The financial crisis resulted in widespread closures, restructuring and consolidation among financial firms. That had a material impact on Fidessa (FDSA), but the financial trading software group is accelerating once again - constant-currency sales climbed 3 per cent, up from 1 per cent in 2013.
Its gains stemmed from double-digit sales growth in Asia and bumper revenues from its sell-side derivatives software. But sales of its buy-side and sell-side equity-trading software dipped, while currency headwinds drove operating profit down a tenth. Investors may also note Fidessa's reassessment of its addressable market: fewer potential customers and tighter budgets mean it has shrunk 11 per cent since 2009 to $3.3bn (£2.1bn) in annual recurring revenue.
Structural shifts in the financial industry could benefit Fidessa, however. Mounting regulatory and cost pressures have fuelled corporate demand for efficiency, smooth workflow and a single platform; accordingly, Fidessa is offering more compliance, risk-management and specialised trading tools.
Broker Panmure Gordon doubts Fidessa can return to the heady growth rates seen prior to the financial crisis. It forecasts pre-tax profit of £44.7m, giving EPS of 88.1p, up from £43.8m and 86.2p.
| FIDESSA (FDSA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,400p | MARKET VALUE: | £917m | |
| TOUCH: | 2,400-2,405p | 12-MONTH HIGH: | 2,672p | LOW: 1,994p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 397p* | NET CASH: | £76.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 262 | 39.7 | 77.8 | 33.0† |
| 2011 | 278 | 42.5 | 82.2 | 36.5† |
| 2012 | 279 | 42.0 | 82.5 | 37.0† |
| 2013 | 279 | 43.1 | 85.5 | 37.0† |
| 2014 | 275 | 39.1 | 77.1 | 38.1† |
| % change | -1 | -9 | -10 | +3 |
Ex-div: 14 May Payment: 12 Jun *Includes intangible assets of £89.6m, or 234p a share †Excludes special dividend of 45p | ||||
