First Derivatives sees profits rise to £6.9m

Pre-tax profit at capital markets service provider First Derivatives increased by 7% to £6.9m (€8.6m) for the 12 months ending Feb 29.

Revenues at the Newry-based company hit £46m — up 25% year-on-year — and company chairman David Anderson said First Derivatives continues to have a strong pipeline of prospects, has made a strong start to the current year and expects to be able to report further progress in the year to Feb 28, 2013.

Goodbody Stockbrokers analyst Gavin Kelleher said the results highlighted the continued strong growth the group is delivering.

“Consulting revenues grew strongly in the period [+35%], and, while software revenue growth was lower at 8%, an acceleration into FY13 is likely given the relaunch of DeltaFlow and cross-selling potential of its products. We will review our forecasts after speaking to management this morning but we do not expect to materially change our revenue or EBITDA forecasts for FY13, £56m and £12.2m respectively. We reiterate our ‘buy’ recommendation as we believe the current ratings do not reflect the group’s true growth potential.”

Mr Kelleher said consulting revenues of £32.6m were up 35% with the group noting this was driven by an increased client base, new assignments from new and existing clients, and further market penetration.

“The group has launched three new initiatives to position for global trends — legal services, vendor-managed services, and data management teams — and customers are said to have responded well to these.”

The company also increased staff numbers to 662 up from 524 a year earlier. A final dividend of 8.15p is to be paid making the full year 11.2p, up 10%.

Yesterday, First Derivatives also announced the appointment of Keith MacDonald as non-executive director. Mr MacDonald is currently managing director of structured corporate finance for Lloyds Banking Group with responsibility for operations in Europe and North America.