This week sees two AGMs for software suppliers to the Public Sector – IDOX (Thursday) and Gladstone (Friday) – when we will hopefully be updated on their prospects and fortunes to date.
Both have seen their share prices drift downwards over the past few months – but for different reasons.
Gladstone saw off its unwanted bidder, Constellation, in December and has since seen its share prices drift from just under the bidder’s offer of 25p towards the 18p level it was at before the bid was announced. Gladstone is also trying to repel a request from Constellation to have a post on Gladstone’s Board. Gladstone desperately needs good news – recent attempts to generate good news from announcements of the new software updates and the first very small user of its new Orbit package have been judged too weak by investors – let’s hope that the AGM will include some positive, hopefully quantified, news about new business wins.
IDOX has similarly suffered from a lack of good news, with only a weak announcement of a “me too” strategic partnership with Kirona since the announcement of its results over two months ago. Shareholders seem to be fretting about IDOX’s ability to maintain profit levels during the current recession, and rumours abound of further rationalisation of IDOX’s business units. Hopefully the AGM statement will include updates on the continuing absorption of IDOX’s Plantech and CAPS acquisitions, again including some quantification of the cost savings achieved.
I remain a (small) shareholder in both businesses – I believe that, as dominant leaders in their chosen markets, properly managed, they will have the strength to not only survive the current downturn in spending in the markets, but thrive in years to come. As I’ve noted before, I believe that both are likely to lose their independence at some time - but unless they trip up over the coming few months, I think it will be at least another year before any reasonable offers are forthcoming......