Idox Plc · LSE:IDOX
Idox — H1 FY2021 Earnings Presentation
37 slides from Idox's earnings presentation, Jun 10, 2021
Slide 1: Idox plc Half year results
Idox plc Half year results 30 April 2021 (FY21 H1)
Slide 2: Idox plc
Idox plc A leading supplier of specialist information management software and solutions Over 90% of local UK authorities are customers for one or more of our products 1,300+ customers & 500+ employees with offices in the UK, Europe and India Continuing revenues £60 million+ (pro-forma basis) and adj
Slide 3: Agenda
Agenda • Introduction & H1 Highlights • Financial performance • Growth strategy o Organic o Acquisition strategy • ESG Dave Meaden Rob Grubb Chief Executive Officer Chief Financial Officer • Outlook 3
Slide 4: FY21 H1 operational highlights
FY21 H1 operational highlights The first half of FY21 has seen continued strategic delivery following the transformation across the Group over the previous two financial years. • The disposal of our Content businesses in line with our strategy to focus on pure software businesses. • Good progress wi
Slide 5: Financial
inancial *. NS Idox. Do more.
Slide 6: FY21 H1 financial highlights
FY21 H1 financial highlights Another period of strong financial performance • Recurring revenues continue to grow well in local Revenue Recurring revenue Adjusted EBITDA* government business, but impacted by small reductions in elections (planned consolidation of products), in social care (Covid-19
Slide 7: Public Sector Software
Public Sector Software Revenue £ms Adj. EBITDA £ms Adj. EBITDA margin 30.0 10.0 36 .0 % 35 .0 % 25.0 9.5 34 .0 % 20.0 9.0 33 .0 % 27.0 15.0 8.5 10.0 25.7 8.0 9.4 32 .0 31 % .0 % 34.9% 5.0 7.5 8.1 30 .0 % 31.5% - 7.0 29 .0 % FY20 H1 FY21 H1 FY20 H1 FY21 H1 FY20 H1 FY21 H1 Comprising Local Authority,
Slide 8: Engineering Information Management
Engineering Information Management Revenue £ms Adj. EBITDA £ms Adj. EBITDA margin 5.0 0.8 20 .0 % 4.5 18 .0 % 0.7 4.0 16 .0 % 0.6 3.5 14 .0 % 0.5 3.0 12 .0 % 0.7 2.5 0.4 4.3 10 .0 % 2.0 4.1 0.6 8.0% 17.3% 13.1% 0.3 1.5 6.0% 0.2 1.0 4.0% 0.1 0.5 2.0% - - 0.0% FY20 H1 FY21 H1 FY20 H1 FY21 H1 FY20 H1 F
Slide 9: Income statement
Income statement • Adjusted EBITDA up due to revenue improvements primarily in local authority which has dropped through to margin strongly. £'ms FY21 H1 FY20 H1* Variance Revenue 31.1 30.0 1.1 • D&A up due to slightly higher recent investment in software and R&D. Adjusted EBITDA 10.1 8.7 1.4 Deprec
Slide 10: Balance sheet
Balance sheet £'ms FY21 H1 FY20 H1* Variance Fixed Assets 72.6 84.7 (12.1) • Fixed Assets decrease due to disposal of Idox Content businesses (£8.2m) Deferred tax assets & liabilities (2.0) (3.1) 1.1 and amortisation on prior intangible assets (£4.0m) Trade & other receivables, and prepayments 16.9
Slide 11: Cashflow
Cashflow £'ms FY21 H1 FY20 H1* Variance Profit before taxation 7.9 0.3 7.6 Less non-cash items: D&A and share options 6.4 6.1 0.3 Less non-cash items: gain on subsidary disposal (4.6) - (4.6) Less interest shown under investing & financing 0.5 1.6 (1.1) • Net cash from operating activities due to in
Slide 12: Future Guidance
Future Guidance Revenue growth targets Margin targets Other income statement items • Currently no planned restructuring or • PSS – aiming for organic mid-single digits • Targeting adj EBITDA margins of 35% over next refinancing costs anticipated, although may through CPI, accounting management and t
Slide 13: Growth strategy
Growth strategy
Slide 14: Delivering our three-phase strategy
Delivering our three-phase strategy EV £500m+ Recurring revenue 75% EBITDA margin 35% Fly Run Market Cap £235m Revenue £68.0m Walk Adj. EBITDA £19.6m Market Cap £130m Net Debt £16.1m Revenue £65.5m Improved Management Information for better decisions Adj. EBITDA £14.4m Tighter product and infrastruc
Slide 15: 'Four Pillars' strategic framework
‘Four Pillars’ strategic framework Margin Revenue expansion Simplification Communication enhancement • Establishment of Idox’s first • Development teams • Completed integration of all • Transparency and consistency group-wide CRM which is now restructured with consolidation businesses in to Idox Sof
Slide 16: Strategy Fly phase
Strategy Fly phase As we move into the ‘Fly’ phase, our aims, under our organisational Four Pillars are: Organic growth Buy and build Improved MI and Improved on-shore / more automation off-shore mix Industry Product Public Own IP Move products to cloud Sector Software Increase market shares and awa
Slide 17: Inorganic growth plans
Inorganic growth plans Idox planning for a number of bolt-on acquisitions to accelerate growth Example Example target target acquisition acquisition profile profile • Looking to leverage the existing strong management team, Idox brand and market presence, and operational infrastructure to bring nich
Slide 18: M&A process
M&A process • Established M&A group comprising executive members and support from the Active Shortlist Sector Revenue business as required for specific engagements. GIS & Built Environment sub £5m GIS & Built Environment sub £3m • Ongoing engagement with: GIS & Built Environment sub £5m o M&A teams
Slide 19: Tascomi case study
Tascomi case study Extensive expansion of selling capacity, commercial engagements earlier Acquired July 19 Current Dedicated marketing campaigns Paying customer # 55 Paying customer # 83 (+51%) Revenues* £1.9m Revenues* £2.9m (+53%) EBITDA* £0.7m Consultancy and Support provided by EBITDA* £1.6m (+
Slide 20: Aligned Assets
Aligned Assets Idox announced the acquisition of Aligned Assets on 7 June 2021 • Builds on public sector software focused growth strategy, following disposal of Content division. A well-established software business with high levels of recurring revenue providing software solutions to a range of pub
Slide 21: Environment Social Governance
Environment Social Governance
Slide 22: Responsible Idox
Responsible Idox Conducting business responsibly is core to Idox’s ESG steering committee business model and long-term strategic goals. • In FY21 we formed an ESG steering committee to The Board recognises the importance of our environmental and understand and monitor how our practices are societal
Slide 23: Four areas of commitment supporting UN SDGs
Supporting the UN SDG’s, Idox focus on four areas of commitment to ensure we are operating as a responsible business: Our people Our community Our environment Our organisational responsibility To build a diverse and To support and enable our As a naturally low emission To be a responsible inclusive
Slide 24: Environmental Protection
Environmental Protection Our business model of software development and deployment is lower-consumption than most other industries, however we recognise we still have our part to play in reducing carbon emissions in all our communities. We recognise the importance of environmental protection and are
Slide 25: Outlook
Outlook
Slide 26: Summary & Outlook
Summary & Outlook Enter second half with good momentum and benefit of acquisition of Aligned Assets. Well placed to continue organic growth and add complementary businesses to our portfolio. Full year financial performance is expected to be slightly ahead of management previous expectations. We are
Slide 27: Investment Case
Investment Case • Significant UK market brand and presence in stable core domains • Refreshed management team and board delivering ongoing change • Good organic revenue growth (mid to high single digit) • Strong visibility of revenues from high levels of recurring revenues • High operating margins w
Slide 28: Q&A
O&A ., 3 28 idox
Slide 29: Appendix
Appendix ., 3 29 idox
Slide 30: Idox Software
Idox Software Public Sector Software FY21 H1 revenues £27.0m (FY20: £25.7m) Public Sector Software (‘PSS’) Transport UK Grants Databases Providing legislative compliance and document process management software, in a variety of cloud and on-premise applications within local government and NHS Addres
Slide 31: Land & Property Idox eco-systems
Land & Property Idox eco-systems Citizen Engagement GIS (Geo Information Systems) Sexual health clinic Elections Asset Management management Address Public Estates Building management Directory transport management control services Licensing Environmental Mobile tech Planning control SEND funding (R
Slide 32: Deeper dive on our ESG efforts
Deeper dive on our ESG efforts An example of some of the areas where Idox are making an impact: Our people Our community Target 3.4 Target 3.7 Idox promote mental health and wellbeing through a variety of staff Our Lilie solution enables Genito-Urinary Medicine clinicians to initiatives. Our Mental
Slide 33: Deeper dive on our ESG efforts
Deeper dive on our ESG efforts An example of some of the areas where Idox are making an impact: Our environment Our organisational responsibility Target 12.5 Target 8.5 As well as working to the Energy Saving Opportunity Scheme As a responsible employer, Idox is committed to providing equal (ESOS),
Slide 34: Significant shareholders as at June 2021
Significant shareholders as at 10 June 2021 Canaccord Genuity Wealth Management 19.1% Soros Fund Management 11.4% Kestrel Partners 11.5% Long Path Partners 9.7% Herald Investment Management 7.2% Lombard Odier Asset Management 5.0% ORA Capital 4.6% Gresham House 3.9% Total > 3% 72.4% 34
Slide 35: Aligned Assets
Aligned Assets figned Matching & cleansing Address search AddressBase Premium customer address management Cloud 35 idox
Slide 36: Markets – demand trends
Markets – demand trends Public Sector Software • Migration to cloud to reduce IT estate. COVID 19 • Move to digital to improve resident and client flexibility. Idox successfully manoeuvred the COVID-19 pandemic with little impact to the business internally. Idox did not • Market expanding low to mid
Slide 37: Markets - competitors
Markets - competitors Business Unit Competitive Landscape Idox successfully manoeuvred the CV-19 pandemic with Local authorities, including: little impact to the business internally. Idox did not take Idox is largest player, competing with large incumbents utilise such as Northgate, any government C