Ideagen PLC (AIM: IDEA), a leading supplier of Information Management Software to highly regulated industries, today provides an update on trading for the six months ended 31 October 2018.
The Board is pleased to report that trading has remained strong in the first half of the financial year and that revenue and EBITDA are both expected to be significantly ahead of the same period last year and in line with management's expectations. This has been achieved through both organic revenue growth and the acquisitions of Medforce (acquired in April), InspectionXpert and MK Insight (both acquired in September)
The Company has a clear strategy to grow revenues organically and maintain high EBITDA margins whilst transitioning from a perpetual licence to a SaaS based subscription model. The successful execution of this strategy will provide an even more robust business model and provide a higher quality of earnings over the medium term without impacting the short-term profitability of the business.
Historically the board has measured performance using a number of KPIs such as total revenue growth, organic revenue growth, EBITDA and EPS growth. The board will now also report total bookings growth and SaaS booking growth which are both important metrics during the transition period and beyond.
Strong customer demand and sales execution in the period indicates that the transition is progressing successfully and is ahead of schedule. Total like for like bookings growth increased by 34% and total like for like SaaS bookings increased by 80%.
Given the momentum of our SaaS business the Company now expects to generate 74% of its revenues from recurring contracts by the end of 2020, up from the 70% previously anticipated. Organic revenue growth in the period was 8% which, in the context of an accelerated SaaS transition, represents a strong performance.
The Company continues to compete and win new business within the UK and international markets reflecting the Company's global expansion. During the period the Company won 120 new customer logos including GlaxoSmithKline, Boston Biomedical, Virginia State Office, McLaren, Mercedes AMG, Keolis and Cancer Research.
At the period end the group had net debt of £1.3 million (30 April 2018: net cash of £0.8 million) after spending £24.3 million on acquisitions and raising £19.4 million net of costs on a share placing. Operating cash generation in the period remained strong.
Ben Dorks, Chief Executive Officer of Ideagen, commented:
"I am pleased to report another excellent start to Ideagen's financial year. Our core markets are strong and underpin the demand we have seen this half. We continue to execute our strategy, delivering growth and investing in the business whilst tightly managing the cost base. The Company has continued to make acquisitions which have further enhanced our global reach, customer base and product capability.
Cash generation has been robust which coupled with further growth in new SAAS recurring revenues and an increase in repeat business from our growing customer base provides a strong platform for the second half
The market opportunity remains large and long term and given the Group's position as a leader in the Governance, Risk and Compliance market, the Board is optimistic about the Group's continued growth prospects."