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AIMprospector

Event Review Mattioli Woods It cannot be an entirely random circumstance that since May 2012, the 129% jump in revenues and more than threefold surge in the share price of Mattioli Woods coincided with the implementation of the Financial Services Authority’s ‘RDR’ changes. Mattioli Woods, specialising in employee benefits and wealth management, is positioned to exploit new rules liberalising access to personal pension pots. Mattioli Woods shares are on the expensive side but management have made good use of the shares’ premium market valuation to raise cash to fund acquisitions, actions that put the company in a strong position for further growth. As at H1 2016, the company retains a healthy cash pile of £22.6m, earmarked for further acquisitions as smaller IFA/SIPP operators are compelled to join up with larger firms by higher regulatory capital requirements and compliance costs. Interims were strong with revenues and adjusted Mattioli Woods (LON:MTW) EBITDA growth rates in the high teens (20% and 18%). Market cap £160m The strength of the Mattioli Woods’ business model, centred around quality financial advice, is evidenced in Price (p) 633p:640p the high level of recurring revenue at over 80%. P/E (forecast) 22.2 Yield (forecast)

1.8%

idox Over 90% of UK local governments use Idox software for core functions of planning, building control, environmental health and licensing. With only 18% penetration of internal customer needs, further growth is expected. The Idox application for election management is used in UK local elections and has been used in the Scottish parliamentary elections and the recent Scottish referendum. Idox also develops document control software for the global engineering sector. At its peak, the oil & gas sector accounted for 30% of Idox revenues but after the oil price decline in recent years, this segment contribution is now down to around 20% of group total. The Idox share price has clawed back most of the losses in 2013/14 that were suffered due to the oil price decline and uncertainty resulting from the lengthy hospitalisation of the CEO (who is now fully recovered and has completed a significant management restructuring). Market estimates Idox (LON:IDOX) for a rise in both revenues and earnings of over 20% for Market cap £202m the current financial year come from the acquisitions of Cloud Chamber and Reading Room. Single digit organic Price (p) 55.75p:56.5p annual growth in revenue and profit is expected as Idox P/E (forecast) 15.6 increases its recurring UK local government business. Yield (forecast) 1.8%

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May 2016 AIM Prospector  
May 2016 AIM Prospector  

Featuring *NINE* AIM companies: Cerillion, Conviviality, Epwin, K3 Business Technology Group, idox, Mattioli Woods, Mulberry, Nichols and Yo...