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Fidessa cautions on growth

RESULTS: Financial trading software specialist, Fidessa, has cautioned on growth prospects - although the group has paid another chunky special dividend
February 13, 2012

Continued uncertainty in the financial sector meant just single-digit revenue growth last year at trading software supplier, Fidessa. Moreover, management expects weaker growth this year - although shareholders will be pleased with the 45p a share special dividend.

IC TIP: Sell at 1653p

Fidessa was hit by both the demise of US broker MF Global and the sale of Royal Bank of Scotland's equities business. Moreover, chief executive Chris Aspinwall warns that conditions in the financial sector haven't eased so far in 2012. Focus is therefore shifting to developing the group's small but promising buy-side solutions business - total sales here grew £2.3m to £23.8m in the year, but should receive a decent boost from a global deal signed with Citi. This should also help sales growth outside of the UK, which rose just 3 per cent to £134.7m and still account for 48 per cent of group sales. Sales from Asia rose just 7.5 per cent to £43m - although Mr Aspinwall says this would have been the fastest-growing market if not for the Japanese earthquake. Meanwhile, US sales rose 11per cent to £89.7m.

Numis Securities expects 2012 pre-tax profit of £41.2m, giving EPS of 79.1p (2011: £39.5m/75.2p).

FIDESSA (FDSA)

ORD PRICE:1,653pMARKET VALUE:£611m
TOUCH:1,653-1,658p12-MONTH HIGH:2,125pLOW: 1,407p
DIVIDEND YIELD:2.7%PE RATIO:20
NET ASSET VALUE:377p*NET CASH:£70.9m

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200713517.134.418.0
200818936.080.124.5
200923931.059.830.0†
201026239.777.833.0†
201127842.582.236.5†
% change+6+7+6+11

Ex-div: 25 Apr

Payment: 28 May

*Includes intangible assets of £82m, or 222p per share

†Excludes special dividends: 40p in 2009 and 45p in 2010 and 2011