With its clear focus on information management for regulated industries, Ideagen has found itself a solid niche. Having firmly rooted itself, it has been able to expand the scope of the business into more verticals, notably healthcare and more recently the financial services sector (see the HotViews archive here). The result is strong and repeatable performance, even at an organic level.
For the half year to October 31 2013, revenue was up 43% yoy to £3.7m, with a 16% increase in underlying organic revenue. Profits are not being sacrificed as adjusted EBITDA was up 59% to £1.2m. Operating cost control and cost reductions from the integration of acquisitions led to an increase in the adjusted EBITDA margin, taking it up from 29% in the year ago period to 32%. The only ‘but’ was lower cash generation because several new contracts were signed in the last two months of the period, although these are expected to generate cash in Q3.
It has been an active period for Ideagen, including completion of the integration of Plumtree and MSS acquisitions, the release of the dart/KW patient information and electronic forms solution for the NHS (it has already signed a contact with Central Manchester NHS Trust, and other foundation trusts have selected the solution), and its first business in the UK nuclear sector with the National Nuclear Laboratories (NNL) contact. After the period closed, it acquired audit and risk management solutions supplier Pentana, which will add 350 customers, £1.4m of recurring revenues and an entry point to the financial services sector. What is reassuring is that it is making progress and generating new business outside the healthcare area so is not reliant on a single sector. In addition, the need for governance, risk and compliance is only going to increase in the regulated industries it targets.