ILX sees overseas sales overtaking UK

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ILX, the Aim-quoted provider of e-learning software and business training, expects international sales to overtake UK revenue within three years, in spite of revealing wider pre-tax losses.

Ken Scott, chief executive, said overseas sales accounted for only 20 per cent of the total at present, but were growing in Australia and the Middle East.

The company set up an international sales division in January in order to capitalise on its market-leading position in the use of Prince2 project management software.

“We are in the early stages, we have just started on our international expansion plans,” Mr Scott said.

Total revenue for the year to March 31 fell from £15.6m to £14.7m as the finance division suffered a fall in sales from £5.2m to £3.3m.

Investment banking graduate training had been hit badly, Mr Scott said, although the division was still profitable at the operating level.

However the core best practice division, which includes Prince2, increased revenue 9 per cent to £11.4m. Its operating profits rose 45 per cent to just more than £2m on the back of tighter cost controls and higher margins because of a shift to e-learning.

Mr Scott said ILX was assuming the worst from the spending cuts announced in the emergency Budget. Nevertheless, it could be argued that training would become more important and e-learning was cheaper to deliver than classroom training.

A quarter of UK sales are to hundreds of different public bodies with an average spend of £10,000 a year.

After exceptional charges, including a £2.3m impairment charge on an acquisition made four years ago, the pre-tax loss for the year was £1.5m, up from a deficit of £1m the previous year when there was an impairment charge of £2.4m on a different purchase.

Excluding exceptionals, underlying profits were £1.1m (£1.7m). FinnCap, the company’s broker, is forecasting underlying profits to rise to £1.4m this financial year, putting the shares on an underlying prospective multiple of just more than 5.

Basic losses per share increased from 7.35p to 8.45p, while adjusted earnings per share fell from 6.04p to 3.75p. The board, which did not pay an interim dividend, is proposing to maintain the final at 1.5p.

The company raised £930,000 through a placing at 25p a share in January in order to help reduce debt by £1.5m to £3.2m at the year end.

The shares on Wednesday closed up 1½p at 23p.

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