Idox PLC
Trading Update: Forecasts? Yes. Shared with Shareholders? Not Exactly.
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By Elric Langton | 31 March 2025
Back in January, Idox was looking rather chipper, with its shares riding at 64p on the back of a full-year performance that suggested a Company finding its stride in digital public services and geospatial solutions. But as we close out March, the market's enthusiasm has cooled. The shares now hover at 58.44p — not a collapse, but a direction of travel that invites scrutiny.
The Company’s latest trading update, released ahead of its AGM, was upbeat in tone. There were the usual nods to “strong pipelines,” “contract momentum,” and “strategic progress”—all the right noises. But curiously, the Board decided not to share any financial forecasts despite clearly having them in hand.
Which begs the obvious question: Why not? Particularly when the numbers, while not spectacular, speak of steady, respectable progress.
Had Idox chosen to be a little more forthcoming, investors might have seen the following in black and white:
Revenue is forecast to grow by 6.6% in FY25, reaching £93.4 million, up from £87.6 million in FY24. A solid, if unspectacular, uptick — in line with Idox’s mid-to-high single-digit historical growth pattern, rooted in organic development rather than shoot-the-lights-out expansion.
Adjusted EBITDA is projected to rise to £26.9 million, a 3.2% increase from £26.1 million the previous year. The EBITDA margin is expected to ease slightly to 28.8%, down from FY24’s 30%, reflecting some shifts in the business mix and continued integration costs — par for the course in a sector where bolt-ons and platform build-outs are the norm.
Net debt, meanwhile, is expected to shrink to £5 million by year-end FY25, from £9.9 million previously — demonstrating the Company’s ability to generate cash and maintain a tight grip on costs.
Hardly anything to be ashamed of. Indeed, for a software business with recurring revenue comprising 62% of total turnover, this financial outlook signals maturity, stability, and a certain quiet confidence.
Which makes it all the more baffling that none of these numbers made it into the trading update. It’s so frustrating and, frankly, bloody lazy!
This isn’t merely about investor curiosity—it’s about stewardship. A Company cannot expect to deepen trust with its shareholder base (or woo new investors) if it declines to share the figures that form the bedrock of investor decision-making.
In fact, given the conservative yet competent nature of these forecasts, one might argue this was a golden opportunity to reassure the market. Instead, Idox chose a more opaque approach — offering narrative but no numbers, optimism without orientation. Baffling!
That’s a risky play, particularly in a market environment where peers are only too happy to put their forecasts front and centre.
Babcock International, To name just one, upgraded its full-year revenue guidance to £4.9 billion revenues, with the expected overperformance due to double-digit organic growth in Nuclear and strong growth in Marine — hardly a shrinking violet, even in uncertain times. Similarly, Facilities by ADF (a company known more for logistics than for lines of code) provided clear guidance on revenue and EBITDA financial expectations for FY25 in their trading update issued on 26 March 2025. This update noted that prior market expectations for FY25 included revenue of £56.8 million and an adjusted EBITDA of £15.8 million. However, the company indicated that although revenue and profitability in FY25 are expected to be significantly higher than those in FY24, they would fall materially short of these previous market expectations due to subdued activity levels and an increased focus on client budgets.
Playing It Safe
To be fair, Idox may simply be erring on the side of caution — choosing not to trumpet modest growth in case delivery wobbles later in the year. But with this level of predictability baked into the model — recurring revenue, a relatively narrow sector focus, a history of organic expansion — it’s hardly a high-wire act.
And the truth is, even modest guidance can be a useful anchor in a market where sentiment shifts like sand; a clearly articulated financial direction gives investors something solid to hold onto, more so when the global markets are obsessing over trade wars.
It also helps differentiate Idox from a slew of small-cap tech peers who too often oscillate between hype and disappointment. Stability is a selling point — but only if people are told about it.
One hopes this was merely a case of cautious messaging, not corporate reticence. The numbers are there. They’re respectable. They also reflect a Company that is ticking along nicely, with an eye on operational efficiency, modest margin improvement, and deleveraging.
Suppose Idox wants to be taken seriously as a long-term compounder in the GovTech and geospatial space. In that case, it needs to be just as rigorous in its communication as in its execution.
In short: if you’ve got decent numbers, don’t hide them. Especially when your share price is drifting south, and the market is looking for signals of resilience and direction amid the geopolitical noise.
There’s still time for Idox to course-correct. Future announcements — including interim results — will no doubt shed more light. But next time, let’s hope the Board chooses to tell the full story.
Because in this market, modest progress isn’t a weakness — but keeping it quiet might be.
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