Revenue, profits rise at Newry-based First Derivatives

Tech company set to buy out remaining shareholders in Kx technology unit

First Derivatives says it will  take 100%  ownership of Kx Systems by the end of June 2019.

First Derivatives says it will take 100% ownership of Kx Systems by the end of June 2019.


Revenue and profit at Newry-headquartered technology company First Derivatives rose in the first half of the year as demand for its Kx data-analysis software remained strong.

The company, which provides trading and risk management software systems and consulting services to the capital markets industry, said revenue was £105.6 million (€120.8m) in the period ending August 31st, up from £87.8 million a year earlier. That was a rise of 20 per cent.

Gross profit showed a similar climb, increasing 21 per cent to £43.9 million, with pretax profit up 20 per cent to £7.6 million. The company said adjusted earnings after tax were £10.6 million, a 15 per cent rise. The interim dividend was 7.7 pence per share, up 10 per cent year-on-year.

“We are very fortunate that all divisions of the business are growing strongly,” said chief operating officer Adrian Toner. “The pipeline would indicate that confidence will carry into the second half.”

First Derivatives said it saw strong growth of 21 per cent in revenue during the first half of the year, with licence revenue rising 39 per cent on the back of increase demand for the Kx technology.

The company’s managed services and consulting business, still a key part of its business, saw revenue rise 19 per cent.

Fintech revenue at First Derivatives rose 24 per cent to £82.7 million in the first half of the year as software revenue grew and services to clients expanded.

“Our confidence in the growth prospects and the long-term potential of First Derivatives continues to increase, underpinned by demand for our Kx technology across multiple industries and our domain knowledge and growing reputation in managed services and consulting,” said Seamus Keating, chairman of First Derivatives.

Recurring revenue

“The pace of major contract wins across the business, together with our high levels of repeat and recurring revenue, provide confidence and position the group well to continue achieving strong growth. We expect to deliver revenue and adjusted Ebitda slightly ahead of consensus forecasts for the year to February 28th, 2019.”

First Derivatives said it would take 100 per cent ownership of Kx Systems by the end of June 2019, acquiring the minority shareholdings in the business.

Mr Toner said this was a significant move for the company. “We have a controlling interest in Kx at the moment., but this will allow us to fully integrate Kx into the business.”