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Ideagen PLC (IDEA)

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Tuesday 26 January, 2021

Ideagen PLC

Unaudited Interim Results

RNS Number : 8328M
Ideagen PLC
26 January 2021
 

The information communicated in this announcement includes inside information for the purposes of Article 7 of Regulation 596/2014 

 

26th January 2021

Ideagen PLC

("Ideagen" the "Company" or the "Group")

Unaudited Interim Results for the six months ended 31 October 2020

 

Ideagen PLC (AIM: IDEA), a leading supplier of regulatory and compliance software announces its unaudited interim results for the six months ended 31 October 2020.

Financial Highlights

· First half performance in line with market expectations and confident second half outlook

· Revenue increased 7% to £29.2 million (H1 2019: £27.3 million)

Continued expansion of recurring revenues, representing 83% (H1 2019: 74%) of total revenues

SaaS revenues increased by 38% to £13.4 million (H1 2019: £9.7 million)

· Annual Recurring Revenue book (ARR) was up 13% at approximately £54.8 million (£48.7 million at 30 April 2020)

Organic ARR growth of £3.2 million - 7% in period (H1 2019: 10%)

Acquisition-led ARR growth of £2.9 million

· Adjusted EBITDA* grew 25% to £10.0 million (H1 2019: £8.0 million)

· Adjusted PBT** increased by 23% to £7.4 million (H1 2019: £6.0 million)

· Adjusted diluted EPS** increased by 13% to 2.60 pence (H1 2019: 2.31 pence)

· Cash generated from operations of £10.0 million (H1 2019: £5.9 million) representing 99% (H1 2019: 74%) of adjusted EBITDA**

· Net bank debt at 31 October 2020 was £27.9 million (30 April 2020: £16.8 million; 31 October 2019: £18.0 million)

· Interim dividend increased by 15.4% to 0.12 pence per share (H1 2019: 0.104 pence)

 

Operational Highlights

· Acquisition of Qualsys a fast-growing supplier of EQMS to a number of highly regulated industries such as pharmaceutical, healthcare, complex manufacturing and food and drink. Qualsys EQMS is used by over 150 customers including Diageo, Unilever, Honeywell, BT, FujiChem and IQE and delivers recurring revenue of £2.9 million

· 270 new customers in the period across our key markets of Life Sciences and Healthcare, Accounting, Finance and Banking and Global Manufacturing. These include new customers KPMG, Reata Pharmaceuticals, General Dynamics, Bank of Greece, NATO, Holland Colours and the Lighthouse Laboratory

· Strong international expansion with 60% of all new logo wins outside of the UK

· Strong growth from all geographies demonstrated in each of Ideagen's three core solutions - Assurance, Compliance and Collaboration

· Ideagen continues to see significant market opportunity supported by accelerating structural growth drivers

· Strong account management with significant contract extensions from GSK, Lelam, Discover Financial Services, Amgen, Catapult and Salford Royal NHS Foundation Trust

· Continued high levels of customer retention with support and maintenance contract renewal rate of 95% (H1 2019: 95%)

· Ongoing product innovation and investment across all products with strong emphasis on cloud solutions

 

Post-period highlights

· Fundraising of c.£48.7 million to support the Company's acquisition pipeline

· Acquisition of Huddle for approximately £28 million. Huddle is a SaaS-based secure content collaboration and workflow solution with customers across highly regulated sectors such as accountancy and government

· Further progress on the acquisition pipeline with the opportunities at varying stages of maturity some of which have potential to close in the current financial year.

· Separate announcement this morning of board transition plan

 

*  Before share-based payments, amortisation of acquisition intangibles and exceptional items 

** Before share-based payments and exceptional items

 

The Company will be providing a presentation to investors and analysts regarding the interim results at 9am today through the below link: 

https://www.lsegissuerservices.com/spark/Ideagen/events/9999d1f2-4e47-4bf6-8c9a-f127830d1b9b    

 

A recording of the presentation and a copy of the materials will be available after the event at www.ideagenplc.com

 

Ben Dorks, Chief Executive of Ideagen, commented: 

"That the business has continued to progress so strongly against our business objectives in the first six months is testament to the hardworking team at Ideagen.

We focus on ARR as our key growth metric. I am delighted that this continues to show excellent progress. This was driven by a strong organic performance, further acquisitions and ongoing investment to support our product development. It is also pleasing that we continue to achieve organic ARR growth across each of our key vertical markets. This is being complemented and strengthened by the successful integrations of acquired companies such as WorkRite (acquired late in our previous financial year) and Qualsys.

The second half of the year has begun in line with our expectations and with the proceeds of our recent fundraise being swiftly and effectively deployed in the acquisition of Huddle. We continue to assess further opportunities within the acquisition pipeline. The 270 new customers and the continued expansion of our geographic presence, coupled together with repeat business derived from more than 5,700 customers and our strong ARR base gives the Board confidence in the prospects for the Group for the current year and beyond."

Enquiries:

 

Ideagen plc

David Hornsby, Executive Chairman

Ben Dorks, Chief Executive

Emma Hayes, Chief Financial Officer

 

 

finnCap Limited

Henrik Persson, James Thompson (Corporate Finance)

Alice Lane (ECM)

 

Canaccord Genuity Limited

Simon Bridges

Richard Andrews

 

About Ideagen plc

Ideagen is a UK-headquartered, global technology company quoted on the London Stock Exchange AIM market (Ticker: IDEA.L).

A global supplier of regulatory and compliance solutions, Ideagen provides a common software platform and an integrated risk- based approach to meet multi-industry standards, enabling compliance with relevant laws, policies, and regulations.

The Group provides software and services to organisations operating within highly regulated industries such as life sciences, healthcare, banking and finance, insurance, aviation, and aerospace and defence, with its main operational premises spread throughout the UK, EU, US, Middle East and SE Asia.

Currently, more than 5,700 organisations use Ideagen's products including nine of the top 10 UK accounting firms, all of the top aerospace and defence companies globally and 75% of the world's leading pharmaceutical firms.  Ideagen's diverse and varied customer base includes many well-known, global brands such as British Airways, Aggreko, BAE, Ryanair, US Navy, KLM, BBVA, Bank of New York, Commerzbank, Meggitt, Heineken, Johnson Matthey, Haeco Group and European Central Bank. As well as this, Ideagen counts 250 hospitals across the UK and US amongst its client base. For further information please visit  www.ideagen.com .

Ideagen directly employs over 600 members of staff and is present in every continent globally.

 

CHIEF EXECUTIVE'S REVIEW

I am delighted to report that, against a challenging and turbulent macro economic backdrop, the first six months has seen continued success for Ideagen based on the execution of our strategic objectives with robust new customer acquisition, organic ARR growth and the acquisition of Qualsys.  In the period we have achieved a strong performance across our key metrics, high levels of recurring revenue, strong margins and excellent cash conversion.

The board now considers the most relevant growth metric as being Annual Recurring Revenue ("ARR") which  increased approximately 13% from £48.7 million on 30 April 2020 to £54.8 million on 31 October 2020.  This is comprised of acquisition-led growth of £2.9 million combined with organic growth of £3.2 million, equating to in excess of 13% annualised.

The Group has made excellent progress in implementing its strategy of generating organic and acquisitive growth in recurring revenue and we are excited to see that continue. We have completed one acquisition during the period, bringing Qualsys into the Group. The transaction has significantly strengthened our product portfolio and provides further consolidation opportunities and capability to support our customer base. We also continue to grow geographically with 60% of all customer bookings outside the UK.

Total revenue of £29.2 million (H1 2019: £27.3 million), represents overall growth of 7%.  Recurring revenue increased to £24.3 million (H1 2019: £20.3 million), representing growth of 20% in this key segment.  Adjusted EBITDA grew 25% to £10.0 million (H1 2019: £8.0 million).  A further key financial metric for the Group that continues to be important is EPS and I am pleased to report an increase in adjusted diluted EPS of 13% to 2.60 pence (H1 2019: 2.31 pence).

Market drivers and growth opportunities

Ideagen operates in a global market and is fuelled by several drivers that propel us to achieve our goal of strong structural growth. Businesses around the world continue to need innovative solutions to help them meet increasingly stringent compliance, quality, safety, and regulatory risk requirements.

Ideagen's product-market strategy is focused in three areas:

 

Assurance:-

· Meeting existing and new standards, laws, regulations & ISO requirements

· Monitoring internal workflows, policies and procedures

· Managing risk across highly regulated industries

· Improving performance in QHSE through efficient workflow, improved monitoring and auditing

 

Compliance:-

· Pursuit of a sustainable competitive advantage through risk-based compliance and oversight

· Establishing a strong governance model to deliver resilience, compliance and strategic goals

· Productivity of internal audit teams through automation of their business processes

· Compliance with laws and regulations such as SOX, UK Companies Act, SM&CR or ASC 275

· Stewardship of brand and reputation

 

 

Collaboration:-

 

· Document collaboration workspace for global collaboration

· Review & approval of documents within regulated markets e.g. Life Sciences, Defence and Central Government

· Managing security, permissions, workflow and compliance across all stakeholders. 

· Delivering productivity gains in a remote-working world

 

These key market opportunities, overlaid with a vertical concentration in aviation, aerospace, automotive and defence manufacturing, life sciences, healthcare, financial services and banking, provide a global opportunity for growth with the accelerating shift towards a cloud economy.

Overview

Following continued strong financial performance, Ideagen has the capability and resources to make important investments across the Group. These investments will support further growth in line with our People, Products and Customers. Organic investment will be directed at developing and launching additional world-class products, improving the value-based outcomes for our customers, as well as recruiting and developing the very best people into Ideagen. We intend to support this organic investment by considering acquisitions that broaden our geographic reach, strengthen our product capabilities and drive upsell / cross sell opportunities within our customer base.

Corporate Transactions

Ideagen has a strong track record of successfully executing strategic acquisitions. During the period we completed the acquisition of Qualsys to strengthen our product and technology capabilities and broaden our customer base, which in turn brings us closer to our strategic goal of being a global leader in our chosen markets.

The acquisition of Qualsys for cash consideration of £15.6 million (of which £1.6 million is deferred for 12 months) was completed in August 2020.  Qualsys is a fast-growing supplier of EQMS to a number of highly regulated industries such as pharmaceutical, healthcare, complex manufacturing and food and drink.  Their EQMS is used by over 150 customers including Diageo, Unilever, Honeywell, BT, FujiChem and IQE.  Shortly prior to the acquisition by Ideagen, Qualsys launched EQMS 7 - a SaaS-native cloud QMS platform which has been extremely well received by the market and provides Ideagen with a strong growth opportunity accelerating the existing development roadmap of Ideagen's Q-Pulse product.  Current run-rate revenues are approximately £3.5 million while ARR is approximately £2.9 million.

Post Period in December 2020 we acquired Huddle for a gross consideration of £28.1m payable in cash on completion to be funded by existing resources and the proceeds from our recent placing. Huddle's current annualised run rate revenues are approximately £10.5m of which in excess of 99% is recurring.

Huddle is a leading provider of SaaS based secure content collaboration and workflow solutions to a number of highly regulated sectors including UK and US Government, Healthcare and Accountancy. The acquisition of Huddle marks a step change within our Collaboration segment.

The Board remains committed to our ongoing buy and build strategy and expects to complete further acquisitions in the future. Our acquisition strategy focuses on recurring revenues and compelling product offerings, continually applying strict criteria to ensure that acquisitions represent value for shareholders.

Operational

At the end of the period the Group had net debt of £27.9 million (30 April 2020: net debt of £16.8 million) after spending £14.5 million on acquisitions, including settlement of deferred consideration. Operating cash generation in the period was strong at 99% (H1 2019: 74%).

The Group continues to benefit from a strong and growing base of recurring revenues, which represented 83% of total revenue in the period (H1 2019: 74%). The Group is committed to increasing the percentage of total revenue derived from recurring contracts through the transition from a traditional licence-based model to a SaaS subscription model. This transition is now well underway and recurring SaaS revenues have increased by 38% to £13.4 million (H1 2019: £9.7 million) representing 46% of total revenues.

The Redland, Optima and WorkRite acquisitions from FY20 have been successfully integrated using our mature 72 point integration framework.

People

The whole Ideagen team has worked exceptionally well during the COVID-19 crisis. I want to extend my thanks and that of the Board to our talented and enthusiastic team members for their sterling efforts and continued dedication.

At 31 October 2020 Ideagen counted 576 employees across its UK and international office network, with the majority located within our office hub network: Nottingham HQ (UK), Glasgow (UK), Kuala Lumpur (Malaysia), Raleigh (US). A combined total of 135 people are situated internationally.

The organisation continues its significant investment within our Technology teams, adding depth, breadth, and technology innovation. Approximately 33% of resource is dedicated to this area, primarily based in Nottingham and Malaysia. Ideagen maintains its focus upon building domain expertise within core markets and delivering excellence across the customer base. As a result, the Group has 25% within Sales & Marketing, and 29% in Customer Delivery, Support and Success.

Ideagen has continued to recruit selectively across all key departments of technology, sales and marketing and customer success as well as further hires in our senior management team. We continue to believe a broad talent pool across the company is the best way to ensure sustainable growth. As such it is pleasing to confirm that 40% of employees have been with the Group for 3 or more years, and 25% have been with the Group 6 years or more. Although we acknowledge this is a traditionally male dominated sector, we are delighted to see strong growth in female applications.

I am immensely proud to work with such a committed and talented team and delighted to see it reflected in positive feedback from customers.

Current Trading & Outlook

Trading since the period end has remained robust and we continue to see strong demand for our products from new potential customers.  We continue to be supported by our base of over 5,700 customers who continue to generate growth through recurring revenues and repeat business. The previous acquisitions are integrating and performing well and the Board has every confidence in the continued prospects for the Group.

Ben Dorks

Chief Executive Officer 

 

 

FINANCIAL AND OPERATIONAL REVIEW

 

Revenue for the six months ended 31 October 2020 increased by 7% to £29.2 million (H1 2019: £27.3 million). Revenues are analysed by revenue type in note 2.

Recurring revenues are a key strategic focus and they have grown strongly due to an emphasis on sales of our SaaS/Subscription-based products and the acquisition of businesses with high levels of recurring revenues. The Group's Annualised Recurring Revenue (ARR) book has grown by approximately 13% from £48.7 million on 30 April 2020 to £54.8 million on 31 October 2020. This comprises acquisition-led growth of £2.9 million combined with organic growth of £3.2 million within the period.

Total recurring revenues recognised in the period increased by 20% to £24.3 million (H1 2019: £20.3 million) representing 83% (H1 2019: 74%) of overall revenues. This proportion has improved consistently since 2016 when recurring revenues represented only 53% of total revenues.

Within the recurring revenues, SaaS increased by 38% to £13.4 million (H1 2019: £9.7 million) representing 46% (H1 2019: 35%) of Group revenue.  Support & Maintenance revenues grew by 2% to £10.8 million (H1 2019: £10.6 million) representing 37% of total revenues (H1 2019: 39%).

Professional Services revenues represented 7% (H1 2019: 11%) of total revenues.  This reduction is consistent with the increase in SaaS orders that typically require a lower level of configuration work, and also a reduction in the professional services revenues from the businesses acquired during 2019/20 as the level of customisation is actively reduced under Ideagen ownership. 

Licence & Software Development revenues decreased to £3.0 million (H1 2019: £3.8 million) representing 10% (H1 2019: 14%) of total revenue in line with the increasing emphasis on SaaS sales.

Adjusted EBITDA for H1 2020/21 increased by 25% to £10.0 million (H1 2019: £8.0 million). The adjusted EBITDA margin increased to 34.5% (H1 2019: 29.4%).  Gross margin improved to 92.0% (H1 2019: 91.4%). Operating costs continue to be tightly controlled representing 57.5% (H1 2019: 62.1%) of revenue with some benefit from Covid on areas such as travel costs. We recognise the need to continue targeting investment in our staff and the operational systems of the business to support continued organic growth and to provide a strong, scalable platform for the integration of future acquisitions.

The Group has significant intangible assets, primarily from the acquisitions that it has made. Amortisation of acquisition intangibles of £4.8 million (H1 2019: £4.8 million) represents the majority of the total depreciation and amortisation charge of £7.0 million (H1 2019: £6.5 million). Amortisation of development costs amounted to £1.1 million (H1 2019: £0.9 million). 

The share-based payment charge of £0.7 million (H1 2019: £0.8 million) relates to the Group's equity-settled share option schemes including the Share Incentive Scheme for employees.

The Group incurred costs of £0.4 million (H1 2019: £0.2 million) in relation to acquiring the businesses during the period. Restructuring charges of £0.2 million were incurred in the period (H1 2019: £0) driven by regional office closures and acquisition integrations.

The adjusted Group tax charge is analysed in note 5 and amounted to £1.4 million (H1 2019: £0.8 million). This has been adjusted to exclude the deferred tax effects associated with the amortisation of acquisition intangibles and share based payment charges. The adjusted Group tax charge represents 18.7% (H1 2019: 12.6%) of adjusted profit before tax of £7.4 million (H1 2019: £6.0 million). The increased tax rate is due to the higher level of profits earned in the United States which attract higher rates of tax than in the UK and the transition onto the large company R&D tax credit scheme.  By virtue of its size, the Group no longer qualifies for the SME R&D scheme meaning that from 2020/21 it will receive a lower level of tax benefit on qualifying expenditure.  The exercise of share options continues to significantly reduce the Group's liability to UK corporation tax.

As a result of the above, adjusted diluted earnings per share increased by 13% to 2.60 pence (H1 2019: 2.31 pence).

The Group's financial position has continued to strengthen during the period with net assets increasing to £78.4 million (30 April 2020: £76.9 million; 31 October 2019 £75.2 million).

The value of intangible assets increased to £128.0 million (30 April 2020: £113.8 million) mainly as a result of the acquisition of Qualsys during the period. The Group capitalised £1.8 million (H1 2019: £1.9 million) of R&D development costs during the period which represented 6.0% (H1 2019: 7.1%) of total revenues. This reduction reflects completion of significant projects on the development of Q-Pulse, which saw a new, cloud-based version released during the period.

The Group's approach to the funding of acquisitions has continued to evolve with debt and free cash being utilised alongside equity.  The strong cash flow and recurring revenue profile of the business mean that the Group has been able to secure relatively inexpensive debt funding. In September 2020 the Group's Revolving Credit Facility was extended from £40 million to £50 million giving further headroom to fund acquisitions and the Board continues to regularly review its financing facilities to ensure an effective and optimal capital structure, and will continue to do so as the business evolves both organically and inorganically.

The acquisition of Qualsys in August 2020 was funded from the Revolving Credit Facility. As a result, net bank debt (excluding finance lease liabilities under IFRS16) increased to £27.9 million at 31 October 2020 (30 April 2020: £16.8 million) which represented 1.2x the adjusted EBITDA forecast for the current financial year.

Cash generated by operations during the period amounted to £10.0 million (H1 2019: £5.9 million) representing cash conversion of approximately 99% (H1 2019: 74%) of adjusted EBITDA. In H1 2019/20 this cash conversion metric was affected to some extent by seasonal billings in Redland (acquired in June 2019).  This has normalised in H1 2020/21 leading cash conversion to be more in line with the standard profile. 

Working capital, as recorded in the cash flow statement, remained consistent between 30 April 2020 and 31 October 2020.  Receivables reduced slightly by £0.2 million, reflecting the Group's seasonal billing profile, which is weighted towards the second half of the year.  Cash collections have remained robust and are a key operational metric for the business. Days Sales Outstanding at 31 October 2020 are 76 (30 April 2020: 76) based on a count-back methodology calculated by reference to invoiced sales.

Free Cash Flow, defined as net cash generated by operating activities less capital expenditure, amounted to £3.7 million (H1 2019: £2.2 million) representing 37% (H1 2019: 28%) of adjusted EBITDA or 13% (H1 2019: 8%) of Revenue.  Free Cash Flow in the period was impacted by £2.1 million of capital expenditure in relation to the Group's new head office facility in Nottingham.  Excluding this one-off expenditure, Free Cash Flow in the period was £5.8 million,  58% of adjusted EBITDA. 

Operational Review

In order to facilitate growth, Ideagen invests heavily in 'best of breed' cloud systems that have scalability, functionality and reporting at their core. Salesforce and NetSuite remain the primary operating systems for the organisation, providing the internal platform for sales, marketing and finance.  They are supported by several functionally specific cloud solutions such as Zendesk, WalkMe, Full Story, Natero, Peakon, Krow, and Jira.  This system output including usage telemetry is used by our customer success teams to provide focussed planning for revenue protection and through our customer account management function to drive upsell / cross-sell.

As Ideagen develops, significant resource is invested in benchmarking processes and systems to ensure best practice is standard and that Ideagen remains fit for growth. Ideagen remains committed to relevant accreditations and currently holds Microsoft Gold Partner status, ISO 9001, ISO 27001, ISO45001, and ISO 14001. The Group has membership of a significant number of leading bodies including the Chartered Quality Institute (CQI), Institute of Internal Auditors (IIA), Flight Safety Foundation, and the Institute of Biomedical Science (IBMS). 

Dividend

The Board proposes to increase the interim dividend by 15.4% to 0.120 pence per share (2019/20: 0.104 pence per share) payable on 17th March 2021 to shareholders on the register on 26 th February 2021. The corresponding ex-dividend date is 25 th February 2021.

 

Emma Hayes

Chief Financial Officer

 

Ideagen plc

Group Statement of Comprehensive Income for the six months ended 31 October 2020

 

 

 2020

£'000

 

2019

£'000 

Revenue (note 2)

 

29,160

 

27,310

Cost of sales

 

(2,337)

 

(2,346)

Gross profit

 

26,823

 

24,964

Operating costs

 

(16,776)

 

(16,946)

Profit from operating activities before depreciation, amortisation,

share-based payment charges and exceptional items

 

10,047

 

8,018

 

 

 

 

 

Depreciation and amortisation

 

(6,959)

 

(6,464)

Costs of acquiring businesses

 

(392)

 

(236)

Restructuring costs

 

(246)

 

(34)

Share-based payment charges

 

(686)

 

(796)

Profit from operating activities

 

1,764

 

488

Finance costs

 

(526)

 

(395)

Profit before taxation

 

1,238

 

93

Taxation (charge) /credit (note 4)

 

(313)

 

242

Profit / (loss) for the period

 

925

 

335

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that may be subsequently reclassified to profit or loss:

 

 

 

 

Exchange differences on translating foreign operations

 

(597)

 

(20)

Corporation tax on exercise of options

 

47

 

388

 

 

 

 

 

Total comprehensive income for the period attributable to the owners of the parent company

 

375

 

703

 

 

 

 

 

Earnings per share (note 3)

 

Pence

 

Pence

 

 

 

 

 

Basic

 

0.41

 

0.15

Diluted

 

0.40

 

0.15

 

 

 

 

Ideagen plc

Group Statement of Financial Position at 31 October 2020

 

31 October 2020

 

30 April

2020

 

31 October 2019

 

 

£'000

 

£'000

 

£'000

Assets and liabilities

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible assets

127,951

 

113,788

 

109,000

Property, plant and equipment

3,360

 

1,404

 

1,487

Right of use assets

7,832

 

8,312

 

3,295

Lease receivables

358

 

412

 

-

 

139,501

 

 

 

123,916

 

113,782

Current assets

 

 

 

 

 

Trade and other receivables

18,270

 

18,441

 

20,327

Lease receivables

80

 

80

 

Financial instruments

100

 

92

 

-

Cash and cash equivalents

12,063

 

8,216

 

5,769

 

30,513

 

26,829

 

26,096

Current liabilities

 

 

 

 

 

Trade and other payables

6,980

 

6,941

 

6,008

Current income tax liabilities

329

 

588

 

532

Lease liabilities

983

 

1,039

 

1,034

Financial instruments

26

 

116

 

-

Bank borrowings

40,000

 

25,000

 

23,750

Deferred revenue

24,409

 

22,799

 

20,842

Contingent consideration on business combinations

-

 

-

 

500

Deferred consideration on business combinations

1,571

 

525

 

500

 

74,298

 

57,008

 

53,166

Non-current liabilities

 

 

 

 

 

Lease liabilities

7,489

 

7,725

 

2,202

Deferred income tax liabilities

9,872

 

9,103

 

9,265

 

17,361

 

16,828

 

11,467

 

 

 

 

 

 

Net assets

78,355

 

76,909

 

75,245

 

 

 

Ideagen plc

Group Statement of Financial Position at 31 October 2020 (continued)

 

31 October 2020

 

 

30 April

2020

 

 

31 October 2019

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

Issued share capital

2,268

 

2,266

 

2,236

Share premium

55,528

 

55,364

 

54,639

Merger reserve

1,658

 

1,658

 

1,658

Share-based payments reserve

2,875

 

2,370

 

1,881

Retained earnings

15,274

 

13,902

 

14,010

Foreign currency translation reserve

752

 

1,349

 

821

 

 

 

 

 

 

Equity attributable to owners of the parent

78,355

 

76,909

 

75,245

 

 

Ideagen plc

Group Statement of Cash Flows for the six months ended 31 October 2020

 

2020

 

2019

 

£'000

 

£'000

Cash flows from operating activities

 

 

 

Profit / (loss) for the period

925

 

335

Depreciation of property, plant and equipment

312

 

262

Depreciation of right of use assets

724

 

466

Amortisation of intangible non-current assets

5,923

 

5,736

Loss on disposal of property, plant and equipment 

 

Business acquisition costs in profit or loss

392

 

236

Share-based payment charges in profit or loss

686

 

796

Restructuring costs in profit or loss

246

 

34

Finance costs recognised in profit or loss

526

 

395

Taxation charge / (credit) recognised in profit or loss

313

 

(242)

Decrease /(increase) in trade and other receivables

227

 

(2,157)

Movement in financial instruments debtor 

(8) 

 

(Decrease)/increase in trade and other payables

(190)

 

(365)

Movement in financial instruments creditor 

(90)

 

(Decrease) /increase in deferred revenue

(12)

 

415

Cash generated by operations

9,979

 

5,911

Finance costs paid

(383)

 

(484)

Income tax paid

(743)

 

(26)

Restructuring costs paid

(509)

 

(34)

Employer's national insurance paid on share-based payments

(20)

 

-

Business acquisition costs paid

(392)

 

(615)

Net cash generated by operating activities

7,932

 

4,752

 

 

 

 

Cash flows from investing activities

 

 

 

Net cash outflow on acquisition of businesses net of cash acquired

(14,023)

 

(17,596)

Payments of deferred consideration on business combinations

(525)

 

(769)

Payments of contingent consideration on business combination

-

 

(769)

Payments for development costs

(1,754)

 

(1,944)

Payments for property, plant and equipment

(2,446)

 

(624)

Net cash used by investing activities

(18,748)

 

(21,702)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from placing of equity shares

-

 

-

Payments for share issue costs

-

 

-

Proceeds from issue of shares under share option scheme

120

 

685

Proceeds from issue of shares under share incentive scheme

46

 

44

Cost of shares purchased under the share incentive scheme

-

 

(3)

New short-term borrowings

15,000

 

16,250

Finance lease payments

(480)

 

(441)

Net cash generated by financing activities

14,686

 

16,535

 

 

 

 

Net (decrease)/increase in cash and cash equivalents during the period

3,870

 

(415)

Cash and cash equivalents at the beginning of the period

8,216

 

6,199

Effect of exchange rate changes on cash balances held in foreign currencies

(23)

 

(15)

Cash and cash equivalents at the end of the period

12,063

 

5,769

 

 

Ideagen plc: Group Statement of Changes in Equity for the six months ended 31 October 2020

 

Share

capital

 

Share

premium

 

Merger

reserve

 

Share-based payments reserve

 

Retained earnings

 

Foreign

currency translation reserve

 

Total

attributable to owners of the parent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

£'000

 

 '000

 

  £'000

 

  £'000

 

  £'000

 

  £'000

 

  £'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 May 2020

2,266

 

55,364

 

1,658

 

2,370

 

13,902

 

1,349

 

76,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued under share option scheme

2

 

118

 

-

 

-

 

-

 

-

 

120

Shares issued under share incentive plan

-

 

46

 

-

 

-

 

-

 

-

 

46

Share-based payments

-

 

-

 

-

 

665

 

-

 

-

 

665

Transfer on exercise of share options

-

 

-

 

-

 

(160)

 

160

 

-

 

-

Taxation on share-based payments in equity

-

 

-

 

-

 

-

 

240

 

-

 

240

Total transactions with owners recognised directly in equity

2

 

164

 

-

 

505

 

400

 

-

 

1,071

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

 

-

 

-

 

-

 

925

 

-

 

925

Other comprehensive income for the period

-

 

-

 

-

 

-

 

47

 

(597)

 

(550)

Total comprehensive income for the period

-

 

-

 

-

 

-

 

972

 

(597)

 

375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 October 2020

2,268

 

55,528

 

1,658

 

2,875

 

15,274

 

752

 

78,355

 

 

Ideagen plc: Group Statement of Changes in Equity for the year ended 30 April 2020

 

 

Share capital

 

Share premium account

 

Merger reserve

 

Share-based payments reserve

 

Retained earnings

 

Foreign

currency translation reserve

 

Total

attributable to owners of the parent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

£'000

 

£'000

 

 '000

 

£'000

 

£'000

 

  £'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 May 2019

2,198

 

53,948

 

1,658

 

1,440

 

13,597

 

841

 

73,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued under share option schemes

64

 

1,328

 

-

 

-

 

-

 

-

 

1,392

Shares issued under the share incentive scheme

4

 

88

 

-

 

-

 

-

 

-

 

92

Share-based payments

-

 

-

 

-

 

1,690

 

-

 

-

 

1,690

Shares purchased under the share incentive scheme

-

 

-

 

-

 

(3)

 

-

 

-

 

(3)

Transfer on exercise of share options

-

 

-

 

-

 

(636)

 

636

 

-

 

-

Transfer in respect of share incentive scheme

-

 

-

 

-

 

(121)

 

121

 

-

 

-

Taxation on share-based payments in equity

-

 

-

 

-

 

-

 

(1,050)

 

-

 

(1,050)

Equity dividends paid

-

 

-

 

-

 

-

 

(656)

 

-

 

(656)

Total transactions with owners recognised directly in equity

68

 

1,416

 

-

 

930

 

(949)

 

-

 

1,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

-

 

-

 

-

 

-

 

(193)

 

-

 

(193)

Other comprehensive income for the year

-

 

-

 

-

 

-

 

1,447

 

508

 

1,955

Total comprehensive income for the year

-

 

-

 

-

 

-

 

1,254

 

508

 

1,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 April 2020

2,266

 

55,364

 

1,658

 

2,370

 

13,902

 

1,349

 

76,909

 

 

 

Ideagen plc: Group Statement of Changes in Equity for the six months ended 31 October 2019

 

Share

Capital

 

Share

premium

 

Merger

reserve

 

Share-based payments reserve

 

Retained earnings

 

Foreign

currency translation reserve

 

Total

attributable to owners of the parent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

£'000

 

 '000

 

  £'000

 

  £'000

 

  £'000

 

  £'000

 

  £'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 May 2019

2,198

 

53,948

 

1,658

 

1,440

 

13,597

 

841

 

73,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued under share option scheme

35

 

650

 

-

 

-

 

-

 

-

 

685

Shares issued under share incentive scheme

3

 

41

 

-

 

-

 

-

 

-

 

44

Share-based payments

-

 

-

 

-

 

796

 

-

 

-

 

796

Shares purchased under the share incentive scheme

-

 

-

 

-

 

(3)

 

-

 

-

 

(3)

Transfer on exercise of share options

-

 

-

 

-

 

(352)

 

352

 

-

 

-

Taxation on share-based payments in equity

-

 

-

 

-

 

-

 

(662)

 

-

 

(662)

Total transactions with owners recognised directly in equity

38

 

691

 

-

 

441

 

(310)

 

-

 

860

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

 

-

 

-

 

-

 

335

 

-

 

335

Other comprehensive income for the period

-

 

-

 

-

 

-

 

388

 

(20)

 

368

Total comprehensive income for the period

-

 

-

 

-

 

-

 

723

 

(20)

 

703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 October 2019

2,236

 

54,639

 

1,658

 

1,881

 

14,010

 

821

 

75,245

 

 

Ideagen plc

Notes to the interim financial information

1  Basis of information

The interim financial information for the 6 months ended 31 October 2020 and the six months ended 31 October 2019 included in this announcement is unaudited. The financial information for the year ended 30 April 2020 included in this announcement does not constitute the annual report and accounts of the Company for the year ended 30 April 2020 within the meaning of section 434 of the Companies Act 2006. The audited annual report and financial statements of the Company for the year ended 30 April 2020 has been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain any statement under section 498 (2) or (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

 

Consistent accounting policies have been applied in the preparation of this information.

 

 

2  Revenue

An analysis of the Group's revenue for the 6 months to 31 October 2020 is given below.

 

 

31 October 2020

 

31 October 2019

 

£'000

 

£'000

 

 

 

 

Recurring SaaS/subscription software revenues

13,442

 

9,697

Recurring support & maintenance

10,811

 

10,575

Total recurring revenues

24,253

 

20,272

Software - new licence revenues

2,959

 

3,770

Professional services

1,902

 

3,049

Other

46

 

219

 

 

 

 

Total revenue

29,160

 

27,310

3  Earnings per share information

 

Basic earnings per share is calculated by dividing the profit for the period attributable to the owners of the Company ('Earnings') by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by dividing Earnings by the weighted-average number of ordinary shares outstanding during the period as adjusted for the effect of all potentially dilutive shares, including share options.

 

In order to better demonstrate the performance of the Company, adjusted earnings per share calculations have also been presented which take into account items typically adjusted for by users of financial statements. The adjusted earnings and earnings per share information are shown below.

 

Earnings per share information

31 October  2020

 

31 October  2019

 

 

£'000

 

£'000

 

 

 

 

Profit / (loss) for the period (Earnings)

925

 

335

Adjustments:

 

 

 

Amortisation of acquired intangibles

4,831

 

4,834

Deferred taxation on amortisation of acquired intangibles

(921)

 

(950)

Share-based payment charges

686

 

796

Deferred taxation on share-based payment charges

(98)

 

(46)

Costs of acquiring businesses

392

 

236

Restructuring costs

246

 

34

Tax on restructuring costs

(47)

 

-

Adjusted earnings

6,014

 

5,239

 

 

 

 

Weighted average number of shares

226,644,513

 

220,326,156

Diluted weighted average number of shares

231,086,638

 

227,107,597

 

 

 

 

Basic earnings per share

0.41 pence

 

0.15 pence

Diluted earnings per share

0.40 pence

 

0.15 pence

Basic adjusted earnings per share

2.65 pence

 

2.38 pence

Diluted adjusted earnings per share

2.60 pence

 

2.31 pence

 

4  Taxation

Further information on the taxation charge in the Statement of Comprehensive Income is as follows:

 

Six months  ended 31 October 2020

£'000

 

Six months ended 31 October 2019

£'000

 

 

 

 

Income taxation charge

551

 

418

 

 

 

 

Deferred tax credit on amortisation of acquisition intangibles

(921)

 

(950)

Deferred tax on share-based payment charges

(98)

 

(46)

Deferred tax charge on development costs

126

 

202

Other deferred tax charges

655

 

134

Total deferred income taxation credit

(238)

 

(660)

 

 

 

 

Total taxation charge / (credit)

313

 

(242)

 

5  Adjusted profit before taxation and adjusted taxation charge

 

6 months ended

31 October 2020

£'000

 

6 months ended 31 October 201 9

£'000

 

 

 

 

Adjusted earnings (note 3)

6,014

 

5,239

Adjusted taxation charge (below)

1,379

 

754

Adjusted profit before taxation

7,393

 

5,993

 

 

 

 

Taxation in the Statement of Comprehensive Income

313

 

(242)

Add back:

 

 

 

Deferred taxation credit on amortisation of acquisition intangibles (note 4)

921

 

950

Deferred taxation on share-based payment charges

98

 

46

Tax on restructuring costs

47

 

-

Adjusted taxation charge

1,379

 

754

 

 

 

 

Adjusted taxation charge based on adjusted profit before taxation

18.7%

 

12.6%

 

 

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