Newry-based First Derivatives reports higher earnings

First Derivatives, the Newry headquartered AIM-listed company, has announced a 9 per cent jump in revenue for the first half of the year to £37.5 million from £34.4 million.

The Northern Ireland company - which provides trading and risk management software systems and consulting services to the capital markets industry - said earnings before interest, tax, depreciation and amortisation (ebitda) was up 17 per cent to £6.8 million compared to £5.8 million in the corresponding period a year ago.

The group reported profit before tax of £3 million, up 24 per cent versus the same six-month period last year. Adjusted profit before tax was £4.5 million, up 18 per cent.

Cash from operating activities rose 2 per cent to £3.3 million while net debt declined from £15 million to £9.1 million.

Software sales during the period fell by 11 per cent to £9.8 million on a reported basis. The fall was largely due to a decline in the services component, as a result of a major implementation in 2013, the company said. Despite the decline, First Derivatives said it expects double-digit growth in software revenues for the full-year.

Consulting revenues increased by 19 per cent to £27.7 million from £23.4 million.

First Derivatives employs over 1,000 people worldwide and counts many of the world’s top investment banks, brokers and hedge funds as its customers. It has operations in London, New York, Stockholm, Singapore, Hong Kong, Sydney, Toronto, Philadelphia, Dublin and its headquarters in Newry.

The company, which increased its shareholding in Californian software firm Kx Systems earlier this month, announced plans to create 484 new jobs in Newry in late June.

"Our high visibility over revenue in our consulting division combined with the software deals signed during the year to date underpin our confidence in meeting market expectations for the full year," said chief executive Brian Conlon.

“The second half has started strongly across the Group, both in terms of business performance and growth in our sales pipeline. We expect a modest enhancement to earnings in the current year from the recent purchase of a majority stake in Kx Systems, with a more positive impact in the year to February 2016 even after significant investment in Kx to maximise its growth potential,” he added.