Profits and revenue up at First Derivatives

SPECIALIST Irish technology firm First Derivatives has said that it has made a strong start to the second half of its financial year; building on a good first six months.

The Newry-headquartered company, which specialises in the provision of software support services to the investment bank and hedge fund administration sectors, yesterday reported a 5.1% year-on-year increase in pre-tax profits for the six months to the end of August, to £3.4 million (€3.9m).

Operating profit increased by over 14% to £3.6m, while earnings per share for the period were up by 4.5%, year-on-year. First half turnover amounted to £22.4m — 26.2% more than for the corresponding period last year.

EBITDA (earnings before interest, tax, depreciation and amortisation) amounted to £5m, up from £4.2m and there was a 3.4% increase in the interim dividend for shareholders, to 300p per share.

The company’s net assets amounted to £29m, as of the end of August, up from £21.7m at the same stage in 2010. The firm has a strong international presence; with a presence in mainland Europe, North America, Asia and Australia.

First Derivatives’ chairman, David Anderson said yesterday that the benefits of continued investment in the group’s activities are “starting to show through”.

“We’ve signed a number of contracts during the period, which will start to become revenue generating in the second half and we have a healthy pipeline of prospects. Despite a background of market turbulence, we’ve made a strong start to the second half and expect to report profits for the year in line with market expectations,” he added.

Clodagh McCarthy of Goodbody Stockbrokers said that her firm’s positive stance on First Derivatives — the broker currently has a ‘buy’ tag on the London and Dublin-quoted stock — is “underpinned by ongoing product investment”.

“Considering the current market backdrop, we view these results as encouraging. As expected, prior merger and acquisition activity and continuous product investment had a positive impact on the company’s first half results.”