Profit from better medical records – that’s just what doctor ordered!
EACH year, around half a million planning applications are submitted to local authorities up and down the country. Homeowners want to build an extension, businesses want to expand their factories, developers want to build new houses. Whatever the plan, local authorities need to know.
The process is never easy but it used to be much worse, with endless paperwork, lengthy phone calls and hours spent in council offices. Today, applications are largely done online, which is smoother, faster and less painful for both applicants and local authority personnel.
The technology that makes this possible is invariably provided by
Idox, an AIM-traded company that works with over 90 per cent of local authorities in the UK.
The firm specialises in software for the public sector, helping Government bodies and the NHS to save money and become more efficient through better use of IT. Numerous hospitals use Idox tools to make sure beds, equipment and even medical notes are in the right place at the right time. Last year alone, Idox tracked 11.5 million patient records so that doctors and nurses knew where they were and what they said.
The group provides the technology behind elections too, ensuring that voting slips are sent out, people can vote online and the results can be digitally tracked.
Idox shares are 35p and should show strong gains over the coming years, under chief executive David Meaden and his team.
Idox was a digital pioneer, with a track record dating back to the 1990s and a long list of loyal customers. But the company lost its way in recent years, overexpanding and taking on too much debt. Meaden was appointed in June 2018 to turn the business round and he is right on track.
Highly experienced, Meaden has spent decades working in the software industry, including a 12-year spell at the helm of Northgate Public Services, during which time the business expanded fourfold before being sold to a private equity firm in 2014.
Since he arrived at Idox, the board has changed, management has changed, loss-making businesses have been sold, debt has been brought under control and the company has adopted a more collaborative approach to software development, research and sales.
Some impressive new shareholders have bought stock too, including billionaire George Soros, who has amassed a holding in Idox of more than 12 per cent.
Early next month, the group will unveil results for 2019 that should underline the progress made to date and plans for future growth. Sales and profits are expected to be broadly similar to 2018, at £68 million and £7.7million respectively. This year however, brokers forecast revenues of £73 million and a surge in profits to £13.5million, with more strong growth pencilled in for 2021.
Idox was forced to can its dividend in 2018 but Meaden is hoping to reintroduce a payout as soon as practicable, ideally within a couple of years.
Based in Theale, near Reading, around two-thirds of Idox revenues stem from UK public bodies. But the group also works with thousands of companies, from water firms to bus operators, supplying software that improves the way they do business and the service they provide. There is a wellregarded compliance division too, which helps firms train employees so they are abreast of any regulation that applies to their industry.
This private-sector division works with customers from around the world, including Canada, Australia, Germany and Holland. MIDAS VERDICT: Idox shares hit 77p in the summer of 2017. By the following year, they had fallen to 27p. They have recovered since then, to 35p, but the best is yet to come. The company has developed a strong reputation in its field and business should rebound under Meaden’s stewardship. Idox may even attract bid attention once it really starts to motor. Buy.