First Derivatives 'excited' about future as sales lift again

First Derivatives saw its revenues lift by 2.5 per cent in the six months to August this year
First Derivatives saw its revenues lift by 2.5 per cent in the six months to August this year

NEWRY data specialist First Derivatives has described its half-year trading performance as "resilient" and said it was "excited" by future growth opportunities, including those presented by the current pandemic.

Reporting for the six months to August 31, a half year covering virtually the entire Covid period, the company said it increased it sales by 2.5 per cent from £116.7 million to £119.6 million.

And despite its pre-tax profit enduring a double digit percentage drop from £8.4m to £7.4 million a year earlier, FD manage to virtually halve its debt (excluding lease obligations) to £30.6m from £60.2m.

"We have demonstrated the group's resilience while continuing to focus on the considerable opportunity ahead," chair Donna Troy said.

"It is clear that the use of data, particularly streaming operational data, to drive decision-making will become critical for enterprises, and Covid-19 will accelerate this trend."

But First Derivatives, which counts many of the world’s top leading investment banks as customers along with firms like Aston Martin Red Bull Racing, conceded that its trading outcome for the full year remains uncertain, with a wider range of possible outcomes than is typical.

The chair added: "Despite this uncertainty, we anticipate our high level of repeat and recurring revenue will underpin our performance for the full year.

"But we are confident in our strategy and excited by the growth opportunities in the medium term and will continue to invest to maximise our market position."

She went on: "With our new leadership teams in place following a number of senior appointments we are making good progress on our strategic objectives, with enhancements to our internal structures and go-to-market capabilities as well as our technology roadmap."

FD operates from 15 offices across Europe, North America and Asia Pacific, including its headquarters in Newry, and employs more than 2,400 people worldwide.

The company revealed it had paused graduate recruitment in March in response to the Covid outbreak, but has resumed hiring to keep pace with growing demand, with 41 new graduates recruited last month alone.

Among the performance highlights over the period, a 12 per cent software license growth drove total software revenue up 4 per cent to £74.4m.

Managed services and consulting revenue were in line with the previous period at £45.2m, with FD's strategic client relationships and market-leading services protecting its revenue base and providing a solid foundation for a return to growth.

And the release of version 4.0 of its Kx technology further advanced the firm's performance by five times over the previous version.

The interim results also showed that FD's research and development costs rose 37 per cent to £7.7m from £5.6m while finance expenses rose 54 per cent to £2.5m from £1.6m.