News Column

Strong sterling hurts revenue and profit growth at Fidessa in the first half of 2014

August 5, 2014

OLIVER SMITH



FIDESSA, which makes software for financial traders, reported a four per cent fall in profit during the first half of 2014, as a strong pound offset its gains from improving market conditions.


The FTSE 250-listed company said its revenue fell two per cent due to the impact of consolidation, restructuring and closures across its customer base. "Whilst the return to underlying growth is welcome, the exceptional strength of sterling during the first half has more than offset this growth and has affected the reported numbers. Whilst we expect this effect to be transient, we believe it is likely to be a factor for the remainder of the year," said chief executive Chris Aspinwall.


Fidessa saw profit fall to 19.7m for the six months to 30 June while revenue fell to 137.1m.


"We believe that as stability and opportunity return to the markets, the headwind reduction, coupled with further openings as our multiasset initiative gains momentum, will enable us to return to growth levels closer to those we have seen in the past," added Aspinwall.


Shares closed down 1.17 per cent at 2,032p.


ANALYST VIEWS By Oliver Smith WHAT DID YOU MAKE OF FIDESSA'S INTERIM FINANCIAL RESULTS? DAVID TOMS NUMIS The derivatives business continues to show very good momentum, doubling year-on-year (now eight per cent of revenue). Unfortunately, the reduction in "market" headwinds is currently offset by very strong currency headwinds which currently look set to persist in the second half of 2014.


GEORGE O'CONNOR PANMURE GORDON In our view the underlying investment case hasn't changed. Our view is that structurally the market has changed which has increased customer defections, rather than a cyclical change, and Fidessa's numbers yesterday support this. We retain our hold rating for now.


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Source: City A.M. (UK)


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