IDOX Idox Plc

28 January 2025

Idox plc

('Idox' or the 'Group' or the 'Company')

FY24 Results

"A strong performance in line with expectations with 20% growth in revenue"

 

Idox plc (AIM: IDOX), a leading supplier of specialist information management software and geospatial data solutions to the public and asset intensive sectors, is pleased to report its financial results for the year ended 31 October 2024.

 

Financial highlights

Reconciliations between adjusted and statutory earnings are contained at the end of this announcement.

Revenue

·      Revenue increased by 20% to £87.6m (2023: £73.3m), driven by growth in the Land, Property & Public Protection (LPPP) division, including a full year's contribution from Emapsite.

·      Recurring revenue¹ increased by 20% to £54.5m (2023: £45.5m), accounting for 62% of the Group's total revenue (2023: 62%).

Profit: Adjusted

·      Adjusted² EBITDA increased by 7% to £26.1m (2023: £24.5m).

·      Adjusted² EBITDA margin was as anticipated at 30%, principally driven by mix changes (2023: 33%).

·      Adjusted³ diluted EPS stable at 2.61p (2023: 2.62p).

Profit: Statutory

·      Statutory operating profit increased by 7% to £10.0m (2023: £9.3m).

·      Statutory operating profit margin was 11% (2023: 13%).

·      Statutory profit before tax increased by 3% to £8.1m (2023: £7.8m).

·      Statutory diluted EPS decreased by 7% to 1.15p (2023: 1.23p).

Cash and debt

·      Net debt⁴ at 31 October 2024 was £9.9m (2023: £14.7m).

·      Cash generated from operating activities before taxation was up 26% at £25.2m (2023: £20.1m) and represented 96% of Adjusted EBITDA (2023: 82%).

·      Free cashflow⁵ generation was up 27% at £11.6m (2023: £9.1m).

·      Extension of banking facilities completed in October 2024, providing the Group with significantly increased resources to fund strategic M&A ambitions: £75m revolving credit facility and £45m accordion through to October 2027.

Dividend

·      Proposed final dividend increased by 17% to 0.7p per share (2023: 0.6p), reflecting our strong financial position and our confidence in the future.

 

 

Operational highlights:

·      Record full year order intake up 23% on FY24 to £102m, reflecting our high-quality customer base and providing good visibility into FY25, including recently announced contract wins with North Yorkshire Council and Malta.

·      Strong performances in LPPP through our local Government, Cloud and geospatial capabilities. Good performance in Communities aided by the successful delivery of UK election services in 2024. An overall stable revenue performance in Assets.

·      Recent acquisition strategy coupled with existing capabilities has created a strong geospatial offering which leaves the Group well placed for further growth opportunities in this sector through the leadership of a newly appointed head of geospatial.

·      Further investment with Board and senior appointments in People, and Revenue & Strategy functions to support our well established divisional structure.

·      Continued investment and growth in India based operations providing increased levels of services, support and customer satisfaction.

 

David Meaden, Chief Executive of Idox said:

 

"We are pleased to have delivered a strong performance in 2024, featuring a 20% growth in revenue and increased Adjusted EBITDA. We have made an encouraging start to FY25, with trading in line with the Board's expectations.

 

Our most recent acquisition, Emapsite, has added significant scale and expertise to our existing geospatial data capabilities, and has performed well in the year. We continue to be excited by the growth opportunities available in this sector, adding to our existing market leading public software capabilities. We continue to evaluate the opportunity for further acquisitions to enhance our offering and are optimistic on the pipeline as we move into 2025.

 

The Group's longer-term outlook remains positive and gives the Board confidence in Idox's continued ability to deliver profitable managed growth and sustainable cash generation, and in turn significant ongoing shareholder returns."

 

There will be a webcast at 9:30am UK time today for analysts and investors. To register for the webcast please contact MHP at idox@mhpgroup.com

 

For further information please contact:

 

Idox plc	+44 (0) 870 333 7101
Chris Stone, Non-Executive Chairman	investorrelations@idoxgroup.com
David Meaden, Chief Executive Officer
Anoop Kang, Chief Financial Officer
Peel Hunt LLP (NOMAD and Broker)	+44 (0) 20 7418 8900
Benjamin Cryer
Kate Bannatyne
Adam Telling
MHP	+ 44 (0) 7831 406117
Reg Hoare	idox@mhpgroup.com
Ollie Hoare
Matthew Taylor

 

About Idox plc

For more information see www.idoxplc.com @Idoxgroup

 

 

 

Alternative Performance Measures (APMs)

The Group uses these APMs, which are not defined or specified under International Financial Reporting Standards, as this is in line with the management information requested and presented to the decision makers in our business; and is consistent with how the business is assessed by our debt and equity providers.

¹ Recurring revenue is defined as revenues associated with access to a specific ongoing service, with invoicing that typically recurs on an annual basis and underpinned by either a multi-year, rolling contract or highly repeatable services. These services include Support & Maintenance, SaaS fees, Hosting services, and some Managed service arrangements which involve a fixed fee irrespective of consumption.

² Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) is defined as earnings before amortisation, depreciation, restructuring, acquisition costs, impairment, financing costs and share option costs.

³ Adjusted EPS excludes amortisation on acquired intangibles, restructuring, financing, impairment, share option and acquisition costs.

⁴ Net debt is defined as the aggregation of cash, bank borrowings and long-term bond. This differs from a similar measure under IFRS, which would also include lease liabilities as debt. The definition used is consistent with that used within the Group's banking arrangements.

⁵ Free cashflow is defined as net cashflow from operating activities after taxation less capital expenditure and lease payments.

 

 

Annual financial report announcement

 

The extracts below are from the Annual Financial Report 2024. Note references refer to notes included in this Annual Financial Report Announcement 2024.

 

 

Chair's statement

 

Introduction

I am very pleased to be able to report a positive set of results to all of our shareholders and other stakeholders for the financial year ended 31 October 2024. This is the sixth year in a row that we have grown revenues, recurring revenues and Adjusted EBITDA, with good cash generation. This is an excellent track record delivered by the whole Idox team. The business has maintained its trajectory of improving our core, organic metrics whilst continuing with a very focused acquisition programme. Whilst we did not complete any new acquisitions in the year, those that were completed in prior periods have contributed very strongly to our performance this year, allowing us to deliver revenue growth of 20%, and good growth in profits. Our Adjusted EBITDA margin dipped slightly as we worked through the integration of our acquisitions, but all the acquisitions that we have made have grown our addressable market so that we can continue to find new growth opportunities, whilst continuing to benefit from the solid foundations of our strong core market positions. This strength is evidenced through our recurring revenue, our margins, and cash generation.

 

This year we have made some changes to our Board composition. As the business is developing, we felt the need for greater levels of executive exposure to, and contribution at, the Board level, and we were therefore very pleased to appoint Jonathan Legdon, our Chief Operating Officer, to the Board in October 2024. This was an opportunity for him to broaden his experience, and for the Board to ensure an even greater focus on the very important operating metrics in the business. At the same time, we wanted to make sure that we were enhancing the specific experience of the Non-Executive Board members in the market areas that are becoming increasingly important to us, in particular the geospatial technology and support services area. I was therefore very pleased to be able to announce the appointment of Mark Milner to our Board in July 2024. Mark has excellent direct relevant experience in this market, which we expect to be an important contributor to the next phase of Idox growth. These changes enhance the level of challenge and debate in our Boardroom, with the intention of supporting our Executive team in their drive to build the business. We have also continued to ensure that the other Non-Executive Directors (NEDs) and I engage directly with shareholders on a regular basis, taking on board their feedback and ensuring that their views are reflected in the direction of the business. We have also engaged independent external advisors to review our Board practices and our remuneration policies.

 

As mentioned, we did not complete any further acquisitions in 2024, but following the acquisition of Emapsite in August 2023, we have been focused on integration and ensuring that the business works well in our structure. Emapsite is an excellent business, and their offerings dovetail well with those of our previous acquisitions and our original capabilities in the geospatial data management space. The acquisitions of Aligned Assets, thinkWhere, exeGesIS, LandHawk and now Emapsite have put Idox in a very strong position to build exciting new revenue streams around our core assets in property data management. The market opportunity created by the combination of these capabilities is large, and it will be a major focus of investment for the Group in the years to come. As mentioned above, we have strengthened our Board with this focus in mind.

 

Performance towards achieving our internal goal of 35% Adjusted EBITDA margin dipped as we worked through the integration of Emapsite. We still have some improvements to come in that area through the benefits of the integration of our previous acquisitions, but we are also making a big effort to ensure that we are seeing appropriate levels of return on our continuing investment in product development. As a business with strongly differentiated IP at its heart, continuous investment in innovation and development is essential, but we recognise the need to ensure excellent return on investment (RoI) for those investments. However, revenue growth of 20%, with recurring revenue up 20% over the period, delivering a 7% increase in full year Adjusted EBITDA is a pleasing set of results. To be able to deliver such a strong core performance whilst at the same time increasing the addressable market opportunity is an excellent performance. We will continue to target further acquisitions to allow us to continue to leverage the platform that we have created through our operational investments.

 

Like nearly every business, Idox is continuing to work on creating the optimal working pattern for our colleagues in the post-covid world. We strive to make sure that we have the right blend of home and office work, and essential and non-essential travel, that allows our colleagues to be efficient but also continue to benefit from the lifelong development and learning opportunities that are an important part of corporate, office life. Employers need to work hard and creatively to enable appropriate new ways of working that meet all these new requirements without allowing a drop in the most important thing, excellent customer service. I have been impressed by the continuing positive attitudes and behaviours of all our colleagues at Idox, which have enabled this ongoing strong performance. We will continue to work to ensure that we maintain the right blend of work experience that meets our colleagues needs whilst also ensuring the continuous development of our skills and capabilities.

 

Cultural development is an essential part of this value. It is not only important for the employees themselves that we create a strong and thriving culture, where all of our colleagues feel valued and appreciated, but it is also an essential component in delivering value to our customers. It is clear to me that customers know when they are supported by an organisation that has a strong and positive culture, and indeed cultural alignment can be a very strong driver of customer satisfaction. At Idox, customer satisfaction remains very strong, and this is driven by the fact that we have a very clear set of shared values, that hold quality, customer value, owning commitments and "doing the right thing" as essential and non-negotiable elements of the Idox experience. It is with these values in mind that we continue to develop talent within the business creating an environment where growth and innovation is a natural output of our work together.

 

Group strategy

The Group continued its focus on providing digital solutions and services to the LPPP public sector customers in the United Kingdom, complemented by our Assets & Communities sectors servicing customers across the world. However, we are increasingly focused on the broader geospatial data market. The key to our success is to ensure we deliver better user results and productivity improvements for customers through focusing on usability, functionality and application of integrated digital and increasingly cloud-based technologies and solutions. The identification of attractive acquisition opportunities that can enhance the Group's scale and capabilities, and the integration of completed acquisitions, is a key part of management focus and effort.

 

Board

There have been two additions to the Board in FY24, as reported above. I consider the effectiveness of the Board, which includes the contributions of the individual Board members, throughout the annual governance cycle. The current Board members are operating collectively and effectively to govern the business in an efficient and productive manner.

 

The additions to the Board were made to make sure that it develops in line with the evolving needs of the business. I am satisfied that there is sufficient diversity in the Board structure to bring a balance of skills, experience, independence, and knowledge to the Group. The two new additions bring significant enhancement to these capabilities, and I believe that we have a balanced and effective Board, however, I intend to keep this balance under review and continued assessment.

 

Corporate governance

We are cognisant of the important responsibilities we have in respect of corporate governance and shaping our culture to be consistent with our objectives, strategy, and business model which we set out in our Strategic Report and our description of Principal Risks and Uncertainties. The Group is committed to conducting its business fairly, impartially, in an ethical and proper manner, and in full compliance with all laws and regulations. In conducting our business, integrity is the foundation of all Company relationships, including those with customers, suppliers, communities, and employees.

 

Dividends

The Board has proposed an increased final dividend of 0.7p (2023: 0.6p) for FY24. Subject to approval at the AGM, the final dividend will be paid on 18 April 2025 to shareholders on the register as at 4 April 2025. This decision was reached after a full consideration of the continuing growth opportunities before the business, our strong financial position and our confidence in the future.

 

Summary and outlook

The financial results of the last year reflect the increasing quality of the Idox business. We operate in attractive markets, with strong market positions and insights, and we have every confidence that we can continue the excellent progress we have seen in FY24. The changes that we have made in the last few years, to the team, our structure, systems, and processes have delivered a major improvement in our financial performance. As a result, we have enjoyed improved stability in performance and confidence for the future, based on strongly improving orderbooks and levels of recurring revenue. We have some continuing work to do to improve our margins towards the targets that we have set for ourselves, and that will be a specific focus for the next period. On top of this, we can now point to exciting growth opportunities in the geospatial data markets. I am delighted to have had the opportunity to work with all my Idox colleagues during a period of such tremendous improvement and I look forward to continuing that work in delivering growing value to all our stakeholders.

 

Idox stakeholders are fortunate that such a talented group of people have chosen Idox as a place they want to work. Their expertise and diligence have continued to deliver the support and value that our customers expect, and I am pleased to extend my thanks to all of them.

 

Chris Stone

Chair

 

 

Chief Executive's review

 

The Chair has referenced our continued progress, and I am pleased to reflect on a year where we have delivered growth in revenue, Adjusted EBITDA, operating profit and improved cash generation.

 

Idox operates in attractive core markets which provide significant opportunities for growth in the long term. As a result, the business benefits from the strong foundations of recurring revenue, solid margins and differentiated value.

 

Our adherence to the Four Pillars of Revenue, Margins, Simplification and Communication remains steadfast and we continue to grow both organically and by complementary acquisitions that expand our software and data capabilities.

 

We ensure a disciplined approach to capital allocation in support of this goal, ensuring that our R&D expenditure is targeted in the right areas and that we maintain a rigorous approach to ensuring that acquisitions are complementary, adding to our existing product portfolio as well as extending the addressable markets we can reach.

 

We remain a consistent 'rule of 40' business, where our Adjusted EBITDA margin plus revenue growth percentages exceed 40% and this will continue to be at the forefront of our thinking over the coming years.

 

During the year we completed the integration of the Emapsite business acquired in 2023. The business grew well in the year and has demonstrated the benefit of adding further geospatial and data capabilities to our extensive product and service portfolio. The acquisition has also provided us with access to wider and faster growing private sector markets that can benefit directly from Idox product and data insights gained from the planning and property markets.

 

The team at Emapsite has integrated well with the overall Group and we are pleased to have such a strong, innovative team as part of our dynamic Company.

 

New opportunities

Client retention remains strong and plans to modernise and improve planning regulations, to improve national infrastructure and to build more homes will continue to drive the adoption of cloud-based services across Local Authorities. We see that there will be significant opportunities to manage the processes of building that infrastructure as well as monitoring the management of those assets once completed. This alongside the desperate need for effective Special Educational Needs and Disabilities (SEND) services in social care and a desire to improve the efficiency of our health service, will continue to offer substantial opportunities for Idox in the coming years.

 

The new Government's desire to derive the benefits of a digitised economy should also present an array of opportunities moving forward. We believe we are well placed to help our markets navigate the technology and change activities necessary. This will involve helping Local Authorities to drive efficiency, effectiveness and public engagement through digital channels. It will also open new opportunities within the supporting Land and Property eco-system with information and software which allows them to drive revenue growth whilst also managing their business risks and improving their efficiency. We believe the next decade will bring significant opportunities for Idox to provide software and data that connect the wider eco-system of local authorities, planners, private developers, land agents, construction companies, estate agents, conveyancers and others who need to access land and property data and processes.

 

We are aware that these changes have been identified by successive Governments and that the capacity and resources available to drive change in the Local Government sector are limited. Many Local Authorities are facing near term funding challenges, and we are focussed on providing the best usable technology and value for money solutions that deliver improved automation, insight, and efficiency in their operations. We remain engaged and willing partners to drive the necessary improvements with our clients and to provide the capacity and resources necessary to drive their digital success.

 

Scaling operations

We are leaders in our chosen markets and respected providers of management software that provides data insights to some of the most essential sectors in the world. As the Chair has indicated, we continue to look diligently for businesses that would add scale to our operations and allow us to leverage existing investments in sales and marketing, software development and operations and we retain substantial resources at our disposal for such activity with a revolving credit facility and accordion of £75m and £45m, respectively. We are appreciative of the insight and support we receive from our banking partners HSBC Innovation Bank, NatWest and Santander and for their efforts in support of our goals during the year.

 

Our people

The Chair has referenced some of the significant executive additions to the business made during the year. At an operational level we continue to refine our model and to bring our teams together in ways that allow for greater collaboration and knowledge-sharing. We have continued to develop our centre of excellence in Pune, India and see this as a significant part of our operations as we develop the Group moving forward. We have established a strong participative engagement model with all our people across Idox and we aim to support their aspirations to progress at whatever level that may take, be it in deepening their skill sets, developing their leadership capabilities, providing progression opportunities and supporting them with any specific need they may have. We prioritise communication and engagement across the Group. Our CEO Broadcasts are a significant part of that pillar and continue to be very well attended. Similarly, our development and product teams operate several 'show and tell' events during the year to share best practice, inform their colleagues of progress and of lessons learned during new technology use and deployment.

 

Our 'Be Heard' survey, aimed at making Idox an inclusive workplace allowing everyone to be their best selves has also been well supported and shaped much of our thinking in areas such as work support and recruitment practice. Alongside our Workplace Wellbeing team and Idox Elevate, the networks that have come together to support Pride@Idox and Neurodiversity@Idox are designed to raise awareness of the issues faced by these communities, share learning and understanding of how to be inclusive to those that identify as such, and to provide a safe space for colleagues to converse confidentially. I am especially grateful to our colleagues that commit their time to these activities. They enrich our business and provide great examples of how to have a positive impact at work.

 

Outlook

We are pleased to have delivered a strong performance in 2024, featuring a 20% growth in revenue and increased Adjusted EBITDA. We have made an encouraging start to FY25, with trading in line with the Board's expectations.

 

Our most recent acquisition, Emapsite, has added significant scale and expertise to our existing geospatial data capabilities, and has performed well in the year. We continue to be excited by the growth opportunities available in this sector, adding to our existing market leading public software capabilities. We continue to evaluate the opportunity for further acquisitions to enhance our offering and are optimistic on the pipeline as we move into 2025.

 

The Group's longer-term outlook remains positive and gives the Board confidence in Idox's continued ability to deliver profitable managed growth and sustainable cash generation, and in turn significant ongoing shareholder returns.

 

David Meaden

Chief Executive Officer

 

 

Chief Operating Officer's review

 

Our core values and our four pillars guide our business operations and strategy, this structural approach has generated stability and steady growth. Together with strong operational controls and focussed management teams, this provides a strong platform from which we can securely look to accelerate growth in FY25.

 

To reach our ambitious goals we have taken the opportunity to further enhance our leadership teams and fully equip the business for continued expansion and growth.

 

We have spent time and great care in finding the best individuals for key posts across the Group. The appointment of Ian Churchill in April 2024 as Chief Revenue & Strategy Officer demonstrates a strong push towards our innovation-led growth plan. His experience as a CEO in software businesses across the private sector lends serious backing to our developmental strategies.

 

Since August 2024, Trace Durning has been guiding our employee proposition to even greater heights as Head of Organisational Development and Design. Powerful, dynamic frameworks for colleagues to succeed and grow are vital to Idox's character as a business, and Trace brings vast experience and expertise in driving strategic transformation and change to enhance who we are as a Company and an employer.

 

Most recently, Alex Wrottesley - a highly respected voice in the geospatial industry with a strong background in establishing organisations within that sector - was appointed to lead our geospatial capabilities. Since joining us in September, Alex has already drawn from experiences in pioneering geospatial firms and technologies to lead this fast-growing section of our business and to position Idox as a major force in the wider geospatial arena.

 

These new appointments are in line with broader organisational changes to both allow new key personnel to better execute their visions, and to grant colleagues greater capacity to collaborate, exchange knowledge, generate ideas, and improve our offering.

 

For example, we have centralised our People & Talent, Communications, and Digital Marketing to function as a single unit to boost the central operations that reach into every corner of the business, delivering operational improvements and cost optimisation. Under Alex we have combined all of our geospatial talent from across Idox, including Emapsite, Exegesis, thinkWhere and Landhawk to provide a fertile space for building exciting new innovations, creating streamlined operations and facilitating fluid cooperation across all of our geospatial platforms.

 

Artificial intelligence (AI) is one of the biggest topics in tech right now, and our approach to it is both optimistic and responsible. An interdisciplinary AI Committee comprising of product innovators, engineers, legal, and creative professionals have developed an AI policy alongside a confirmed list of approved AI tools to safeguard data and practices. Employees have been encouraged to experiment with AI integration, particularly now the Company has signed up for a corporate account with Tricentis and will continue to provide feedback upon which we can sculpt and fashion the most innovative but secure usage of cutting-edge technologies into our working processes. We are excited about the opportunities that AI and Machine Learning brings to both our software user experience and data services over the coming years.

 

We continued to invest into our India based operations in 2024, this included opening a new larger office in Pune, strengthening the local management teams and investing in our people and operations. We believe this continued investment in India is important to our overall growth strategy and customer focus, helping to improve the availability of our services, services resilience and improving customer satisfaction.

 

Sales and contract wins

A key measure of our forward momentum and provision of future revenues for the Group is our order intake, which in FY24 showed continued growth and delivered over £102m in orders, exceeding our in-year Revenues by 15% and an improvement on our prior year by over 23%.

 

We continued to see high volumes of order intake across the markets that we serve, and in particular, new business wins and new revenue from existing customers, which made more up than a third of contract wins. There were a number of notable deals throughout FY24, these included:

 

In LPPP, Idox have partnered with North Yorkshire County Council to deliver a services consolidation project worth £2.4m that will transform eight Planning authority systems together into a single service provision, delivering significant improvements for local people, communities and businesses across the County. This is a clear example of the extensive experience Idox has in supporting Local Government reorganisation across the UK. In the past we have assisted many other customers through technology and service improvement to help adopt a unitary model from the existing District/County two tier systems, including Shropshire, Cornwall, Durham Bedfordshire and Northumberland.

 

Within LPPP, our geospatial businesses have continued to deliver an impressive growth trajectory throughout FY24, showing that the collective skills, capabilities and resources of the combined team offers the market a truly unique proposition. New customers, Wales & West Utilities and Property Risk Inspection (Nationwide) are utilising our Data and Mapping services in contracts worth £1.1m and £0.65m, respectively, and international customers Natuurmonumenten and Staatsbosbeheer extended access to our Geospatial - Countryside Management Solutions.

 

Our Communities Division, amongst other wins secured a £2.5m contract extension for the Electoral Commission Malta that will see Idox deliver Software and Services for the next five years.

 

In 2024, the Assets Division confirmed longer-term agreements with Wood Group and CRNL in North America in contracts worth $1.6m & $1.4m respectively. Additionally, a contract was agreed worth $0.8m to help Oxy Inc to consolidate its operations onto our highly successful McLaren Enterprise platform, work that was commenced in FY24 and will complete in 2025.

 

Markets

Our strong market positions provide an important platform from which Idox can offer unparalleled insights and influence in decision making and policy setting. Meeting regularly with The Department for Education (DfE) & National Association of Family Information Services (NAFIS) regarding SEND & Social Care matters, BASHH (The British Association for Sexual Health and HIV), the NHS and UK Health and Security Agency, these important partnerships help drive sustainable long-term change and improvements to the industry and directly to citizens across the UK.

 

We work with Ministry of Housing, Communities and Local Government (MHCLG) across several areas, most notably in the Open Digital Planning Group reviewing planning reform and its impacts both nationally and locally. As the market leading solutions provider in the historic environment Sector, we are also instrumental in delivering the objectives of the Levelling Up and Regeneration Act for conservation and improved planning processes. Given the MHCLG's remit, our relationships extend to the UK Election Groups, regarding execution and future reforms, in addition to the devolved Election bodies in Welsh Government, Scottish Government and the Electoral Office of Northern Ireland.

 

We also maintain strong connections and attendance across industry groups connected to our markets including the Geospatial Commission, Natural England, Historic England, Local Authority Building Control, and the Institute of Licensing & the Chartered Trading Standards Institute.

 

Communication

We continue to execute and evolve an open communications strategy. Transparency of leadership is evident throughout the year. Regular CEO broadcasts to keep all employees up to date with wider Company movements, while Breakfast with the Board provides colleagues with the chance to meet executives face-to-face in a safe space for regular dialogue, questions, and queries.

 

Workplace Wellbeing sessions populate our yearly calendars, interspersed with guest speakers to share knowledge and experience on a range of social topics. There is continual interaction between groups, departments, and teams around essential issues that matter to us all.

 

To help our internal communication channel and provide a platform where we can inform and celebrate with colleagues our successes, I provide a regular monthly blog of content from across the business, including contract wins, project successes, interesting software developments and innovations.

 

The employees of Idox increasingly constitute a community, using our internal social platform, through Idox sponsors. This community engages in facilitating key groups to encourage and support colleagues:

 

·      Workplace Wellbeing

·      Pride @ Idox

·      Diversity, Equity, Inclusion and Belonging

·      Neurodiversity

·      Elevate - Building gender equality at all levels of Idox

 

Our communities are further enriched with special interest groups bringing colleague communities together (including photography, knitting and even a group to serve the armchair historians of Idox).

 

Reflection

The past year has delivered a strong order intake performance, growing revenues and Adjusted EBITDA, delivering on our expectations for 2024 and creating a robust and effective platform for our continued growth aspiration for 2025. We have made key strategic investments in our people and services, and continue to promote an inclusive, professional development-centric culture. We are excited by the significant opportunities we see in the coming year, and we are confident in our capacity to execute against them.

 

Jonathan Legdon

Chief Operating Officer

 

 

Financial review

I am pleased to report that Idox has delivered strong revenue growth in FY24 as well as good improvement in Adjusted EBITDA and cash generation.

 

The following table sets out the revenues and Adjusted EBITDA for each of the Group's segments from its continuing activities:

 

		2024	2023	Variance
		£000	£000	£000	%
Revenue
- LPPP		55,264	43,413	11,851	27%
- Assets		14,893	14,845	48	0%
- Communities		17,442	15,019	2,423	16%
- Total		87,599	73,277	14,322	20%
Revenue split
- LPPP		63%	59%
- Assets		17%	20%
- Communities		20%	21%
- Total		100%	100%
Adjusted EBITDA*
- LPPP		16,854	13,885	2,969	21%
- Assets		3,299	4,199	(900)	(21%)
- Communities		5,898	6,366	(468)	(7%)
- Total		26,051	24,450	1,601	7%
Adjusted EBITDA margin
- LPPP		30%	32%
- Assets		22%	28%
- Communities		34%	42%
- Total		30%	33%

 

 

Revenues

		2024	20231	Variance
		£000	£000	£000	%
Revenues
- Recurring (LPPP)		34,898	26,214	8,684	33%
- Recurring (Assets)		9,418	9,692	(274)	(3%)
- Recurring (Communities)		10,158	9,622	536	6%
- Total recurring		54,474	45,528	8,946	20%
- Non-recurring (LPPP)		20,366	17,199	3,167	18%
- Non-recurring (Assets)		5,475	5,153	322	6%
- Non-recurring (Communities)		7,284	5,397	1,887	35%
- Total non-recurring		33,125	27,749	5,376	19%
- Total continuing revenue		87,599	73,277	14,322	20%
- Recurring*		62%	62%
- Non-recurring**		38%	38%

 

¹ The 2023 recurring and non-recurring figures have been represented in order to allocate some Emapsite revenues as recurring within the LPPP segment. The decision was made in FY23 to include all Emapsite revenues as non-recurring as a prudent measure until we better understood the nature of the revenue streams following their acquisition in August 2023. This has resulted in a re-presentation of £1.9m from non-recurring to recurring.

* Recurring revenue is defined as revenues associated with access to a specific ongoing service, with invoicing that typically recurs on an annual basis and underpinned by either a multi-year, rolling contract or highly repeatable services. These services include Support & Maintenance, SaaS fees, Hosting services, and some Managed Service arrangements, which involve a fixed fee irrespective of consumption. 

** Non-Recurring revenue is defined as revenues without any formal commitment from the customer to recur on an annual basis.

 

Revenue from continuing operations for the Group increased 20% in the year to £87.6m (2023: £73.3m). LPPP was up 27% for the year at £55.3m (2023: £43.4m) and benefitted from a full year contribution from Emapsite as well as good growth from our Local Government and Cloud solutions. Assets has remained broadly flat with revenue of £14.9m (2023: £14.8m) and Communities has increased 16% to £17.4m (2023: £15.0m) largely driven by the increase in provision of services around the UK General Election in July 2024.

 

Recurring revenues for the year increased 20% from £45.5m to £54.5m and represented 62% (2023: 62%) of the total continuing revenue. Within LPPP, recurring revenue increased 33% to £34.9m (2023: £26.2m). Good growth in recurring revenue across all areas was supported by the full year impact of the Emapsite acquisition. The recurring revenues in Assets reduced 3% to £9.4m (2023: £9.7m) with growth in our asset tracking solutions partially offsetting a small reduction in the other solutions. Recurring revenues in Communities improved 6% to £10.2m (2023: £9.6m), driven by growth in the Databases and Lilie solutions.

 

Non-recurring revenues for the year increased 19% to £33.1m (2023: £27.7m). Non-recurring revenue in LPPP increased by 18% to £20.4m (2023: £17.2m), primarily driven by a strong in year customer contract renewals, cloud transitions in the year and the full year impact of Emapsite. In Assets, non-recurring revenue was up 6% to £5.5m (2023: £5.2m) with increases in all solutions apart from EIM which was flat in the year. As expected, non-recurring revenue in Communities was up 35% to £7.3m (2023: £5.4m) having been driven by the UK General Election.

 

Adjusted EBITDA increased by 7% to £26.1m (2023: £24.5m), delivering a reduced Adjusted EBITDA margin of 30% (2023: 33%), driven by the impact of mix changes in the integration of Emapsite into the Group.

 

Profit before taxation

The statutory profit before tax was £8.1m (2023: £7.8m). The following table provides a reconciliation between Adjusted EBITDA and statutory profit before taxation for continuing operations.

 

		2024	2023	Variance
		£000	£000	£000	%
Adjusted EBITDA		26,051	24,450	1,601	7%
Depreciation		(1,854)	(1,636)	(218)	13%
Amortisation - software licences and R&D		(6,115)	(5,697)	(418)	7%
Amortisation - acquired intangibles		(4,052)	(3,622)	(430)	12%
Restructuring costs		(302)	(378)	76	(20%)
Acquisition costs		(1,156)	(746)	(410)	55%
Financing costs		(67)	(396)	329	(83%)
Share option costs		(2,491)	(2,631)	140	(5%)
Net finance costs		(1,950)	(1,524)	(426)	28%
Profit before taxation		8,064	7,820	244	3%

 

Restructuring costs were £0.3m (2023: £0.4m). The restructuring costs in the year are associated with simplifications of the Group structure and a capital reduction exercise.

 

Acquisition costs of £1.2m (2023: £0.7m) related to due diligence on a potential acquisition opportunity, which ended during the year and finalisation fees associated with the acquisition of Emapsite and LandHawk, with all payments associated with the acquisitions completed. The prior year acquisition costs were in relation to the acquisition of Emapsite during the year and finalisation fees associated with the acquisition of Aligned Assets and exeGesIS.

 

Financing costs of £67k (2023: £396k) relate to the annual fee for the Group's revolving credit facility (RCF) and extensions related costs. The prior year costs incurred related to the refinancing of the Group's RCF.

 

Share option costs of £2.5m (2023: £2.6m) relate to the accounting charge for awards made under the Group's Long-term Incentive Plan, in accordance with IFRS 2 - Share-based Payments.

 

Net finance costs have increased to £2.0m (2023: £1.5m). Increased bank interest payable due to an increased interest rate environment was the main factor for the increase in the year.

 

The Group continues to invest in developing innovative technology solutions across the portfolio and has capitalised development costs of £7.9m (2023: £7.6m). The increase in the year is due to the full year impact of the FY23 acquisitions.

 

Taxation

The effective tax rate (ETR) on a statutory basis for the year was 34.78% (2023: 28.6%).

 

The difference between the statutory rate of 25% and the ETR of 34.78% was driven largely by expenses and international losses not deductible for tax purposes, adjustments in respect of prior years and the application of the statutory rate of 25% relating to deferred tax on acquired intangibles. The ETR on an adjusted basis moved from 25% to 26% and was driven by expenses and international losses not deductible for tax purposes.

 

Earnings per share and dividends

Adjusted basic earnings per share for continuing operations was 2.63p (2023: 2.65p) and adjusted diluted earnings per share remained stable at 2.61p (2023: 2.62p). Basic earnings per share for the year was down 7% at 1.16p (2023: 1.24p) and the diluted earnings per share was down 7% at 1.15p (2023: 1.23p).

 

The Board proposes a final dividend of 0.7p per share (2023: 0.6p), which represents a total dividend for the year of 0.7p per share (2023: 0.6p), at a total cost of £3.2m (2023: £2.7m).

 

Balance sheet and cash flows

The Group's net assets have increased to £78.3m compared to £73.3m as at 31 October 2023. The constituent movements are detailed in the Group's consolidated Statement of Changes in Equity: which are summarised as follows:

 

	12 months to 31 October 2024 £000
Total Equity as per FY23 Financial Report	73,277
Share option movements	2,533
Equity dividends paid	(2,756)
Profit for the year	5,259
Exchange gains on translation of foreign operations	(33)
Total Equity as per FY24 Financial Report	78,280

 

 

 

The Group continued to have good cash generation in the year. Cash generated from operating activities before taxation was up 26% at £25.2m (2023: £20.1m), and as a percentage of Adjusted EBITDA increased to 97% (2023: 82%). The Group generally continues to have high levels of adjusted EBITDA to cash conversion.

 

Free cashflow for the year was up 27% at £11.6m (2023: £9.1m). Free cashflow has increased in the year due to the improved profitability.

 

		2024	2023
		£000	£000
Net cashflow from operating activities after taxation		21,108	18,599
Capitalisation and purchase of tangible and intangible assets		(8,686)	(8,522)
Lease payments		(782)	(936)
Free cashflow		11,640	9,141

 

The Group ended the year with net debt of £9.9m (2023: £14.7m). Net debt comprised cash of £11.7m less bank borrowings of £10.8m and the Maltese listed bond of £10.8m, which is due for repayment in July 2025 and will be paid out of existing facilities. We ended the year with a net debt to Adjusted EBITDA ratio of 0.4 times (2023: 0.6 times) with significant headroom against the Group's financial covenants.

 

In October 2024 the Group extended its loan agreement with National Westminster Bank plc, HSBC Innovation Bank Limited and Santander UK plc. The facilities comprise a revolving credit facility of £75m and a £45m accordion and are committed until October 2027. The Group retains significant liquidity with cash and available committed bank facilities and significant financial resources to deploy into new M&A opportunities.

 

Anoop Kang

Chief Financial Officer