The financial crisis, and the subsequent raft of regulations and austerity measures, led to widespread closures, restructuring and consolidation in the financial services industry. Fidessa (FDSA) has lost several clients in the fallout, but has also seen rising demand for its trading, workflow and compliance solutions. A 3 per cent slide in adjusted, constant-currency operating profit, coupled with a warning from management of mounting headwinds, sent the financial software group's shares down 11 per cent on release of its half-year figures.
Fidessa helped fund managers and insurers adapt to the new regulatory paradigm by updating its investment management system and launching auditing, analytics and portfolio compliance software. It also won over brokerage clients with new tools to monitor and optimise trades in real time. And management plans to partner with application developers to strengthen the group's product suite.
Revenues from Fidessa's derivatives platform leapt 36 per cent as it signed a global deal with banking giant RBS, and the group could soon add support for fixed income assets. Regionally, sales growth in Asia was strongest - up 18 per cent - as major brokerages raced to offer international services. True, turnover dipped 3 per cent in Europe; but management expects a new wave of regulations to prompt clients to invest now rather than foot a huge bill in 2017.
Broker Numis has slashed its forecasts and now expects EPS of 77.3p this year, from 77.4p in 2014.
| FIDESSA (FDSA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,158p | MARKET VALUE: | £ 824m | |
| TOUCH: | 2,150-2,160p | 12-MONTH HIGH: | 2,484p | LOW: 1,956p |
| DIVIDEND YIELD: | 1.8%† | PE RATIO: | 28 | |
| NET ASSET VALUE: | 368p* | NET CASH: | £61.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 137 | 19.7 | 38.6 | 13.1 |
| 2015 | 146 | 19.4 | 38.0 | 13.1 |
| % change | +6 | -1 | -2 | - |
Ex-div:20 Aug Payment:15 Sep *Includes intangible assets of £90.3m, or 236p a share †Excludes special dividend of 45p a share | ||||
