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FFastfill turns profitable

Created:
19 November 2009
Written by:
Malar Velaigam

Continued growth in software as a service (SaaS) revenues have helped exchange-traded derivatives software provider Ffastfill turn profitable in the first half of its financial year. Chief executive Hamish Purdey says that key decision-making in the financial services sector is returning, and this coupled with regulatory drivers leaves Ffastfill with an "improved outlook".

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Ffastfill's focus on delivering its software via its SaaS model - which typically generates recurring revenues - has helped maintain growth. SaaS revenues swelled 27 per cent to £5.1m in the period, and now account for 73 per cent of group turnover, up from 59 per cent a year ago. This has more than compensated for the anticipated decline in lower margin third party licence sales.

The first stage of Ffastfill 's Asian expansion has now been completed. Mr Purdey says the Asian presence has helped win new clients and highlights a recent global contract win with investment bank Nomura in the period. The continued contract win momentum has helped drive up the 12 -month order book to £13.6m, with SaaS orders, within this, up 17 per cent to £10.5m.

Analysts at Canaccord Adams are expecting full-year pre-tax profits of £1.4m and EPS of 0.36p (loss of 0.4p in 2009), rising to £2.5m and 0.62p, respectively, in 2011.

FFASTFILL (FFA)
ORD PRICE: 7.75p MARKET VALUE: £30.7m
TOUCH: 7.5-8p 12-MONTH HIGH: 8p LOW:4.5p
DIVIDEND YIELD: nil PE RATIO: 52
NET ASSET VALUE:  3p* NET CASH: £2.7m

Half-year
to 30 Sep		 Turnover (£bn) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2008 6.83 -0.52 -0.14 nil
2009 7.04 0.46 0.12 nil
% change +3 - - -

*Includes intangible assets of £11.6m, or 2.9p a share

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IC VIEW:

GoodValue

Analysts estimate that around 93 per cent of total sales are now recurring and, supported by the growing pipeline, Ffastfill looks well placed to grow profits strongly. Trading on a forward PE ratio of 12 for the 12 months to March 2011, the shares continue to rate good value.

Last IC view: Good value, 5.5p, 28 May 2009

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