First Derivatives Forex Volumes Have Held Firm despite Difficult Market Conditions in H1 2014

CEO of the software and financial services provider, First Derivatives says the firm is "positioned to deliver" as it reports

first derivatives logoSoftware and financial services provider, First Derivatives, has just reported interim results for the six months ending August 31, 2014, showing nice gains in the face of headwinds compared to the same period of the previous year.

In the six months ending August 31, 2014, First Derivatives increased its reported revenue by 9% to £37.5mln, from £34.4mln in the corresponding period a year ago. EBITDA was £6.8mln compared to £5.8mln in the prior period, representing a 17% growth. On a constant currency basis, the growth was stronger at 15% for revenue and 26% for EBITDA. In addition, the group generated £3.3mln of cash from operating activities, up 2% (2013: £3.2mln), with net debt falling to £9.1mln (2013: £15.0mln).

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Seamus Keating, Chairman of First Derivatives, commented: “The second half has started strongly across the Group, both in terms of business performance and growth in our sales pipeline. We expect a modest enhancement to adjusted earnings in the current year from the Kx Systems transaction, with greater impact in the year to February 2016, despite increasing investment in Kx to maximise its growth potential. In summary, the Group is well positioned to deliver in the current year and beyond with numerous business development opportunities to accelerate our growth. We view the future with confidence.”

As previously reported, First Derivatives has reached an agreement with the founders of Kx Systems to increase its stake in Kx to 65.2% on a fully diluted basis. The deal is seen by the CEO as transformational for both parties. The group now has a significantly wider range of options to commercialise its software, including the ability to partner with other technology providers to provide a complete solution addressing all of the “Big Data challenges” around volume, velocity and variety.

Brian Conlon, the CEO of the Group, stated about Delta Flow (Foreign Exchange): “Despite difficult market conditions (EBS reports that electronically-traded spot forex volumes fell by 34% between January and August 2014) we are pleased to report that volumes executed through the Flow platform have held firm. Our performance has been assisted by the opening of a Tokyo data centre in early 2014 to service clients in the region. During the first half of the year the Group has signed three new customers to the Flow platform. While new customers take some time to reach their expected run rate as they perform integration and testing, we are encouraged by Flow’s performance and the outlook for growth.”

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