareholder value. As
announced on 2 November 2018, the Group took the strategic decision
to dispose of its loss-making Digital business.
The Group expects to report:
-- consolidated revenues for the continuing business (excluding
our Digital business disposed of on 2 November 2018) of GBP67.2m
(2017: GBP73.5m restated). Consolidated revenues for the full year
of all Group operations including our disposed Digital Business are
expected to be GBP73.6m (2017: GBP86.3m restated).
-- adjusted EBITDA for the continuing business (excluding our
Digital business disposed of on 2 November 2018) of GBP14.4m (2017:
GBP16.7m restated). Adjusted EBITDA for the full year of all Group
operations including our disposed Digital Business is expected to
be GBP11.5m (2017: GBP16.1m restated).
-- net debt position at 31 October 2018 of GBP31.7m (2017:
GBP32.8m) comprising cash of GBP5.5m, third party borrowings of
GBP25.7m and long term 2025 bond of GBP11.5m (2017: cash of
GBP3.3m, third party borrowings of GBP24.7m and long term, 2025
bond of GBP11.4m)
The Group has appointed a new leadership team to drive value in
the business with the appointment of Chris Stone as Non-Executive
Chairman, Dave Meaden as Chief Executive Officer and Rob Grubb as
Chief Financial Officer.
The Group has made progress with its core business in adjusting
revenue profiles to align with the performance obligations of the
services and solutions we deliver to our customers. The Group has
also been focused on reducing the cost base to more appropriately
match our business model to drive increased profitability and
tightly manage working capital to ensure improved cash
conversion.
The following provides an update on all these objectives, and
excludes the Digital business to illustrate trends in the remaining
core businesses of the Group going in to FY2019:
-- Exit annualised recurring revenue run rate as at 31 October
2018 was GBP32.4m (as at 31 October 2017: GBP33.4m restated).
Sustaining and improving levels of recurring revenues remains a
priority.
-- Our contracted order book for software and services has
nearly doubled to GBP9.4m at 31 October 2018 (2017: approximately
GBP4.0m), an increase of GBP5.4m reflecting revenue recognition
commensurate with our performance obligations.
-- Trade debtors and accrued income was GBP30.8m at 31 October
2018 (2017: GBP39.0m restated). The Group has a clear objective to
reduce this further going into FY2019 and achieve higher cash
conversion from its previous and ongoing activities.
-- Our preparation for IFRS 15 has led to detailed review of how
we recognise revenue in line with our performance obligations. As a
result, it is anticipated that recurring revenues will form a
higher proportion of the Group's revenues going forward compared to
previous years.
-- The majority of cost cutting during the year occurred in the
now disposed Digital division. As part of the focus on increased
profitability, costs in the continuing business (including
employment costs, travel, marketing and other overheads) have
reduced by GBP1.7m for the year ended 31 October 2018 to GBP44.0m
(2017: GBP45.7m). This trend is expected to continue in to FY2019
and beyond as the Group adjusts its cost base to align more
directly with its re-focused business model and drive increased
profitability.
The Group expects to issue its FY2018 preliminary results
announcement in February 2019.
Adjusted EBITDA is defined as earnings before amortisation,
depreciation, restructuring, acquisition, corporate finance and
share option costs.
David Meaden, Chief Executive of Idox, commented:
"FY2018 has seen a number of changes in the Idox business, but
we end the financial year in a stronger position than we entered it
and I am confident in our new leadership and team to deliver
success in FY2019.
We continue to work hard to fully integrate prior year
acquisitions and refocusing operations on our intellectual property
and profitable cash generative activities.
I am excited by the prospects for the business in FY2019 and
future periods as we begin to reap the benefits of these ongoing
efforts."
-Ends-
This announcement is released by Idox plc and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 ("MAR"), encompassing information relating
to the trading update described herein, and is disclosed in
accordance with the Company's obligations under Article 17 of
MAR.
Enquiries:
Idox plc +44 (0) 870 333 7101
David Meaden, Chief Executive
Rob Grubb, Chief Financial Officer
N+1 Singer (NOMAD and Broker) +44 (0) 20 7496 3000
Shaun Dobson / Jen Boorer (Corporate
Finance)
Tom Salvesen (Corporate Broking)
About Idox plc
For more information see www.idoxplc.com @Idoxgroup
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END
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