Idox plummets after slower-than-expected first half

AIM-listed software group Idox saw shares drop sharply on Wednesday morning after the company's bottom-line guidance for the full year came in below analysts' expectations.

AIM-listed software group Idox saw shares drop sharply on Wednesday morning after the company's bottom-line guidance for the full year came in below analysts' expectations.

Idox, which provides software and services to the UK public sector and global engineering information markets, said that it has made underlying progress in all of its businesses in the first half ended April 30th but has faced a slower-than-expected six months.

The group said that its public-sector businesses have continued to increase market share in core markets and are now starting to bid for contracts outside the UK. However, while the sales pipeline in the Engineering Information Management (EIM) division has grown, closed order values are down year-on-year.

To reflect the "uncertainty of timing" as to when certain growth opportunities will come through, the firm now expects full-year earnings before interest, tax, depreciation and amortisation (EBITDA) to be "no less than £18m".

The current consensus estimate is for EBITDA of around £21m in the year ending October 31st 2013, up from £16.7m the year before, according to analyst David Johnson from Northland Capital Partners.

"FY13 EBITDA of £18m would represent growth (c. 7.5%) but whilst constrained spending in the public sector is well known, the softness in the newer EIM division will raise concerns," he said.

The share price was down 19.13% at 37p in early trading on Wednesday.

Idox's Chief Executive Officer Richard Kellett-Clarke said: "Whilst the first-half performance is disappointing and has been impacted by delays in new Engineering Information Management licence sales in particular, we believe we remain very well positioned."

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020
The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020