IDEA.L Regulatory News (IDEA)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

19 May 2020

Ideagen PLC

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

Pre-Close Trading Update

Ideagen PLC (AIM: IDEA), a leading supplier of Information Management software to highly regulated industries, is pleased to provide an update on trading for the year ended 30 April 2020 and the outlook entering the new financial year.

The publication of the Company's full year results for the period to 30 April 2020 will be slightly later than normal this year and are expected to be published on or around the 22nd September 2020. This follows discussions with the Company's advisers and auditors and is due to the prevailing circumstances surrounding the COVID-19 pandemic and the practical difficulties that it will impose upon the audit process.

Trading Statement

The Board is pleased to report that trading for the year to 30 April 2020 was strong and results are expected to be in line with market expectations. This represents the Group's eleventh consecutive year of revenue and adjusted EBITDA* growth.

The Group expects to report revenue up 21% at approximately £56.6million as compared to £46.7million in the previous financial year. Adjusted EBITDA* is expected to be up 29% to approximately £18.5m on an IFRS16 basis and, on a like-for-like IAS17 basis, up 22% to approximately £17.5m.

The Board considers Annual Recurring Revenue (ARR) as its primary growth metric and the driver for long term value. ARR recognised during the year is expected to be £43.1m, representing an increase to 76% of total revenues from 67% the previous year. The ARR book as at 30 April 2020 was up 34% to approximately £48.7 million from £36.4 million, arising from both strong organic growth of approximately 19% on the previous year and acquired ARR from three acquisitions made within the year.

It is particularly pleasing to note that the organic growth was driven by 458 new customer logo wins across verticals such as Healthcare, Life Sciences, Financial Services and US Government, with new customers including the US Federal Reserve, SSE, Emirates and Corbus Pharmaceuticals. Investment appetite from new customers in sectors that have been more intensely impacted by the pandemic, including the Aviation and Manufacturing sectors, has as expected been slower. Reflecting the importance of the Group's software to our customers, there has been no material impact on the Group's existing customer relationships or the ARR book as a result of COVID-19.

Cash generated by operations was ahead of expectations at over 95% of adjusted EBITDA*, resulting in a gross cash balance of £8.2m and gross bank borrowings of £25.0m at the period end. Net bank debt at the year end of £16.8m was lower than anticipated and comfortably within banking covenants. As a result, the Group remains in a robust financial position.

Outlook

The Board reiterates the guidance it provided on 7 April 2020. Ideagen's software is considered business critical by our customers and this, together with a strong ARR book, gives the Board confidence that the £15m run rate revenue from the final quarter of previous financial year will continue as expected. The Group has also implemented a prudent cost reduction programme that has generated approximately £4m in annual savings.

In light of this, the Group believes it has the right financial model to meet market expectations for the current year and continues to intend to pay a dividend in respect of the financial year in line with its progressive dividend policy. The Group expects to declare this dividend at its full year results in line with its normal practice.

Ben Dorks, Chief Executive commented:

"We are pleased to report that despite the impact of COVID-19, the Group has continued to perform well in delivering yet another year of quality earnings growth underpinned by strong cash generation. The Group has now successfully transitioned to primarily a recurring revenue model and has quickly responded to the new and challenging business backdrop we all face. I would like to thank all our employees who have displayed great resilience and fortitude during these difficult times".

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

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About Ideagen plc

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

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

With an excellent portfolio of software products including Q-Pulse, Coruson, Pentana Audit and PleaseReview, Ideagen helps its clients reduce costs, improve operational efficiency, strengthen compliance and oversight and anticipate and manage every detail of risk.

Currently, more than 6,000 organisations use Ideagen's products including seven 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 180 hospitals across the UK and US amongst its client base.

For further information please visit www.ideagen.com.