Financial software and consulting specialist First Derivatives (FDP) has racked up more strong revenue growth at its two business units. Software sales may have risen by a modest 7.2 per cent overall, to £7.5m, but the more important metric to look at - recurring sales for its cloud-based Delta platform - jumped 40.8 per cent.
In its consultancy division, revenue climbed 30.7 per cent to £20m. Expanding the client base has helped, but so too has a tighter regulatory squeeze on the financial services sector - meaning more business for First Derivatives. The group has also established a legal services consulting unit, which provides banks with guidance on non-core asset disposal, regulatory compliance and securitisation.
Chief executive Brian Conlon now reckons that First Derivatives is ready to step up a gear. "We're now pitching for larger contracts at larger firms," he says. The acquisition of Cowrie Financial in September has also beefed up the group's presence in Murex technology - a third-party platform to support trading and risk management - which Mr Conlon believes will help win bigger contracts.
Broker Charles Stanley expects full-year adjusted pre-tax profits of £8.5m, giving EPS of 34.69p (from £7.4m and 32.99p in 2012).
FIRST DERIVATIVES (FDP) | ||||
---|---|---|---|---|
ORD PRICE: | 545p | MARKET VALUE: | £93.7m | |
TOUCH: | 530-560p | 12-MONTH HIGH: | 555p | LOW: 471p |
DIVIDEND YIELD: | 2.1% | PE RATIO: | 15 | |
NET ASSET VALUE: | 195p* | NET DEBT: | 59% |
Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2011 | 22.4 | 3.40 | 16.3 | 3.00 |
2012 | 27.6 | 3.47 | 16.7 | 3.10 |
% change | +23 | +2 | +2 | +3 |
Ex-div: 14 Nov Payment: 6 Dec Includes intangible assets of £30.6m, or 178p a share |