Preliminary Results 30 April 2012

Ideagen PLC

("Ideagen" or the "Company")

Preliminary Results for the Year Ended 30 April 2012

Ideagen PLC (AIM: IDEA), a leading supplier of Compliance based Enterprise Information Management, announces its unaudited preliminary results for the year ended 30 April 2012.

These are the first set of financial results since the Company's admission to AIM on 2nd July 2012 and represent the Company's third year of consecutive Revenue and EPS growth.

Financial Highlights

·; Revenue up by 78% to £4.00m (2011: £2.25m)

o Organic revenue growth of 38% in core compliance business

o Recurring revenues of £3.3m at year end covering 90% of fixed cost base

·; Adjusted EBITDA up by 127% to £1.18m (2011: £0.52m)*

·; Adjusted PBT up by 120% to £1.08m (2011: £0.49m)**

·; Basic Adjusted EPS up by 35% to 1.26 pence (2011: 0.93 pence)**

·; Cash generated by operations of £1.26m (2011: £0.06m)

·; Cash at bank and in hand of £1.50m (2011: £0.76m)

·; Net Assets of £5.79m (2011: £3.07m)

*Before share based payments, acquisition costs and AIM flotation costs.

**Before share based payments, acquisition costs, AIM flotation costs and amortisation of acquisition intangibles.

Operational Highlights

·; Acquisition of Proquis Ltd and Proquis Inc. significantly strengthening compliance capabilities

·; Landmark contract with the US Department of Veterans Affairs expected to be worth $10.6m over 5 years

·; Additional significant contract wins at South East Water, Prudential, Raytheon, Fuji, MOD, and VA Amarillo

·; Appointment of Graham Harrop, formerly Director of Government Business at Microsoft, as Chief Operating Officer

·; Appointment of Alan Carroll, formerly Senior Staff Officer, Army Information Strategy at the MOD and Head of Defence Sales at Unisys, as Independent Non-Executive Director

·; Establishment of US Healthcare sales team

·; Support and maintenance contract renewal rate of 95%

David Hornsby, CEO of Ideagen, commented: "We have made strong progress during the year both strategically and financially. Despite considerable investment in our product, sales resources and management team and the successful acquisition and integration of Proquis, we have again exceeded market forecasts in terms of EBITDA** (9% ahead) and year-end cash balance (75% ahead). We are securing ever larger contracts and have strong recurring revenues and contract renewal rates. Current trading remains in line with market expectations and the Directors look to the future with confidence."

Enquiries:

Chief Executive's Statement

I am pleased to announce our results for the year ended 30 April 2012. The year saw further transformation of the Company through continued organic revenue and profit growth and a third acquisition. The acquisition of Proquis has provided the group with over 100 new customers, a web based compliance platform and a US presence. During the year the Company invested in ongoing product development, sales resource and additional management whilst delivering EPS** growth of 35%. In July 2012, the Company moved from PLUS markets to AIM to further support our strategy for growth. The Company finished the year with a cash position of £1.50 million and continues to be cash generative.

**Before share based payments, acquisition costs, AIM flotation costs and amortisation of acquisition intangibles

Results

Revenue for the year ended 30 April 2012 increased by 78% to £4.00m (2011: £2.25m) with a full year contribution from Ideagen Software and a four month contribution from Proquis, which was acquired in January 2012.

Adjusted operating profit* increased by 127% to £1.18m (2011: £0.52m). Profit before taxation excluding amortisation of acquisition intangibles, AIM flotation expenses, acquisition expenses, share based payment charges and other exceptional items increased by 120% to £1.08m (2011: £0.49m).

Basic adjusted earnings per share increased by 35% to 1.26 pence (2011: 0.93 pence).

The Group's financial position has continued to strengthen during the last year. Net assets increased to £5.79m at 30 April 2012 (2011: £3.07m) following the acquisition of Proquis and cash balances at 30 April 2012 were £1.50m (2011: £0.76m). Current liabilities include a deferred revenue provision of £1.05m and £0.42m of deferred consideration on the Proquis acquisition which, if payable, will be settled in shares rather than cash. Excluding these amounts, which are not considered as cash liabilities, the Group had net current assets at 30 April 2012 of £0.68m (2011: £0.25m).

Operating cash flows for the year ended 30 April 2012 were strong with cash generated by operations of £1.26m (2011: £0.06m).

*Before total depreciation and amortisation charges, AIM flotation expenses, acquisition expenses and share based payment charges

Company Strategy

The Directors' strategic objective is for the Group to become a leading supplier of compliance based Enterprise Information Management (EIM) solutions to the UK in general and to the US healthcare market. EIM is focused on the capture, storage, retrieval and distribution of 'unstructured' information such as documents, web pages and content, email, video and scanned images. It has been independently estimated that 'unstructured' information accounts for more than 80 per cent of all data within an organisation and the Directors believe that its effective management is a corporate necessity. Increasingly organisations are obliged to demonstrate compliance with industry standards, regulations and KPIs which acts as a compelling driver for investment in the Group's products.

The Directors believe that the Group's portfolio of products occupy a niche that comprises elements of two recognised market sectors; Enterprise Content Management (ECM) and Governance, Risk and Compliance. Our Intellectual Property includes formal document control combined with business process management in the areas of competency, audit, incident reporting and corrective action which provides a fully integrated compliance proposition. In the opinion of the Directors there is no clear global leader in this field and there is a significant opportunity to exploit a gap in the market.

The Company intends to deliver its strategy through a combination of organic and acquisitive growth which will enhance and complement the Group's product set and provide scale within the business. The Directors are of the opinion that the UK market and the US healthcare sector are both fragmented with no dominant compliance based EIM supplier and that consolidation in this sector will offer attractive opportunities over the next few years. Furthermore, the emergence of "cloud" based computing has provided the Group with the opportunity to develop a SaaS business model which we expect to drive significant new business growth and recurring revenue opportunities.

In January 2012, the Company acquired Proquis Ltd and its US subsidiary, a supplier of document control and compliance software solutions. This acquisition has greatly enhanced the Company's value proposition, adding over 100 customers and increasing the Company's recurring revenues to approximately £3.3m per annum. The Company now has over 400 customers many of which are blue chip organisations operating in highly regulated industries.

Sectors and Market Opportunity

The Group is focused on providing compliance based information management solutions to businesses in highly regulated industries. The Group's solutions are used by companies to help them maintain compliance with internationally recognised standards and internal business processes.

There are over 19,000 ISO standards which are published by the International Organisation for Standardization. Whilst the Group's software covers a number of specific standards relating to health and safety, information security and environmental compliance, the main standards which the Group's products help customers comply with are based around ISO9000 Quality Management. The ISO9000 family of standards are related to quality management systems and are designed to ensure that organisations meet the needs of customers and other stakeholders.

In the Directors' experience with customers, proper quality management can improve business performance, often having a positive effect on investment, market share, sales growth, sales margins, competitive advantage, and avoidance of litigation.

Any organisation which has implemented a standards based quality management system, in the Directors' opinion, represents a potential customer for the Group's products. As of December 2009, more than one million organisations worldwide were independently certified for ISO9001 suggesting that this standard is one of the most widely used management tools in the world today.

Additionally, there are many industry specific standards, which are often based on ISO, which the Group's product can manage in an effective manner. Industries such as Pharmaceutical, Aerospace and Defence, Healthcare, Utilities and Manufacturing represent focus areas for the Group

The primary emerging market for the Group is Healthcare in the USA. In November 2011 the Group was awarded a landmark contract with the US Department of Veterans Affairs (the VA), the contract is to supply the software platform to support the implementation of ISO 9001 across 155 hospitals. The software will be primarily used within one department concerned with the reuse of surgical instrumentation and will underpin the requisite standard operating procedures required to ensure patient safety.

The Directors believe that there is a significant wider opportunity within the VA which is the largest single healthcare system in the USA. In addition to the November contract, Proquis Inc had previously supplied software to 33 VA laboratories and have, since the contract award, won an additional 2 laboratories - Amarillo and Orlando. There are a further 120 laboratories within the VA, which along with other departments, such as nursing services, represent strong business potential.

Moreover, whilst the VA is the largest healthcare system in the USA, it only represents a small percentage of the total market opportunity. According to the American Hospital Association there are 5,754 accredited hospitals in the USA. The VA with 155 hospitals therefore represents 2.6% of the total market opportunity. The Group has therefore quickly established a dedicated sales team in US Healthcare and a pipeline outside of the VA is emerging.

Product Strategy and Portfolio

As authors of Workbench Professional, Proquis Enterprise and KnowledgeWorker® software products, the Group is able to provide complete content lifecycle solutions that enable organisations to meet their Regulatory and Quality Compliance standards whilst helping them to reduce costs and improve efficiency.

Proquis Enterprise

Proquis Enterprise is a highly scalable Internet based platform which helps businesses improve processes associated with the management of Regulatory and Quality Compliance. Proquis Enterprise consists of a number of modules including audit management, personnel/training and competency, document control, customer care, issues and actions, equipment control, management review, health and safety, supplier control and process management.

Allclear

Allclear is a process charting tool which can be run independently as a client application. It can also be used as a module within Proquis Enterprise for displaying process diagrams. A unique charting feature allows text input to be automatically converted to a graphical process chart. This feature has been patented under United States Patent number 5617578.

Workbench

Workbench is the Group's Client Server Regulatory and Quality Compliance software which is modular based and configurable for customers' specific requirements. Through Workbench, documents are controlled and stored in the tailored system which can then be used as a resource by the customer organisation to improve quality, environmental and other standards and compliance management such as audits, change management and document control. Workbench was developed in-house by Ideagen Software Limited and was added to the Group's product portfolio when Filebutton Limited was acquired by the Company in 2011.

KnowledgeWorker®

KnowledgeWorker® is the ECM software system built in-house by Ideagen with Microsoft development tools and designed to work with Microsoft Office and Outlook. KnowledgeWorker® addresses content/document management and collaboration by storing, indexing, classifying and cataloguing information from many sources including electronic documents, scanned documents, web forms, email and output from back office business software applications. The system combines content administration with workflow, thereby integrating information content with business processes. Once the information is captured the search technology in KnowledgeWorker® allows users to then easily retrieve the stored information and view related records and data, unlocking the wealth of data contained in corporate documentation. KnowledgeWorker® is also available as a Software as a Service (SaaS) product and is operated as a multi-tenanted ECM platform.

Data Capture

Ideagen Capture Limited provides integrated scanning and capture solutions that enable customers to transform their paper documents and business forms into searchable electronic documents and information which can be used to power front and back office line-of-business applications. Typically, digitally captured documents are stored either in the Group's on-site KnowledgeWorker® SaaS platform or on other third parties' document management systems. When used with KnowledgeWorker's web services architecture, customers are able to scan directly to the "cloud" and automatically initiate business processes (workflow) to be processed across an organisation and its supply chain or customers.

Staffing and Infrastructure

The Company has implemented a fully integrated company structure with functions covering Sales and Marketing, Customer Services and Support, Research and Development and Finance and Administration represented on the executive management team.

At year end the Company had 55 employees across the following functions - Sales and Marketing - 13, Customer Services and Support - 22, Research and Development - 13, Finance and Administration - 6, Chief Executive - 1. It is envisaged that headcount will increase over the coming year to generate and support future growth.

The Company currently has 5 locations, Stevenage, Matlock, Bristol, Sittingbourne and Schaumburg (USA). The Company has outsourced the delivery of our SaaS platform to Rackspace, a global provider of Data Centre services.

Current Trading & Outlook

We are securing ever larger contracts and have strong recurring revenues and contract renewal rates. Current trading remains in line with market expectations and the Directors look to the future with confidence.

David Hornsby

24 July 2012

The Directors of the Issuer accept responsibility for this announcement.

Ideagen plc

Consolidated Statement of Comprehensive Income for the year ended 30 April 2012

Ideagen plc

Consolidated Statement of Financial Position at 30 April 2012

Ideagen plc

Consolidated Statement of Financial Position at 30 April 2012 (continued)

Ideagen plc

Consolidated Statement of Cash Flows for the year ended 30 April 2012

Ideagen plc

Consolidated Statement of Changes in Equity for the year ended 30 April 2012

Notes

1 Basis of information

The financial information included in this preliminary announcement is unaudited. This information does not constitute the annual report and accounts of the Company for the year ended 30 April 2012. This will be available from www.ideagenplc.com in due course. The audited annual report and accounts of the Company for the year ended 30 April 2011 has been filed with the Registrar of Companies. Consistent accounting policies have been applied in the preparation of this information over the two years ended 30 April 2012.

2 Earnings per share information

Basic earnings per share is calculated by dividing the profit for the year attributable to the owners of the Company ('Earnings') by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is calculated by dividing Earnings by the weighted-average number of ordinary shares outstanding during the year as adjusted for the effect of all potentially dilutive shares, including share options.

In order to better demonstrate the performance of the Company, adjusted earning per share calculations have also been presented which take into account items typically adjusted for by users of financial statements. The adjusted earnings and earnings per share information are shown below.

3 Re-statement of reserves

On 16 March 2010, 4,000,000 ordinary shares were issued at 7.5 pence per share as part of the initial consideration for the purchase of the whole of the ordinary share capital of Ideagen Capture Limited (formerly Root 3 Systems Limited). Share premium of £260,000 was recognised on this share issue in the financial statements for that year. During the year ended 30 April 2011, a special resolution was passed at a general meeting of the Company to carry out a capital reduction under the provisions set out in chapter 10 of Part 17 of the Companies Act 2006. The effect of this was to transfer the balance on the share premium account as at 30 April 2010 of £3,192,851 to retained earnings.

However, the issue of shares on 16 March 2010 fell within the merger relief provisions set out in Section 612 of the Companies Act 2006. Consequently, the premium arising on issue of these shares should have been credited to a merger reserve which would not have been reduced as part of the capital reduction process.

The financial information presented in this announcement has been restated from the figures previously reported in the statutory financial statements for the year ended 30 April 2011. A merger reserve of £260,000 has been recognised and a commensurate reduction in retained earnings made in the consolidated statement of financial position and the consolidated statement of changes in equity as at 30 April 2011. These adjustments have no impact on the results reported in the Statement of Comprehensive income, the consolidated cash flows or on the total of shareholders' equity for the year ended 30 April 2011 or any other accounting period.