25th Jul 2018 11:35
LONDON (Alliance News) - Information management services provider IDOX PLC sunk to a loss in the first half of its financial year, hobbled by impairments in several divisions and a reduction in revenue.
Pretax loss for the six months to the end of April was GBP43.2 million, sunk from a profit of GBP3.4 million the year before, due to an impairment charge of GBP39.5 million incurred in the recent period.
The impairment relates to goodwill, and acquired intangibles from the Digital, Health, Transport and Engineering Information Management divisions, following a review of the forecasts for each of these segments and an assessment of discount rates.
On an adjusted basis, pretax loss was GBP1.0 million, from a profit of GBP6.3 million.
Revenue saw a double-digit decline of 19% to GBP35.2 million from GBP43.6 million the prior year, due to reductions at the Digital, EIM and Public Sector Software businesses, compared to an increase at the Content and Health divisions.
In light of lowered expectations for the year and costs incurred in the period, IDOX has suspended its interim dividend. The year before, IDOX paid an interim dividend of 0.385 pence per share.
Although the group said expects an improved performance in the second half, adjusted earnings before interest, taxes, depreciation and amortisation for the year as a whole is expected to be at the lower end of its guidance range of GBP13 million to GBP15 million.
This reflects a fall from GBP18.5 million the year before.
"The last six months has proved to be a difficult period for Idox. However, since joining the Group in June, I have been impressed with the both the quality and comprehensive range of solutions offered by the company; we have a fundamentally strong business with excellent people serving attractive core markets," said Chief Executive David Meaden.
"Whilst a number of challenges remain, I now have a much clearer view of the potential and optimal shape of the business going forward. In future years we therefore expect that the Group's financial performance will benefit from a reduced cost base and a stronger commercial focus on organic growth, recurring revenues and cash conversion," Meaden added.
Shares in IDOX were down 1.4% at 35.30 pence on Wednesday.
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