IDOX

Public sector focused IT services business IDOX published strong first-half numbers in June, with acquisition-enhanced sales doubling to £7m and a pre-tax profit of £214,000 dwarfing the company’s previous full year performance.

To chief executive Andrew Fraser, these figures reflect the group’s sustained patience. ‘When we floated,’ he explains, ‘we said it would be three or four years until we would start to hit profits. Now we’re bigger than we have ever been, have more cash and are more profitable.’

IDOX divides its activities into three main areas: software supply (principally relating to document and knowledge management), staffing solutions (that is, recruitment and training) and information services (including advisory and consultancy work). These services are offered to local authorities, other public sector organisations and, to a lesser extent, private sector businesses. The strong focus on public sector business remains because, as Fraser outlines, although the Government’s campaign to force local authorities online is gathering pace, around 50 per cent of the market has still to be addressed.

For the current full year, profits before tax and goodwill are expected to rise 75% to £1.4m on sales up 50% to £14.4m. Profits of £2.3m are forecast in 2006, with predicated earnings of 1.3p for that year placing the shares on a prospective p/e of 8.7. Buy.