"Medforce is a growing, profitable and cash generative organization that has successfully developed its Center suite of enterprise information management, workflow, and compliance software since 1993. Ideagen has always acquired organizations with strong intellectual property, integrating that IP with our existing product suite.
As an example, Medforces Center suite of products is used by more than 300 customers globally, supporting business process productivity and legal compliance, and we fully expect to be presented with enhanced cross-sell and integration opportunities going forward, with Medforces CommandCenter, ContentCenter and SignCenter of particular interest."
The 2019 forecast EPS of 4.8p is low unless the company has a problem. Organic growth of 10% puts them at 4.6p and the Medforce acquisition should add another 0.2p (perhaps thats how the 4.8p forecast was formulated!). I would hope we are looking at for 5p minimum.
I dont need convincing about the prospects for the company but given I now have a £ holding worth well over 6 figures I am trying to trade it smartly.
If you look back at the PER based on adjusted diluted EPS on the actual financial year end dates of the last few years you find x20 (30/4/16), x28 (2017) and x26 (2018). On 5p and a sensible historic PER of x25 the shares in 30/4/19 should be at 130p, todays price.
So for me at this level they are probably up with events (unless there is another non-diluting acquisition). I hope they overshoot...in the mid 130s I will be starting to sell and at 140 I would go down to 50-70% of what I currently hold. What do I know but that kind of strategy has worked well in the past with this stock.
Hi Willow - IDEA have indeed been tipped in this week's Shares Magazine, and it's an interesting article.
It discloses that management have a 200p share price target and notes that current forecasts could be beaten "by a wide margin".
Other useful snippets:
GRC "is a $7bn-a-year GRC market yet it remains highly fragmented. Ideagen, which has been around since 1993, wants to act as an industry consolidator as well as driving consistent organic growth."
"It aims to double revenue and profit every three years and has met or beaten those targets in the past. For example, in 2015 it reported revenue of £14.4m and £3.6m pre-tax profit. The year to 30 April 2018 is expected to show £36.1m of sales and £9.7m of pre-tax profit. Throughout this growth the company has remained highly cash generative and paid modest dividends.
The US is now its number one growth market, as it is the world£s single biggest place for GRC spending. That means accelerating acquisitions growth, such as April£s $8.7m purchase of Medforce, a healthcare compliance business."
"The net of regulation red tape and compliance accountability is getting ever tighter around industries and organisations across the world. The next big one is EUwide General Data Protection Regulation (GDPR) which comes into force on 25 May and is the latest in a long list of rules designed to keep us better protected.
All this puts UK software supplier Ideagen (IDEA:AIM) in a sweet spot thanks to its wide range of off-the-shelf specialised tools. The Midlands-based company concentrates on what it calls the governance, risk and compliance (GRC) space, providing information management solutions to highly regulated industries. Think healthcare, aviation, banking/finance, complex manufacturing, defence and energy."
I was curious about the Falklands contract win. Research shows that it has a population of circa 3000. This is less than the patient role of most UK GP Surgeries ( 0.6 GP's per 1000 population).
If this contract win deserves publicity they must be scraping the barrel.
It's not even as if it's an important strategic win a new country.
"Ideagens quality management software to be rolled out across Falkland Islands health and social services
17 May 2018
King Edward VII Memorial Hospital will implement Ideagens Q-Pulse software for improved quality control, visibility and efficiency of safety and service levels
Ideagen is to work with the Falkland Islands Health and Social Services Department to help improve local services for residents and visiting tourists.
Based in Stanley the Islands capital King Edward VII Memorial Hospital is the only dedicated medical facility within the Falklands. The hospital will be rolling out Ideagens Q-Pulse software to centralise documentation and data management, while standardising operational processes.
Q-Pulse is used by hundreds of healthcare organisations globally and will provide staff working for the Health and Social Services Department with control, visibility and improved continuity when following practices based closely on healthcare standards, which are currently mandatory in the UK.
As long as Hornsby is in an executive role I think its ok. If he had gone non-exec I would have a little worried. Great results . Always would love to see the organic growth above this 10-11% number but their acquisition strategy seems so successful it doesnt seem to matter. I think well see some upgraded 2019 numbers come through soon which will support a higher share price. They look far too low right now.
Ideagen appoints new CEO to drive strategic objectives
A trading update from Ideagen, the AIM-listed specialist in quality, safety, risk, audit and performance management software, shows that firm has grown revenue and adjusted EBITDA for the ninth consecutive year.
The company is expecting to report revenue up 33% to c£36m and adjusted EBITDA up 40% to c£11m for the 12 months to the end of April 2018. Organic revenue growth looks set to come in at 11% (Ideagen has been acquisitive, including a purchase made in the US just last month).
To sustain the execution of its objective of doubling revenues and adjusted EBITDA every three years, Ideagen is making some adjustments to its leadership structure. Former CEO, David Hornsby, has become Executive Chairman with a specific remit around strategy, M&A and Investor Relations. Ben Dorks (former Chief Customer Officer) will take Hornsbys position as CEO focusing in particular on operational performance, customer acquisition and retention, and product development. Both seem like sensible moves to us, with the Execs playing to their strengths."
Agreed, all seems t be positive. However I must admit to some reservations about the board changes. The UK Corporate Governance Code requires a genuinely independent Chairman and ot someone who was previously Chief Exec. This is for a reason; it helps foster independent thinking , encourages challenge and helps avoid "Group Think". I realise that as an AIM Company Ideagen does not have to comply, nevertheless I don't think it's good. WE really need someone independent and heavyweight who can challenge the executives especially wrt how they account for contracts - always a weak area in IT and Software companies I'm afraid.
"We are pleased to report that the Group has continued to perform well in delivering another year of high quality earnings growth underpinned by strong cash generation. We continue to grow organically and to increase the percentage of our revenues derived from recurring business. The Group has significant contracted work in progress, a growing base of recurring revenues and a strong pipeline of new business opportunities which provides the Board with confidence for the current year and beyond."
"Sunderland City Council ensures its Corporate priorities remain on track with Ideagens software
10 April 2018
The City of Sunderland local authority will monitor strategic and operational performance indicators and actions through Ideagens Pentana Performance product
A major UK city council is to ensure its four-year corporate plan remains on track by implementing a software system developed by Ideagen.
Sunderland City Council will monitor and track a series of performance indicators linked to actions, milestones, and accountabilities through Ideagens Pentana Performance system.
Its Corporate Plan, launched in 2016 and set to end in 2020, is a key element of the Councils overall Performance Management framework.
Pentana Performance will replace a series of manual processes, spreadsheets and access databases, allowing Council staff to electronically manage performance data through a single system, highlight areas of improvement and react quickly to risks.
I think the telling comment here is the final one. Ideagens story is a fantastic one that has a long way to run but growth is steady, not spectacular, and a mid 20s multiple coupled with organic growth of 10% wont prompt much movement up in the shares. The acquisition added 0.2p of EPS to forecasts, nothing thats going to make a significant difference on its own. The U.S. foothold seems to make enormous sense and im sure most of the new contracts will continue to be from this region. My hope is they increase in size and thats the driver of faster earnings growth. As always looking forward to seeing the story unfold.
First acquisition Stateside provides platform for faster growth
RED TAPE AND compliance software supplier Ideagen (IDEA:AIM) has made its first
acquisition in the US. We believe this is a significant stepping stone that could
realise substantial value for the company and shareholders.
New York-based Medforce provides productivity and legal compliance solutions that
help streamline processes for healthcare organisations and prepare them for auditing.
Healthcare is one of the most highly regulated industries in the world. Ideagen is paying $8.7m for Medforce, or about £6.1m at current exchange rates.
There are several things to like about the purchase. First, it gives Ideagen a firm base across the pond. About half of new business currently being won by the company is in the US. Medforce is also profitable, chalking-up about £0.7m of
earnings before interest, tax, depreciation and amortisation (EBITDA) on rough £3.4m revenue in 2017.
A high proportion of those revenues are recurring in nature, 82% according to Ideagen.
Paid out of cash and debt facilities, that means no new shares are being issued so
there is zero dilution to existing Ideagen shareholders.
While analysts raised forecasts for the full year to 30 April 2019 to £11.4m of pre-tax profit on £42.8m revenue, we believe there is scope to outstrip those estimates.
SHARES SAYS: 
Ideagen remains a high quality business that deserves its premium 2019 price to earnings multiple of 24.1"
"Ideagen (IDEA) has bought Medforce Technologies a healthcare software business for $8.7m (£6.2m). This marks the information management software suppliers first US acquisition, and will be funded with cash and existing debt facilities.
Medforce has all the hallmarks of an astute acquisition. It is growing, profitable and cash generative. Sales for the year to December 2017 of $4.7m comprised more than 80 per cent recurring revenues, while cash profits and post-tax profits were $1m before $400,000 of non-recurring costs. Its Center platform is used by more than 300 US-based healthcare customers. All being well, the business should enhance Ideagens earnings for the year to April 2019.
Ideagen is an acquisitive company: it made four purchases last financial year. We learnt within the recent half-year results that these have integrated to plan, boding well for Medforces performance under new ownership.
Medforce should bring further growth in the US, while boosting Ideagens recurring sales. At 116p, the shares now trade at a demanding 28 times finnCaps forecast adjusted EPS of 4.2p for the 2018 financial year. But they are also up 43 per cent on our buy tip, and we dont expect this acceleration to tail off. Buy."
Very happy they are funding with debt. This is why cash generation rather than paper profits is so important. In 6 months theyll be debt free again id bet. Plus its in the fastest growth market. Ticks all the boxes!
"Dawn Food Products, Inc. to support enterprise risk management across its global operations with Ideagens software
29 March 2018
The US company will implement Pentana Audit across its global internal audit operations including manufacturing sites in the USA, Mexico and Europe
Dawn Foods Products, Inc., providers of quality bakery products and innovative food solutions, is to work with Ideagen to improve processes around enterprise risk management across its global operations.
The US-based foods company will implement Ideagens Pentana Audit software for its worldwide internal audit operations which includes operational audits of its distribution centres and key manufacturing sites in Michigan, USA, Naucalpan in Mexico and Amsterdam, the Netherlands.
Pentana Audit will also help Dawn Foods internal audit team conduct financial audits as well as extensively support external auditors during the business interim and year-end financial audits.
Vadiraj Chenji, Director of Internal Audit at Dawn Foods, said Pentana Audit will bring with it efficiency and time savings as well as improve enterprise level risk management (ERM).
"Ideagen to expand operations in Southeast Asia
26 March 2018
Ideagen, the global software firm, is expanding its operations in Southeast Asia.
The project involves Ideagens office in Kuala Lumpur, Malaysia, and will enhance the companys support, development and service capability for its 3000+ client base.
The expansion, relocation and refurbishment will strengthen Ideagens operational foundations across the Asia-Pacific region as well as future proof the business against potential operational risk.
The new Kuala Lumpur office will act as a central hub for Ideagens expanding business in the region following prominent projects with AirAsia, Lion Air, HKExpress and Haeco. Around 40 members of staff will be located there, with Ideagen already adding software development expertise.
Barnaby Kent, Ideagens Chief Operations Officer, said the expansion was a natural step for the company and would cement Ideagens place as a leader in the Governance, Risk and Compliance (GRC) marketplace.
He added: In recent years, we have witnessed rapid growth both through acquisitions and organically and this expansion project is a natural next step in Ideagens journey.
There's been no volume has there. Bit of a change today with 1.3m of volume and an overdue squeeze upwards in the stock. Hopefully something massive will be announced tomorrow!!! (Always good to dream)
"Saudi Ground Services Company choose Ideagen to improve safety, quality & security management
19 February 2018
SGS will implement Ideagenfs Q-Pulse software across 27 locations in the Kingdom of Saudi Arabia
Saudi Ground Services Company (SGS) ðj, the leading ground handling services company in Saudi Arabia, is enhancing safety, quality and security management across the Kingdom using software from Ideagen.
Ideagen Q-Pulse has replaced a series of manual and paper systems currently in use by SGS to maintain compliance to internal standards and certifications.
Q-Pulse will become SGSf electronic centralised management system, helping 27 SGS locations in the Kingdom to streamline document creation and control, audit management and provide functionality for non-conformance, deviation and analysis.
"MIDAS SHARE TIPS UPDATE: Ideagen, the clever software firm that safeguards fighter jets, trains and hospitals, is flying high
By Joanne Hart, Financial Mail on Sunday
Published: 22:39, 27 January 2018 | Updated: 22:39, 27 January 2018
Broken fences can be a frustration for farmers, trying to keep livestock from straying. But they are a serious problem for the railways too, as wandering sheep or cattle substantially increase the risk of train derailment.
Nottingham-based software business Ideagen helps to reduce that risk with a neat little product that allows anyone working on the railways from train drivers to station managers to report incidents when they spot them.
Around 70,000 people employed in and around the UK rail network can log these incidents on mobile phones or laptops. The information is sent to a central site and handled accordingly.
Clever ideas like this have helped Ideagen to more than triple in size since Midas first recommended the firm in 2014. Then, shares were 33p, turnover was £9 million and profit was £2.6 million.
Today, the shares are 118½p and brokers expect turnover of £36 million and profit of £9.7 million for the year to this April.
Chief executive David Hornsby has transformed the business since taking up his post in 2009 and is highly optimistic about the future, confident that sales and profits can double over the next three years. If all goes according to plan, the shares should continue to deliver for investors.
The rail industry is a significant customer for Ideagen but the business works with clients in sectors from aerospace to food and drink to banking. In each case, the companys software helps firms to manage risk, comply with regulations and improve the way employees work.
Airlines such as British Airways and Ryanair use Ideagen to enhance safety procedures, while BAE Systems uses Ideagens software to ensure Typhoon fighter jets are fit to fly.
Ideagen also works with 125 of the 165 NHS Acute Trusts, helping to digitalise their mountains of paperwork. Once, this was a lucrative contract but shortage of cash has slowed business down considerably, even though moving paperwork online would have a huge long-term effect on productivity.
To reduce his reliance on Britain, Hornsby is increasing Ideagens international presence so 70 per cent of new contracts come from outside the UK, primarily from the US but also Europe and Asia. The European Central Bank, for example, uses Ideagen software to help compile internal audits.
Interim results last week showed strong growth, with half-year profits to October 31 up 56 per cent to £4.1 million.
The dividend rose 15 per cent year-on-year to 0.078p and a full-year payout of 0.2p is pencilled in a small figure as most of Ideagens spare cash is reinvested in the business.
Midas verdict: Ideagen has performed well over the past four years but the shares have further to go. At 118½p, the stock is a strong hold. New investors may also be tempted to grab a few shares."
The article focussed on a 122% increase in recurring business and that the company has stopped bidding for low margin work with the nhs to focus on the more lucrative grc business, subscription based.
The potential for growth for the next 5 years is very high, acquisitions and further recurring business. I expect further upgrades from brokers this year.
I haven't seen that article but I wouldn't think there is too much juice left in this re-rating and for me current fair value is 120-125 area. The current Finncap 2019 eps forecast of 4.6p puts them on a 1 yr PER of around 25. Thats only a 10% eps rise on 2018 however so I would expect earnings for 2019 of more like 5p, x a 23-25 multiple should put them in the 115-125 range. Meaningful acquisitions will change those calculations unless they are particularly diluting.
Its good to see they have taken decisive action to focus away from the NHS where the margins are skinny towards increasingly international GRC business where the contracts can be bigger and higher margin. They have made it as clear as they possibly can that acquisitions are extremely likely so it will be really interesting to see how this plays out and the bite size they go for. I guess the really bold move would be buying something in the U.S. in one of their already strong verticals which could help them accelerate their overseas expansion.
Extremely impressive - loving the high recurring income at 63% of revenues, plus the increase in international sales.
Note also the CEO's comments about further acquisitions being likely and the long-term confidence in IDEA's markets:
"The Group continues to be committed to a 'buy and build' strategy and is in discussion with a number of potential acquisition targets which the Board believe would enhance the Group and support our ongoing growth strategy.
Current Trading & Outlook
The market for GRC management solutions remains fragmented and the drivers are long term and highly strategic. Trading continues to remain robust while a healthy pipeline reinforces confidence in our forecasts.
We have been aware of the economic and political conditions in the UK for some time and the Group has responded by developing a strong and growing presence in a number of global markets. Our success in winning new business together with our increasing levels of recurring revenue and repeat business from our 3,000 strong customer base, provides us with confidence in the future prospects of the Group."
Here's the main financial highlights:
"Ideagen PLC (AIM: IDEA), a leading supplier of Information Management software to highly regulated industries, announces its unaudited interim results for the six months ended 31 October 2017.
· Revenue increased by 43% to £17.2 million (2016: £12.0 million)
o Underlying organic revenue growth of 13%
o New bookings increased by 78% to £10.8m (2016 : £6.1m)
· Recurring revenues increased by 60% to £10.8 million (2016 : £6.7 million)
· SaaS revenues increased by 122% to £3.9m (2016 : £1.7m)
· Recurring revenues represent 63% of total revenue (2016: 56%)
· Adjusted diluted EPS** increased by 38% to 1.73p (2016: 1.25p)
· Adjusted EBITDA* increased by 52% to £4.7 million (2016: £3.1 million)
· Adjusted PBT** increased by 56% to £4.1 million (2016: £2.6 million)
· Cash generated by operations of £3.7 million (2016: £3.0 million) before a payment to HMRC of £0.8 million received from option holders in the prior year for taxes on options exercised
· Net cash of £5.9 million (30 April 2017: £4.2 million; 31 October 2016: £4.8 million)
· 15% increase in interim dividend to 0.078p (2016: 0.068p)
*Before share based payments and exceptional items
**Before share based payments, amortisation of acquisition intangibles and exceptional items
· Robust growth across all GRC product areas
· Acquisitions made in 2016-17 fully integrated and meeting expectations
· Strong momentum in sales in the USA, Europe and Asia-Pacific Regions
· 112 new logo customer wins - 70% outside of the UK
· Further progress within cloud business
o 66 new logo SaaS customer wins
o Wins include Boston Scientific, Dun and Bradstreet, Roche and RATP Group
· 46 new logo on premise customer wins including Verizon, Hiscox, Siemens and US Navy
· Strong customer retention - 96% maintenance and support contract renewal rate
· Significant new business from the existing customer base including BAE, Danone and BDO
· Expansion of Malaysian and Bulgarian R&D resources
David Hornsby, CEO of Ideagen, commented: "We are delighted to report on another strong performance from the Group across all of our vertical markets and geographies during the first half of the year.
The Group has achieved growth both organically and from the acquisitions made in the previous year as we continue to execute against our proven strategy. We are particularly pleased with the strong growth in our SaaS revenues and our sales execution and momentum in the USA, Europe and Asia-Pacific regions.
Current trading remains robust and in line with management expectations. The Board remain confident in the outlook for this year and beyond."
"Transavia Airlines extends Q-Pulse safety system for risk and flight data monitoring
15 January 2018
The Dutch airlines software upgrade to the latest version of Ideagens Q-Pulse system will simplify reporting to ECCAIRS
Transavia Airlines, the Dutch low cost airline, is to expand its software system from Ideagen in a move that will enhance risk management and flight safety reporting.
The airline, which has been in operation for over 50 years, will upgrade its Q-Pulse system, adding Ideagens Q-Pulse Risk while integrating with Aerobytes Flight Data Monitoring (FDM) system.
The software upgrade will allow Transavia crew to easily complete and submit safety reports, such as ECCAIRS, required for Transavias European legislation requirements including those of the European Aviation Safety Agency (EASA).
The addition of risk and FDM will boost Transavias risk visibility, allowing them to quickly spot potential weakness through the BowTie methodology for risk management. FDM integration will enable safety staff to assess individual flights, providing increased visibility of operational and safety data.
Maikel van den Ham, Safety Engineer at Transavia Airlines, said: With this software upgrade, and the additions of Q-Pulse Risk and FDM integration, we will be provided with a better view of what is happening in terms of safety and risk management within the airline.
By gaining as much data as possible from across the business, including from each flight thanks to the FDM addition, we will be able to spot and act earlier on any trends that emerge.
Maikel added: By making the ECCAIRS reporting process simpler, we will be able to meet the requirements of EASA and our national legislator more easily.
Transavia Airlines has been operating for over 50 years having been established in 1965. Launched in the Netherlands, the airline also has a base in France and also flies from more than 20 countries in Europe and the Mediterranean. The airline is currently part of the AIR FRANCE KLM Group, the largest aviation group in Europe.
Ideagen is the leading global provider of aviation safety management and reporting solutions. Currently, more than 300 aviation organisations including over 100 airlines use its products and services globally.
Clients in the aviation space include the likes of Emirates, Ryanair, flybe, Brussels Airlines, Air Asia and Spirit Airlines as well as the International Airlines Group - owners of British Airways, Vueling, Iberia and Aer Lingus."
Nice to see but these NHS contracts are small fry, I am waiting for the game-changing $5m contracts to arrive, perhaps from the U.S. Thats what will really move things ahead!
Results should be out in next week or so, looking forward to that.
Ideagen logoKings Interventional Facilities Management (IFM) is working with AIM-listed Ideagen to deploy its Q-Pulse quality, compliance safety and operational risk management platform. Kings IFM is a Limited Liability Partnership controlled by the Kings College Hospital NHS Foundation Trust. It provides fully managed services across all sites within the Trust, including Kings College Hospital, Princess Royal University Hospital and Orpington Hospital.
Kings IFM aims to use Q-Pulse to centralise and standardise document control giving staff access to policies and Standard Operating Procedures from a single location. Kings College Hospital is already using Q-Pulse in areas such as Haematology and Cancer Services to help ensure compliance with ISO 9001 quality management standards. In the future, it also plans to use Q-Pulse to support the reduction of risk and adverse incidents.
Things appear to be progressing well for the Ideagen; its H1 trading update in November revealed that revenue and adjusted EBITDA were expected to be significantly ahead of H1 FY16, and underlying organic revenue was up c.12%. UK healthcare remains a significant part of its business, where, across all products and services, it currently supplies 75% of NHS Trusts. Budgets remain under tremendous pressure in the NHS as the population ages and demands on the service increase, but the need for greater efficiency in the sector will create further opportunities for Ideagen."
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