Investors in First Derivatives (FDP) may be rubbing their eyes, but the data analytics group's stellar growth isn't an illusion. Revenue - excluding acquisitions, currency movements and one-off items - leapt by more than a quarter in the reported period, driving underlying cash profit up about a fifth.
First's recruiting efforts, technology upgrades and sales and marketing investments underpinned its gains. The group hired more consultants and won a bunch of managed-services contracts, sending divisional turnover up 21 per cent to £43m. But the greater gains stemmed from its software tools, which management say are used by every one of the 10 biggest global investment banks to analyse and visualise vast volumes of financial data. Software sales surged 60 per cent to £29m as management fulfilled contracts penned last financial year, both in financial services and newer sectors such as marketing technology.
Broker N+1 Singer expects higher costs to balance out First's continued momentum. It forecasts adjusted pre-tax profit of £20.8m for the year to February 2017, giving EPS of 60.2p, rising to £23.5m and 66.2p in FY2018 (from £16.8m and 51.7p in FY2016).
| FIRST DERIVATIVES (FDP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,085p | MARKET VALUE: | £513m | |
| TOUCH: | 2,056-2,089p | 12-MONTH HIGH: | 2,114p | LOW: 1,430p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 54 | |
| NET ASSET VALUE: | 504p | NET DEBT: | 13% | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 53.8 | 4.6 | 15.0 | 5.0 |
| 2016 | 72.4 | 7.0 | 20.5 | 6.0 |
| % change | +34 | +52 | +37 | +20 |
Ex-div: 10 Nov Payment: 5 Dec *Includes intangible assets of £159m, or 645p a share | ||||
