2nd May 2025 Author: Ieuan Turner
We recently caught up with Stephen Ferry, CEO of LDC-backed public sector software provider IEG Group, following what has been a transformational year for the business. A key highlight was the July 2024 acquisition of owner-managed peer Agile Applications. The deal marked a significant step forward, expanding IEG’s presence into the built environment and bereavement management markets, complementing its existing focus on local government and healthcare. Ferry guided numbers for FY24 (to December), including a stable 30% adjusted EBITDA margin (£2.2m) on revenues of £7.7m. FY25 will be another year of growth, with IEG expecting headcount to reach c. 80, implying revenues around the £10m mark. Longer term, IEG remains focused on developing a strong data strategy, positioning itself to benefit from the accelerated consolidation and digitisation of local government across England. A strong data-led approach is also set to open further opportunities in health, where recent cost-saving mandates for Integrated Care Boards are likely to stimulate technology spend.
Implementing Electronic Government
IEG Group provides a range of software solutions to local government and healthcare sectors. Within local government, its core offering is a digital experience platform designed to enhance citizen engagement, including portals, CRM, CMS, workflow and case management solutions like Built Environment (Planning & Building Control), Blue Badge, and Revenues & Benefits automation. Additional solutions for local government include a unique AI planning validation tool for planning departments and a bereavement management system. Within healthcare, IEG Group provides an end-to-end solution to support NHS continuing healthcare, including assessments, care package management, and payments. Founded in 2006, IEG Group is led by CEO Stephen Ferry and employs c. 70 people. It completed a LDC-backed MBO in 2021 (minority stake), with founder Paul Tomlinson remaining a significant shareholder.
Transformational acquisition…
IEG went through a transitional period in FY23 (to December), marked by Ferry’s CEO appointment midway through the year. Under new leadership, IEG refined its go-to-market strategy, aiming to grow through organic and inorganic means. A key step forward came for the latter with the acquisition of Agile Applications in mid-2024, which provided a significant (c. 75%) uplift to IEG’s calendar 2023 revenue base of £4.3m along with a Spain-based nearshore development resource. Agile added two distinct business units.
First, Agile provides solutions aimed at the built environment, including tools for planning, building control and land charges. A particularly notable feature within this offering is its AI planning validator tool. It automatically checks for compliance against both local and national regulations, significantly reducing processing times for planning applications.
Second, Agile provides solutions for bereavement management, catering for small parish councils to larger borough and district councils. Agile acquired the product in 2021 through Clear Skies, and it has a presence in nearly half of all councils in the UK.
…leads to jump in scale
IEG files abbreviated accounts, but management guided numbers reveal FY24 (to December) revenues up c. 80% to £7.7m. Organic growth was closer to c. 20% (on our estimates) when removing Agile’s part-year contribution. Growth drivers include IEG winning four new logos for its continuing healthcare platform after its mid-2024 go live, and investments made in FY23 to business operations/systems and expanding its workforce (primarily sales and development). Meanwhile, Agile saw good progress across the built environment, with wins in Warwick, Peterborough, and in Ireland. Adjusted EBITDA margins remained stable at c. 30% (£2.2m).
Headcount to reach 80
FY25 has started well with many of the same growth drivers carrying over from the prior period, with performance expected to be weighted towards the second half. IEG expects headcount to reach c. 80 within the next 12 months, implying group revenues around £10m. Adjusted EBITDA margins are expected to be maintained notwithstanding further headcount investment in sales, marketing and development in FY25 and FY26,
Strategic levers
IEG is applying distinct strategic initiatives tailored to each of its business segments:
- Continuing Health Care (CHC) – following successful pilot projects with Herefordshire and Warwick Universities, IEG has introduced an AI transcribe solution to the CHC platform. It is designed to improve productivity at the Integrated Care Board level, specifically during patient meetings that determine necessary care provisions.
- Digital Experience – responding to the government’s trend towards merging local authorities, which results in larger, broader tenders, IEG has formed a partnership with a global telephony provider. Additionally, opportunities exist to expand its AI transcribe offering in this end market (e.g. council meetings).
- Built Environment – efforts here centre on accelerating the go-to-market of the AI planning validator tool. As a result, the number of customers is expected to double to c. 20 during FY25.
- Bereavement Management – the launch of a cloud-based version of the platform is planned for mid-2025. Beyond this transition, future strategies may involve expanding internationally to markets with similar characteristics to the UK, including North America and Australasia.
Further down the road
IEG is working to integrate AI into its broader product set as part of a data strategy to drive long-term growth. Potential applications include low or no code platforms that automate workflows, analytical tools supporting preventative healthcare, and AI assistants designed to guide residents through form filling. Such initiatives are a direct response to the current restructuring within English local government, where county and district councils are merging into larger unitary authorities, effectively replacing the current two-tier system. Although these structural changes are unlikely to immediately impact market dynamics, they will eventually drive greater demand for digital transformation and interoperable systems. To accelerate the inclusion of AI, IEG may pursue an additional acquisition, preferably targeting a founder-led company capable of integration into the wider group.
Megabuyte view
IEG delivered another year of strong progress throughout FY24, building on the foundations laid during FY23 to support both organic and inorganic growth. Its Continuing Healthcare solution has emerged as a key organic growth driver, well placed to sustain momentum as Integrated Care Boards face pressure to reduce costs by 50% this year, creating a powerful incentive to invest in technology.
Trading conditions for core local authority back-office offerings remains more challenging, reflective of established competitors such as Civica and NEC Software Solutions, alongside international players like Microsoft Dynamics and Salesforce also serving the market. Looking ahead, local government procurement is expected to become increasingly centralised as restructurings occur, with a shift towards larger, broader contracts. In response, IEG’s decision to pursue strategic partnerships with other organisations represents a pragmatic approach, given the size of the group.
Agile Applications marked the start of the group’s inorganic growth strategy and was a significant deal for the group almost doubling revenues overnight while introducing two new business lines. Agile’s AI planning validator is particularly noteworthy, given it is a unique product that complements Apse Capital-backed TerraQuest’s national planning portal and holds relevance for local councils across the UK. By continuing to prioritise data strategy and workflow automation, including solutions akin to the AI planning validator, IEG positions itself with a clear competitive advantage in a market often characterised by larger, slower-moving incumbents.
