Business

Record-breaking year for First Derivatives as revenues soar by 41 per cent

First Derivatives is headquartered at Canal Quay, Newry
Gary McDonald Business Editor

NEWRY-based software firm First Derivatives saw its sales soar by a record-breaking 41 per cent in its 2016 financial year - comfortably ahead of analyst projections.

The company, which provides trading and risk management software systems and consulting services for many of the world's leading financial institutions, said revenue for the year to February hit £117 million compared to £83.2 million a year earlier.

Adjusted profit before tax rose by 56 per cent to £16.8 m from £10.8m in 2015, while on a non-adjusted basis profit before tax was down 41 per cent to £10.8m from £17.5m over the same period, reflecting various adjustments related to disposal-related gains, acquisition costs and exceptional tax items.

The firm’s consulting business continued to contribute heavily to the figures, recording £75m in revenues during the year - up from £58.3m in the previous 12-month period.

And its software business, which has been a major focus of investment for First Derivatives, jumped 69 per cent from £24. 9m in 2015 to £42m this time, with the group insisting there is still significant room for growth.

"Our commercial success over the past year provides a strong platform for continued profitable growth," the company's chief executive Brian Conlon said.

Chairman Seamus Keating added: “In consulting we are becomingly involved in client projects earlier and in a more strategic way, leading to deeper relationships and enabling us to maintain our high level of revenue visibility as we scale up.

"In software, technology trends continue to move in favour of our Kx technology platform, which is world leading in its big fast data capabilities.

“Software contract wins in capital markets accelerated through the year, driven by strong feedback from reference clients and our ability to assist our clients to address issues such as compliance and regulation.”

First Derivatives, which employs more than 1,600 people worldwide and counts many of the world’s top investment banks, brokers and hedge funds among its customers, has been active on the acquisition trail in recent months.

In January this year it bought big data consultancy QuantumKDB for £2.2 million, along with software development consultancy Affinity Systems in March last year for £7.7 million and financial software experts ActivateClients for £4.75 million.

The group also announced a deal last month with Thomson Reuters that would see its Kx platform used to power the firm’s streaming analytics platform.

First Derivatives is listed on both AIM market in London and Enterprise Securities Market (ESM) in Dublin.

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