First Derivatives ups its stake in Kx Systems

NEWRY-BASED financial software business First Derivatives has paid £4.7 million to increase its stake in Californian technology firm, Kx Systems, from 5 to 20 per cent.

The Northern Ireland company, which yesterday posted a 66 per cent increase in turnover for the first half of the year, said the acquisition would “further strengthen” its ties with the US firm.

First Derivatives bought 215,115 shares in Kx, whose products are used by leading investment and financial institutions, for a cash payment of $5.4 million and the issue of 520,702 new shares at 244p each.

The Irish company has had a partnership agreement with Kx, which develops products that offer a unified approach to streaming, real-time and historical data analysis, since 1988.

The California firm’s clients include Deutsche Bank, Zurich Financial Group and the NYSE, which yesterday expanded its existing operation in Belfast. First Derivatives said the decision to quadruple its holding in Kx was likely to have a “marginally positive” impact on its earnings in the current financial year.

The Co Down company, which provides software and consulting services to the capital markets, also reported strong interim results yesterday despite the ongoing turbulence in global financial markets.

First Derivatives, which is a London AIM- and Dublin IEX- listed company, saw pre-tax profits jump 36 per cent in the first six months of the year to August 2009 of £3.1 million.

Group turnover in the same period increased to £11.4 million. The firm also increased its net assets by 40.5 per cent to stand at £12.5 million. Earnings per share jumped by more than 42 per cent to 15.4 pence.

David Anderson, chairman of First Derivatives, said the group had invested heavily in the company and in its structure and software products. “These initiatives are expected to result in an increase in our levels of profitability for the next financial year and beyond, ensuring continued advancement for our shareholders.

“The group is trading strongly and continues to see increasing levels of revenue visibility. We remain confident of achieving profits for the full year in line with market expectations.”

First Derivatives will pay an interim dividend of 2.75 pence per share, an increase of 17 per cent on the interim dividend for the first half of 2008.