38.8p

Gain to date: +28.0%

The data and workflow software supplier has rallied since we last updated on the stock at 31.5p late 2013 (see Plays Updates, Shares 7 Nov ‘13). But we’re getting concerned about widespread capital expenditure (capex) cuts across the oil and gas industry and taking profits now looks sensible to lock in a 28% gain. As we spelled out in last week’s AVEVA (AVV) story (see Agenda, Shares, 17 Apr), several of the world’s biggest energy groups are cutting capex in oil and gas projects this year, by as much as 8% at Royal Dutch Shell (RDSB) and Chevron (CVX:NYSE), and there could be a knock-on effect for IDOX (IDOX:AIM). About a third of the company’s revenue comes from its Engineering Information Management (EIM) division, and the fear is that licence wins could come under pressure again. Analysts at finnCap see revenues of £62 million this year to end October, implying a 15% rise in pre-tax profit to £14.4 million. We don’t necessarily believe these estimates are at risk but the threat of a miss does loom large.

Sentiment could turn against the stock in the short-term and taking profits looks sensible. (SFr)