Trading software firm Fidessa has continued its record for market-beating performance thanks to pumped up operating margins of 15.2 per cent in the six months to 30 June.
Fidessa produced solid organic revenue growth helped by the fact that more than 80 per cent of its revenues are recurring, offsetting the ongoing impact of insolvencies and mergers among its primarily financial services customers which has the potential to hurt growth.
Buy-side trading and Connectivity revenues rose 10 per cent and 11 per cent to £65m and £20m respectively, and Market Data jumped 20 per cent to £12m, thanks to good growth in Asia and Latin America. This offset a flat performance by sell-side trading with revenues of £7m. Fidessa also pulled of its first Middle East contract, with NCB Capital of Saudi Arabia.
Meanwhile the company continues to generate healthy cash flow with £25.4m generated from operations. Net cash fell from a year-end £45.5m to £39.8m largely because of a £15m, or 40p per share, special payout to investors.
But uncertainty still dogs financial markets so Fidessa continues to advise caution over its immediate prospects. Still, Numis fancies a sharp acceleration of growth once this even out, upping its EPS estimates by 6 per cent and 4 per cent for this year and next, to 67.7p and 74.7p respectively.
FIDESSA (FDSA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,487p | MARKET VALUE: | £ 535.4m | |
| TOUCH: | 1482-1490p | 12-MONTH HIGH: | 1,593p | LOW: 1,020p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 337p* | NET CASH: | £39.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 116 | 12.7 | 23.5 | 10.0 |
| 2010 | 129 | 19.5 | 38.6 | 11.0 |
| % change | +11 | +54 | +64 | +10 |
Ex-div:25 Aug Payment:27 Sep *Includes intangible assets of £77.4m, or 215p per share **Excludes 40p per share special dividend | ||||
