Fidessa profits to flatline after brokers’ dip in equity volumes

Michael Bow
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FIDESSA, the London-listed company that makes trading systems for brokers, yesterday warned there would be no revenue growth at the firm this year due to a squeeze on software spending by brokerage customers.

The FTSE 250-listed firm said its customer base was being hit by lagging equity volumes, leading to a drop in demand for its traditional software products and cutting short revenue growth, expected to be around £274m for 2012.

It added that a focus on its derivatives business, which is expected to grow but currently accounts for just two per cent of revenues, would also lead to lower margins, as it pours money into developing new products.

Analysts at Numis cut profit forecasts by two per cent on the news. Jefferies cut pre-tax profit forecasts by 3.2 per cent to £42.1m.

Chief executive Chris Aspinwall told City A.M.: “We’re not thinking it’s likely anything will change in the immediate future.

“It’s tied to macroeconomic conditions. For things to change, we need the equity market to stop contracting and stabilise.”