Software group Ideagen posts 58% surge in profits

Annual profits at Ideagen, the software group with a sizeable Scottish presence, have soared by more than half.

Ideagen counts Virgin Trains among its clients. Picture: David Parry/PA Wire

The Aim-quoted firm, which last year completed the £18 million acquisition of East Kilbride-based governance, risk and compliance (GRC) software specialist Gael, said adjusted pre-tax profits jumped to £5.7m during the 12 months to 30 April, up from £3.6m the previous year.

Ideagen said it enjoyed “strong” organic revenue growth of 10 per cent, with the contribution from Gael helping overall sales soar 52 per cent to £21.9m. The group counts the likes of BAE Systems, Emirates, the European Central Bank, Shell and Virgin Trains among its clients.

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Following the purchase of Gael, which supplies the healthcare, manufacturing and aviation sectors, about half of Ideagen’s 276-strong workforce is based in East Kilbride.

Chief executive David Hornsby said: “Ideagen has enjoyed another year of strong growth. Having expanded the business considerably with seven acquisitions completed in the previous four years, adding significant product capabilities and expertise to the group, the year’s focus was on driving forward our enlarged operations and executing the organic growth strategy.

“The market for GRC management solutions remains fragmented and the drivers are long term and highly strategic. Trading since the year end has remained robust.”

He added: “Whilst we remain alert to prevailing economic and political conditions we have a strong presence in a variety of different markets across the globe, which, together with the high levels of recurring revenues and repeat business derived from our 2,200 customer base, provides me with confidence in the future prospects for the group.”

Earlier this year, Ideagen worked with truck maker Terex to help the Motherwell-based firm become one of the first companies in the world to achieve a new international quality management system standard.

Following today’s results, FinnCap analyst Andrew Darley said the broker had lifted its target price on the group’s shares to 65p, up from 61p previously.

“The customer base need for GRC continues to increase, particularly but not exclusively in industries where the consequences of failure are high,” he said.

“With the development of the Ideagen product set and its progress towards a modular best-of-breed solution creating a unified view of risks across a corporation, Ideagen is well placed to continue to benefit as non-compliance with common standards becomes indefensible.”