Newry-headquartered technology company First Derivatives expects to see its growth rate accelerate in the coming months as a result of the Covid-19 pandemic, its chief executive Seamus Keating has said.
The company reported interim results for the six months to August 30th on Tuesday, showing a 12 per cent fall in profit before tax to £7.4 million (€8.17 million). But group revenue increased by 3 per cent to £119.6 million (€132 million) from £116.7 million.
Speaking later, Mr Keating said the nature of the company’s business, which involves helping customers, such as financial services groups, to run their operations, had “certainly stood to us very strongly”.
“What’s also standing out is the opportunity that is here for our business to grow and probably accelerate the growth rate,” he told The Irish Times. “We have been working very hard to make sure we are in the right place and doing the right things to make sure we can capitalise on that growth.”
In terms of challenges brought on by the pandemic, he said there had been “some slower sales cycles with some newer customers or customers in sectors that have been badly affected, like the oil and gas industry”.
“In some areas where we had less experienced consultants, getting them working effectively remotely where they are not as seamlessly part of the team as they would have been in the pre-Covid world presented some challenges, which we have largely gotten over,” he said.
In terms of how the business might cope if the macro situation deteriorates, he said the company has a “young and resilient workforce”.
“They’re agile and adaptable and they’re getting on with it,” he said. “I can see some likelihood of a level of fatigue with the environment but we get over that quickly and we get on with life.”
In relation to Brexit, chief financial officer Graham Ferguson said it would not have any impact on the business.
“We have fewer staff across Ireland and Europe and we see our risk as very low,” he said. “We have established the business models and operating companies that we need to manage any problems that arise so we really don’t see it as having any impact on our business.”
The company’s interim results also showed that adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) was down 2 per cent to £21.5 million following investment in customer success and research and development teams.
The executive directors did not receive a bonus payment for the financial year to February 29th and the board did not recommend a final dividend payment. The payment of dividends will be reviewed at the full year.
The group enjoyed strong cash conversion over the period which saw net debt almost halve to £30.6 million from £60.2 million.
While First Derivatives “rapidly transitioned” its employees to working remotely when Covid-19 struck, it said it has initiated gradual programmes of re-opening offices in recent months.
“While sales cycles across the group have lengthened, we are also seeing areas of increased demand for solutions that enable our clients to manage their business more effectively,” it said.
“Having conducted scenario testing with a range of assumptions including a severe, extended downturn in economic activity we remain confident that the group will continue to be profitable and cash generative.”
First Derivatives chairwoman Donna Troy said the company was dealing well with current challenges.
“It is clear that the use of data, particularly streaming operational data, to drive decision-making will become critical for enterprises, and Covid-19 will accelerate this trend,” she said.