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Diversification through a slew of acquisitions (see Idox further diversifies) is beginning to pay dividends for rebadged software and services provider IDOX. The UK local government and increasingly engineering focused supplier said revenue and ‘normalised profits’ for the six months to 30 April are substantially ahead of the first half of 2011. IDOX is also launching a graduate recruitment programme across the group. So a very positive sign where many of its rivals are noticeably retrenching. Investors thought so too, nudging IDOX’s shares up 4%.
H1 revenue, including acquisitions, was up 58% (to c£28.6m) (see IDOX improving picture (as far as we can tell!)). An impressive 10% organic growth came from the public sector and the engineering information management businesses. Against a broadly declining public sector SITS market IDOX must be gaining significant market share with that kind of growth. To put the profit expectation in context, IDOX’s pre-tax profit in H111 was £2m, down 8% (margin 11%). So we would expect it to be significantly higher this time round.
The UK public sector business continues to see organic revenue growth in areas such as managed and hosted services. But we will have to wait for H1 results for the full picture. Revenue growth in the engineering information management business meanwhile benefited from new wins with US energy supplier Southern Company, oil and gas producer Occidental, and construction and engineering consultancy CH2M Hill.
Looking ahead there is also more inorganic top line growth to come in H2 with the acquisitions of CTSpace last November, Opt2vote in March (see IDOX acquires electoral software provider), and Dutch grant advisory business Currency Connect in May (see here) all due to contribute additional revenue. CE Richard Kellett-Clarke sees more M&A opportunities ahead to build momentum for new revenue streams in the UK and internationally.
