12 November 2020

Ideagen PLC

("Ideagen," "the Company" or the "Group'')

Pre-Close Trading Update and Board Changes

Ideagen PLC (AIM: IDEA), a leading supplier of regulatory and compliance software, is pleased to provide an update on trading for the six months ended 31^st October 2020 .

Trading Update

The Board is pleased to report that trading for the first half of the financial year has been ahead of the same period last year and comfortably in line with the Board's expectations . These results underpin the Board's confidence in the Group's prospects for the second half of the financial year and are based upon the continuing execution of a strategy to grow revenue both organically and through acquisitions , maintaining high EBITDA margins through disciplined cost control , generating strong cashflow and increasing annual recurring revenue (" ARR ") as a percentage of total revenue.

The Board considers ARR as the Group's primary growth metric and the driver for long term value.  ARR recognised during the first half is expected to be £24.4m (H1 2019: £20.3m), representing 83% of total revenues, up from 74% in the comparative prior period. The ARR book (being contracted revenue to be recognised over the coming 12 months) has increased by 13% during the first six months to approximately £54. 8m (April 2020: £48. 7m ), arising from both strong organic growth of approximately 7% (14% on an annualised basis) and 6% of acquired ARR from the acquisition of Qualsys in August 2020 . 

The Group expects to report total revenue up 7% at approximately £29.2m (H1 2019: £27.3m ) and adjusted EBITDA* to have increased by 25% to approximately £10.0m (H1 2019: £8.0m). Organic growth was driven by both customer expansion and new customer logo wins across verticals including Healthcare, Life Sciences and Financial Services. The Group won 270 new customers in the period including KPMG, Reata Pharmaceuticals, Bank of Greece, NATO and the Lighthouse Laboratory and successfully expanding existing customers such as GSK, Lelam and Discover Financial Services .

Cash generated by operations during the first six months is expected to be in excess of 90% of adjusted EBITDA* resulting in a gross cash balance as at 31 October 2020 of £12.1m and gross bank borrowings of £40.0m.  Net bank debt at the period end of £27.9m leaves the Group comfortably within banking covenants and on a robust financial footing.

Directorate Changes

The Group is pleased to announce two changes to bolster the corporate governance environment and its Board and ensure there is an appropriate balance of relevant skills, experience and independence to support the Group and its growth . Following these changes, the Board comprises   3 Executive and 4 Non-Executive Directors.

Julian Clough will today join the Board as a Non-Executive Director and Chairman of the Audit Committee. The current Chairman of the Audit Committee Alan Carroll remains on the Board and will continue to chair the Remuneration Committee until his retirement from the Board in July 2021 following his nine years as an independent director which is in line with best corporate governance practice. The Board will start a search process to replace Alan in the first quarter of 2021. 

Julian joins Ideagen following a 40 - year career in accountancy spanning audit, financial investigation and transaction services. Most recently Julian served as a Partner at Mazars having previously served as a Partner at both BDO and RSM Tenon. Julian qualified as a Chartered Accountant in 1985 with Coopers and Lybrand (now PwC ) and has advised on over 300 transactions including Ideagen's AIM flotation in 2012 and the MBO and subsequent IPO of Games Workshop Group PLC .

Barnaby Kent has today stepped down as a statutory director of the Company. Barnaby remains Chief Operating Officer and a key member of our Senior Leadership Team. His primary focus will continue to be the development of our operating structure and our people together with ownership of the Group's acquisition integration process.

Ben Dorks, Chief Executive Officer of Ideagen commented:

"I am pleased to report another excellent start to Ideagen's financial year. We continue to execute our strategy, delivering growth both organically and through acquisition , and have invested in the Group without stretching our disciplined approach to costs. Our business model has remained resilient throughout the pandemic with growth being driven from across a number of market verticals.

Cash generation has been strong which , coupled with further growth in new SaaS recurring revenues and an increase in repeat business from our growing customer base , provides a strong platform for the second half. Given the size and longevity of the Regulatory and Compliance market and the Group's position as a leader in the space , the Board is optimistic about the Group's continued growth prospects .

We are delighted to welcome Julian Clough to the Board. His appointment brings a seasoned financial expert to the Board and his blend of transaction and audit experience will be a significant asset to the Group. I thank Barnaby Kent for his service as a director and look forward to his ongoing contribution to the Group's growth ."

*Earnings before interest, tax, depreciation, amortisation, share based payments, acquisition costs and other exceptional items.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Enquiries:

The following disclosures are made in accordance with Schedule 2(g) of the AIM rules

Julian Simon Clough, age 60, has held the following directorships/partnerships within the last 5 years:

RSM Tenon PLC entered insolvent liquidation in August 2013. Mr. Clough resigned from his position as an employee partner of RSM Tenon in May 2013. At no point during his tenure was he a statutory director of RSM Tenon plc.

There are no further disclosures to be made in accordance with Schedule 2(g) of the AIM Rules.

About Ideagen plc

Ideagen is a UK-headquartered, global technology company quoted on the London Stock Exchange AIM market (Ticker: IDEA.L).

A global supplier of regulatory and compliance solutions, Ideagen provides a common software platform and an integrated risk- based approach to meet multi-industry standards, enabling compliance with relevant laws, policies, and regulations.

 The Group provides software and services to organisations operating within highly regulated industries such as life sciences, healthcare, banking and finance, insurance, aviation, and aerospace and defence, with its main operational premises spread throughout the UK, EU, US, Middle East and SE Asia.

Currently, more than 5,700 organisations use Ideagen's products including eight of the top 10 UK accounting firms, all of the top aerospace and defence companies and 75% of the world's leading pharmaceutical firms.  Ideagen's diverse and varied customer base includes many well-known, global brands such as British Airways, Aggreko, BAE, Ryanair, US Navy, KLM, BBVA, Bank of New York, Commerzbank, Meggitt, Heineken, Johnson Matthey, Haeco Group and European Central Bank. As well as this, Ideagen counts 250 hospitals across the UK and US amongst its client base. For further information please visit  www.ideagen.com .