Fidessa resilient as headwinds continue

Trading systems developer Fidessa delivered annual revenue growth of 6%, despite nervous financial markets, but believes that conditions will remain difficult for some time to come."Conditions in the financial markets during 2011 were generally more difficult than many of our customers were anticipating, with a widely expected uptick in the second half failing to materialise as the euro zone crisis deepened," Fidessa explained."Trading volumes across most of the main equity markets in 2011 were at their lowest levels for many years and there were also high levels of volatility," it added.Despite this, revenue for the year ended 31 December 2011 rose to £278.3m from £262.3m while pre-tax profit for the period rose 7% to £42.5m after growth across all regions and market sectors.Consensus figures from Factset predicted revenue of £279.65m and pre-tax profit of £41.02m.The group, which generates over 50% of revenue from outside Europe with Asia and the Americas delivering strong growth, said adjusted operating profit rose to £42.9m from £39.8m before.Fidessa said the results were achieved despite, "challenges including low volumes of trading across the equity markets, uncertainty with regard to regulation, high levels of volatility, the earthquake in Japan as well as continued structural pressure on many market participants."In light of persistently challenging conditions, the group believes that whilst it can continue to deliver growth in 2012, this growth is likely to be at levels which are lower than we have seen during 2011."Looking further ahead, we believe that we will see stability returning to the markets and that reduced headwinds will enable us to return to more historic growth levels as our new initiatives gain momentum," it said in a company statement.An annual dividend of 36.5p has been offered, up 11% and a special dividend per share of 45p has been recommended.Merchant Securities noted that the figures represented a slight miss on revenues but were in line as regards stated earnings before interest and tax (EBIT)of £42.9m and were slightly ahead of the broker's expectations on earnings per share at 81p versus Merchant's estimate of 80.5p."The outlook statement is all-important given the revenue visibility and this says to expect a slower year in terms of growth than 2011 (7% revenue growth, 9% EBIT growth) due to market conditions persisting and further product investment," the broker's analyst, Roger Phillips notes."In the short term the reaction will be a disappointment and the shares will come under pressure. Longer term we see Fidessa as one of the outstanding stocks in the sector," the broker said.CJ