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Ffastfill gets regulation boost

RESULTS: Tighter financial regulation, and an urgent need to quantify risk, is proving a benefit to software provider, Ffastfill
November 19, 2012

A changing environment in investment banking is driving tighter regulation and greater risk control for financial firms' trading activities. That's proving good news for Ffastfill (FFA) - which provides specialist software services for front, middle and back office trading - and the group grew its adjusted half-year operating profit almost 10-fold to £1.4m.

IC TIP: Hold at 14p

Its software-as-a-service (saas) product continued to drive Ffastfill's sale growth, with three new customer wins in the half boosting the overall order book from £13.6m to £22.1m. From that, saas sales generated £15.5m, or 70 per cent of the total - a 36 per cent hike compared with this time last year. Executive chairman Keith Todd said the advantage of the saas system is that banks and trading firms don't need to employ new IT staff, or invest in capital equipment, to get the software up and running. He added that regulation is also changing the way traders operate and, increasingly, trades have to run a pre-deal risk assessment of a client's capital position before they are allowed to proceed, something which Ffastfill's software does in real time. Neither, he maintains, is Ffastfill dependent on trading volumes to generate sales.

Housebroker Cannacord Genuity forecasts adjusted full-year pre-tax profit of £3.7m, giving EPS of 0.7p (from £1.9m and EPS 0.4p in 2012).

FFASTFILL (FFA)

ORD PRICE:14pMARKET VALUE:£68.2m
TOUCH:13.5-14.5p12-MONTH HIGH:14.9pLOW: 9.88p
DIVIDEND YIELD:nilPE RATIO:74
NET ASSET VALUE:5p*NET CASH:£2m

Half-year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20117.25-0.11-0.03nil
201210.90.160.02nil
% change+50---

Ex-div:-

Payment:-

*Includes intangible assets of £19.5m, or 4p a share