Ideagen beats full-year forecasts, confident on outlook

Ideagen delivered stronger than expected full-year numbers and bumped up its dividend pay-out in response.

Revenues for the 12 months ending on 30 April jumped 24% to £27.1m, surpassing Finncap analysts' forecasts for £26.2m.

The supplier of information management software credited the beat to its focus on organic growth, while continuing with its 'buy and build' acquisition strategy, including the purchase of Covalent Software and Logen both of which were bringing in steady and recurring revenue and an additional 200 customers to the group.

Stevenage-based Ideagen pegged full-year underlying organice sales growth at 10%, adding that its run rate of recurring revenues hit £20.2m at year-end.

Its investment in Coruson, a cloud based Governance, Risk and Compliance (GRC) platform drove a 133% increase in Software as a Service (SaaS) revenues to £4.8m, including from clients such as British Airways, Ryanair and Air Transat.

In addition, the company clinched 150 new customer accounts and significant contract extensions from clients such as Jaguar, Land Rover and DHL making up part of their strong 97% customer retention rate.

Adjusted earnings before interest, taxes, depreciation and amortisation grew 26% to £7.9m, delivering a 19% jump in earnings per share to 3.16p.

Net cash at period-end stood at £4.2m which was ahead of expectations due to the strong cash generation in the second half of trading.

Cash generated from operations rose from £4.9m a year agoto £8.9m.

The company repaid £2m of acquisition-related borrowings in April this year, taking the group back to a debt free balance sheet.

Ideagen's board proposed a final dividend of 0.142, for a 15% increase in the full-year payput to 0.21p.

To take note of, the comapny described trading since period-end as "robust".

"We continue to see strong demand for our products from new potential customers. Moreover our growing recurring revenues and the repeat business derived from more than 3,000 customers, an increase of over 800 from last year, provides the Board with confidence in the prospects for the Group for the current year and beyond," said Ideagen chief David Hornsby.

Following the company's results, house broker Finncap reiterated a 108.0p target price, dubbing the company's prelims as "typically impressive".