Data firm First Derivatives sits on £64m cash pot to help if trading conditions worsens

First Derivatives in Newry says it is prepared for a deterioration of conditions around Covid-19
Gary McDonald Business Editor

NEWRY big data firm First Derivatives continued to trade positively in the second half of its financial year to the end of February, but warns there'll be a lengthening of software sales cycles until the impact of Covid-19 is clearer.

And it also revealed that it is sitting on £64 million cash to help its liquidity should conditions deteriorate markedly.

In a trading update to the London stock market, the board said it expects to report a financial performance in line with forecasts of £241 million sales and £46m of pre-tax profits.

It also said that net debt at the period end was £50m, which was better than the consensus forecast of £56m.

FD, which for more than 20 years has been providing data to many of the world’s largest finance, technology, retail, pharma, manufacturing and energy institutions, made specific reference to the pandemic in its latest statement.

It said: "The global operations of the group enabled us to identify the business disruption threat early, and we implemented our pandemic plan at the beginning of February across all regions in which we operate.

"A team led by chief executive Seamus Keating and comprising senior leaders coordinated the action, with the priorities of protecting the health and wellbeing of our employees and supporting our customers.

"We support mission-critical fintech systems across the financial industry and in other markets our technology is key to the success of our customers, and various measures we've put in place, including remote working, are working without significant disruption to the business."

The company says is has seen no financial impact to date from the effects of Covid-19 but is continues to monitor developments closely through regular contact with customers across all its global markets.

But it confirmed that at the end of March it had £64m in available cash, which included £35m of funds drawn down from its available finance facilities, with the funds placed on deposit to help liquidity should conditions deteriorate. It has a further £15m in undrawn revolving credit facilities available to it.

It added: "It's still too early to determine what impact may result from Covid-19, particularly if there is an extended period of economic disruption.

"But we believe we have acted prudently to mitigate any potential impact through a range of measures aimed at ensuring our ongoing financial liquidity.

"In the longer term, we remain confident in our strategy, and in particular the growth in demand for our world-class Kx technology from both potential customers and partners."

The group will announce its full year results on May 19.

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