Software solutions and services supplier IDOX plc (IDOX.L) Tuesday posted a decline in fiscal 2009 pre-tax profit, reflecting goodwill impairment charge and restructuring costs, while revenues were down 5% on extended delivery schedules and increased mix of longer term contracts. However, the company said it is "confident of a good performance in 2010."
The company's full-year pre-tax profit dropped to GBP 4.48 million from GBP 6.57 million a year earlier. Profit for the period stood at GBP 3.46 million compared with GBP 4.78 million last year.
Fiscal 2009 normalized pre-tax profit, excluding amortization, impairment, share options costs and exceptional charges, amounted to GBP 6.7 million compared with GBP 7.6 million in 2008. Normalized profit for the year declined to GBP 5.63 million from GBP 5.81 million a year ago.
On a per share basis, 2009 earnings fell to 1.00 pence from 1.38 pence, while normalized earnings per share slid to 1.64 pence from 1.70 pence in the prior year period.
Revenue for the year ended 31 October 2009 decreased to GBP 32.16 million from GBP 34.03 million in the comparable period, reflecting extended delivery schedules on software contracts, increased mix of longer term contracts and challenging market conditions that affected the recruitment business.
IDOX's software business, that accounts for 78% of Group revenues, delivered £25.1 million, of which around 52% were recurring, up from 46% in the previous year.
Meanwhile, the Recruitment and Training business reported a decrease in revenues to GBP 3.8 million from GBP 4.4 million a year earlier, reflecting the rapid deterioration in the employment market.
Solutions division's revenues rose to GBP 3.4 million from GBP 2.6 million, as a result of a 6-month contribution from J4B, purchased in April 2009, providing content to local authorities and other public sector bodies.
Operating profit for the latest year slipped to GBP 4.94 million from GBP 7.21 million in the earlier year period.
The associated 17% headcount reduction since October 2008 resulted in an exceptional charge of GBP 0.4 million. Operating costs were reduced 5% to GBP 17.4 million, resulting from the tight cost controls, the completion of the integration of acquisitions and productivity gains. The company said that the full benefit of these savings would be felt in 2010.
Moreover, the company reported a tax charge of GBP 1.0 million versus a GBP 1.8 million in the 2008 period, reflecting a reduction in the Group's effective tax rate to 23% from 27%, following recovery of prior-year research and development credits.
IDOX stated that there were a number of larger contract wins, where delivery and therefore revenue recognition extends into 2010. Thus, the contracted order book grew 60% year-on-year to GBP 6.1 million.
In addition, the board proposed a final dividend of 0.12 pence to give a full-year dividend of 0.20 pence, reflecting the board's continuing confidence in the long-term strength of the business and its healthy operating cash generation of 63%.
IDOX.L is currently trading at 11.30 pence, down 0.45p or 3.83%.
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