Shares in financial software and consulting specialist First Derivatives (FDP) have risen more than 60 per cent since January on the back of soaring software sales. These results for the six months ended 31 August showed a continuation of that trend with software sales climbing 46 per cent year on year to £11m.
Admittedly, reported profits were suppressed as the company invested significantly in hiring more global sales staff; cash profits only nudged up to £5.8m, but that's in part because First Derivatives is chasing after larger deals which involve longer sales cycles and require significant up-front services spend. These types of contracts should ultimately deliver strong growth in recurring revenues, and the sales team have already signed up a number of new customers as a result. Cash profits would have been 18 per cent higher in the period after adjusting for the increase in sales salary costs.
First Derivatives' consultancy business also continues to perform strongly and boosted revenues by 17 per cent to £23.4m in the first half as customers increasingly focus on capital management and regulatory requirements.
Broker Panmure Gordon tweaked its estimates up slightly post results and now forecasts full-year adjusted pre-tax profits of £10.1m and EPS of 39.3p, rising to £11.1m and 42.5p in fiscal 2015 (fiscal 2013: £8.8m/39.1p).
FIRST DERIVATIVES (FDP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 850p | MARKET VALUE: | £160m | |
| TOUCH: | 835-865p | 12-MONTH HIGH: | 850p | LOW: 500p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 244p** | NET DEBT: | 33% | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012* | 27.6 | 3.47 | 16.7 | 3.10 |
| 2013 | 34.4 | 2.96 | 13.3 | 3.20 |
| % change | +25 | -15 | -20 | +3 |
Ex-div:13 Nov Payment:05 Dec *Restated **Includes intangible assets of £37.3m, or 199p a share | ||||
