Market technology firm Fidessa beats profit expectations

City A.M. Reporter
Fidessa said competition between exchanges and new trading venues boosted demand for its systems software, enabling it to beat profit expectations and return cash to shareholders.

The British IT firm, whose systems are used by brokers and banks, has benefited from a proliferation of trading venues and the increasing competition between European exchanges and multilateral trading facilities, including Chi-X and BATS.

“People need to know where the best liquidity is and we are providing tools which help them get a consolidated view and then automate their trading flow on to the best markets,” chief executive Chris Aspinwall said yesterday.

Market conditions steadily improved towards the end of 2009 but the economic situation and the possibility of government regulation made 2010 difficult to predict, he said.

“On the assumption that markets remain reasonably stable we believe that we can continue to deliver good growth for 2010 as a whole,” he said. However, consolidation among banks and brokerages meant growth would probably not be as high as in 2009, he said.

The company posted a 31 per cent rise in adjusted pretax profit of £36.2m, compared with the average forecast of £32.5m. Sales rose 26 per cent to £238.5m after a boost from currency exchange. Fidessa said it ended the year with £45m in cash, and would pay a special dividend of 40p a share.

Analysts at Numis, who rate the stock a “buy”, said the results were a “touch ahead” of their expectations, and there may be room for a two to three per cent upgrade for 2010.