First Derivatives overcomes 'especially traumatic year' to post record revenues

First Derivatives posted record revenues of £237.8 million in the year to February
Gary McDonald Business Editor

NEWRY-based financial technology firm First Derivatives posted record revenues of £237.8 million in the year to February, boosted by a particularly strong performance in its software division.

The company's pre-tax profit also lifted by nine per cent to £18.3 million in what chief executive Seamus Keating described as “an especially tough year” in a reference to the passing last July of its founder Brian Conlon, but also “a year of strong organic growth”.

And FD, which provides software and services to investment banks and other financial institutions, says it is set to dive deeper into markets where it has tentatively already diversified, including energy, telecoms, gaming and the automotive industry.

Mr Keating, who stepped into the CEO role in January this year, told the Irish News: “I've been really impressed by the way our people responded to the trauma of last year to continue the success of the business.

“There was such a motivation and determination to continue the success of First Derivatives. A spirit of entrepreneurship shone through in a way it mightn't have done in other businesses, allowing us to carry on and look to the future.

“Now we are focussing on areas where we know there are fresh opportunities.”

Brian Conlon was chief executive of financial software firm First Derivatives

He added: “We have been, and continue to be, the engine room of many global investment banks, and post-Covid we envisage growing demand for our world-class Kx streaming analytics from both potential customers and partners in sectors outside financial services.”

It came as First Derivatives confirmed that it has signed a global partnership agreement with Tata Consultancy Services (TCS) whereby the two companies will develop and deploy solutions based on Kx technology and will be targeted at TCS’s client base across multiple industries.

Mr Keating said: “We've been impressed with the commitment shown by TCS and excited by the potential to accelerate our route to market across industries that this partnership provides.

“We look forward to working with TCS by combining their industry and domain expertise and our world-leading Kx platform.”

Its accounts show that total assets at FD increased over the year by 21 per cent to £335.8m, and that's after it paid $58.3m in cash in June (about £40m) to finalise the acquisition of the minority shareholdings in Kx Systems, taking 100 per cent ownership.

The company, which employs 2,500 staff, about half of whom are based in Northern Ireland, saw its software revenues rise 13 per cent to £148.4 million, driven by a 23 per cent growth in recurring software licence revenue.

This makes up 62 per cent of its total revenues (up from 60 per cent last year), with the remainder of turnover coming in managed services and consulting, where margins were hit marginally by what is said was "slower client decision-making through the year".

Enjoy reading the Irish News?

Subscribe now to get full access