Fidessa shares rise after being boosted by a year of change
Fidessa's share price jumped nearly four per cent after revealing it was well placed to take advantage of regulatory and structural change and posting "solid" full-year profit growth.
The figures
Revenue at the trading software firm for the year to December 2016 grew by 12 per cent to £332m, although this was three per cent growth based on constant currencies.
Profit before tax jumped 25 per cent to £49m but again there were considerable FX tailwinds – on a constant currency basis the increase was one per cent.
Both normal and special dividend payments grew by 11 per cent to 28.4p and 50.0p per share respectively.
Cash flow for the year increased 22 per cent to £95m.
Read more: Fidessa claims small impact of more investment on margins
Why it's interesting
Fidessa's performance was buoyed by the fact it reports in sterling but its revenues are generated in foreign currencies.
Over two-thirds of sales are made in non-sterling denominations and 60 per cent are made outside the Eurozone.
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However Peter McNally, an analyst at Shore Capital, revealed there was a chink in the armour of Fidessa's full-year figures.
While Fidessa’s results are in-line, markets outside of derivatives remain weak.
We still think it is a solid, well-run company – it’s just that its end markets remain weak, activity in multi-asset is good, but overall it has the lack of growth, despite the benefits it has seen with sterling.
Read more: Fidessa launching £17m special dividend despite sterling impact
What the company said
Fidessa chief executive Chris Aspinwall said:
"2016 has seen a period of exceptional change and uncertainty for our customers. During the year, structural and regulatory drivers have started to impact across the market and, at the same time, customers have been faced with uncertainty around how the political environment might affect their business.
"For Fidessa, however, although there was some evidence of stress during the second half of the year as firms took stock of the impact of the Brexit decision and the US election, levels of new business activity generally remained high and, when combined with the weakness of sterling, this enabled us to deliver solid growth for the year as a whole.
"In the US there are signs that the regulatory environment may be loosened but, whilst early indications are that our customers see this as beneficial, at this stage it is too early to say how this might develop.
"Overall, we continue to believe that we are well positioned to benefit from the opportunities that will arise in the markets as a result of regulatory and structural change. "