First Derivatives Plc Annual Results, Turnover up 24% to £69.9M, Pre-Tax Profit of £7.9M

Turnover of £69.9 million was reported up 24% from £56.5 million in the prior year period, with a pre-tax profit

first derivatives logoDually listed public brokerage technology developer First Derivatives Plc, which provides software and consulting services to the capital markets industry, including the Foreign Exchange space, today announced its results for the year ended February 28th, 2014, according to an official corporate press release.

The company reported a turnover of £69.9 million up 24% from £56.5 million reported for the prior year period, with a pre-tax profit of £7.9m also up by 29% from £6.2 million year-over-year. Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA) came in 19% higher YoY at £12.2 million, up by £2 million from £10.2 million reported for the year ending February 28th, 2013.

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Basic earnings per share (EPS) of 34.4 pence was 14% above last year’s EPS of 30.2 pence, and helped enable a 14% increase in the final dividend of 9 pence per share to stockholders, giving a full year dividend of 12.2 pence – up 6%. The firm’s net debt decreased to £11.2m from £22.2m for its prior year period.

Business highlights included in the update described as follows:

  • 29% increase in total software revenue and 11% increase in recurring licence revenue
  •  22% increase in total consulting revenues with increase scale leading to larger opportunities
  • Significant expansion in sales capacity with regional hub established in Singapore and satellite offices in Hong Kong and Japan
  • Further surveillance contract win with Yieldbroker following successful delivery of ASIC project
  • Collaboration with Pivotal and NYSET strongly position the Group to capitalize on further Big Data opportunities
  • Established Asian Foreign Exchange ecosystem backed by one of Japan’s largest banks

Commenting in the company press release, Seamus Keating, Chairman of First Derivatives explained, “The 2013/14 year has seen strong growth across the Group’s activities with total revenues up over 23.8%. The current fiscal year is set to be a pivotal year for the Group as we gain traction in the target markets for our software. We have a strong business in consulting with an expansive capability and have confidence in our ability to grow this as we have done in previous years. The pipeline across the business is strong and as the year progresses we expect to demonstrate progress in the areas we are addressing. We have invested to ensure the Group is in a strong position to capture market share in software and consulting and consequently expect to report further progress in the year to 28 February, 2015.”

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On April 2, 2013 the company advised that it had made provision for a potential bad debt relating to a legacy contract from the acquisition of Cognotec, which was acquired in February 2010. As this is a non-recurring item, the increase in provision has been removed from normalized profit, according to the statement. In addition, the 2014 exceptional item was tied to a cost to issue options that the company had incurred.

The company employs over 900 people worldwide and counts many of the world’s top investment banks, brokers and hedge funds as its customers, and maintains operations in London, New York, Stockholm, Shanghai, Singapore, Toronto, Sydney, Dublin, Newry and Hong Kong.

In a parallel press release today, First Derivatives Plc announced the implementation of its Delta Surveillance solution by Yieldbroker Pty Limited in Sydney, Australia. The Delta Surveillance product was described as having been chosen by Yieldbroker for its electronic marketplace which offers institutional investors and banking participants trading in Australian and New Zealand debt securities and derivatives.

That announcement described how the implementation of Delta Surveillance enables Yieldbroker to continue to maintain a fair, orderly and transparent trading environment for investors by providing the ability to detect in real-time any anomalous or potentially prohibited trading activity on the platform. It also enables it to meet its regulatory obligations for the surveillance, reporting and monitoring of derivatives and OTC trading, according to the announcement.

The news follows the company’s launch of new tools to manage the Calypso trading platform, as covered by Forex Magnates earlier in May 2014, and after we reported when CQG and DirectFX added First Derivatives’ Delta Flow trading platform in April.

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