Idox describes strong first half in tougher market

Information management software specialist Idox reported a strong first-half performance in a trading update on Thursday, with year-on-year adjusted EBITDA growth of about 10%.

The AIM-traded firm implemented a new tripartite divisional structure consisting of land, property and public protection, communities, and assets, and had made promising progress in its target markets according to the board.

It said it achieved a substantial increase in order intake during the period, amounting to around £52m, representing a 23% rise compared to the first half of the prior financial year.

The board said the increase in orders provided the company with a favourable level of recurring revenue visibility for the rest of the 2023 financial year, and extending into 2024.

Idox said it anticipated reporting growth of about 10% in adjusted EBITDA, reaching £12m, aligning with management expectations.

Additionally, the firm saw its revenue increase by roughly 8%, reaching £36m, while recurring revenue rose around 7% to £21m.

Throughout the first half, Idox generated robust cash flow and closed the period with a net cash position of £1m.

That was a significant improvement from the net debt position of £6.7m reported at the end of the 2022 financial year on 31 October, and a net debt of £3.8m a year earlier.

“The group has delivered a good performance for the period in a challenging macroeconomic environment,” said chief executive officer David Meaden.

“We have continued to secure both new clients and new contracts with key customers, which has resulted in significantly higher order intake, providing good visibility into the future.

“As anticipated, the group has delivered double digit profit growth in the period.”

Meaden said the company’s focus on cash generation ensured it ended the period with net cash, compared to net debt at the end of last year.

“Combined with our available debt facilities, this enables us to continue to pursue attractive acquisition targets that we believe will generate value for all shareholders.

“We are pleased with our progress and momentum and are on track to deliver on our plans for the remainder of 2023.”

Idox said it would report its first-half results on 8 June.

At 1316 BST, shares in Idox were flat at 66.6p.

Reporting by Josh White for Sharecast.com.