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LONDON (Alliance News) - First Derivatives PLC said Tuesday it expects to perform "moderately" ahead of market forecasts in its current year, as revenue growth and an exceptional gain resulted in a more than doubling of pretax profit in its recently ended financial year.
According to broker forecasts provided by Morningstar, Arden Partners expects First Derivatives to post a pretax profit of GBP15.8 million for the 2016 financial year, whilst Panmure Gordon also expects a pretax profit of GBP15.8 million and Charles Stanley Securities forecasts GBP14.7 million.
The financial software and services company reported a pretax profit of GBP17.5 million for the year to end-February, more than doubled from GBP7.9 million a year before, as revenue rose to GBP83.2 million from GBP69.9 million and it posted a GBP9.6 million gain related to the revaluation of its existing interest in Kx Systems Inc.
Adjusted for amortisation, share-based payments, acquisition costs, finance translation income or charges and exceptional gains, the company posted a pretax profit of GBP10.8 million, up from GBP9.2 million a year before.
Software revenue rose 29% during the year as the company continued to win customers in capital markets. Consulting revenue rose 15%, boosted by securing master service agreements with new clients.
During the year the company increased its stake in Kx Systems Inc to 65.2%, which the company said opens up further opportunities in capital markets, and provides it with the ability to penetrate other sectors with its software.
Towards the end of the year the company acquired Massachusetts-based analytics software company Prelytix LLC, and following the year end acquired Ontario based software development consultancy Affinity Systems Ltd and Dublin-based software business ActivateClients Ltd.
It proposed a full-year dividend of 13.5 pence, up from 12.2 pence a year before.
First Derivatives said its current financial year had started positively, with good growth in its consultancy business and a number of contract wins in software.
"The investment in the group's sales capability in recent years is evident in the healthy pipeline of opportunities, while the high levels of visibility in both consultancy and software provides confidence that we will report another year of strong growth. This will be supplemented by a positive impact from the group's recent acquisitions. Overall, the group expects performance to be moderately ahead of current market forecasts," the company said in a statement.
Shares in First Derivatives are trading up 3.7% at 1,273.38 pence Tuesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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