Given forewarning, analysts at Peel Hunt today suggested there were “no major surprises” in First Derivatives’ (FDP) results for the year to February. Apparently the market did not get the memo, as preliminary numbers prompted a 14 per cent dive in the shares on a broadly solid day for markets.
This may have been profit-taking following a strong recovery in the stock since March’s lows. An alternative explanation – that shareholders baulked at the abandonment of the final dividend – also seems off, given the meagre yield. And on the face of it, shareholders have little to complain about a deal to cross-sell First Derivatives’ technology to Tata Consultancy’s global client base.
Neither was an update on post-period trading activity since the end of February particularly concerning. While the capital markets analytics software group said “it remains too early to determine the probable impact” on this year’s performance, the pandemic is yet to have dented the group’s financials aside from the sales cycle, which had already been lengthening.
FactSet-compiled consensus earnings forecasts are 77.9p per share for the 12 months to February 2021 and 86.7p in FY2022.
| FIRST DERIVATIVES (FDP) | ||||
| ORD PRICE: | 2,610p | MARKET VALUE: | £ 714m | |
| TOUCH: | 2,600-2,630p | 12-MONTH HIGH: | 3,635p | LOW: 1,700p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 47 | |
| NET ASSET VALUE: | 597p* | NET DEBT: | 48%** | |
| Year to 29 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 117 | 10.4 | 33.3 | 17.0 |
| 2017 | 152 | 12.5 | 36.7 | 20.0 |
| 2018 | 186 | 12.1 | 40.4 | 24.0 |
| 2019 | 217 | 16.7 | 50.9 | 27.0 |
| 2020 | 238 | 18.3 | 55.9 | 8.5 |
| % change | +9 | +9 | +10 | -69 |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| *Includes intangible assets of £154m, or 565p a share **Includes lease liabilities of £30m | ||||
