TIDMFDP
RNS Number : 4025Y
First Derivatives PLC
17 May 2016
17 May 2016
First Derivatives plc
("FD", the "Company" or the "Group")
Preliminary results for the year ended 29 February 2016
FD (AIM:FDP.L, ESM:FDP.I), a leading provider of software and
consulting services, announces its results for the year ended 29
February 2016.
Financial Highlights
Revenue GBP117.0m (2015: GBP83.2m) +41%
Adjusted EBITDA* GBP23.3m (2015: GBP15.5m) +51%
Profit before tax GBP10.4m (2015: GBP17.5m) -41%
Adjusted** profit before tax GBP16.8m
(2015: GBP10.8m) +56%
Adjusted** fully diluted EPS 51.7p
(2015: 38.8p) +33%
Full year dividend 17.0p per share
(2015: 13.5p) +26%
Net debt GBP15.1m (2015: GBP15.7m)
*Adjusted for share-based payments, profit on disposal of
property and acquisition costs
**Adjusted for amortisation of acquired intangibles, share-based
payments, profit on disposal of property, net gain on disposal of
investment in associate, acquisition costs, finance translation
income/charges (and exceptional taxation for EPS)
Business Highlights
- Consulting revenue up 29% to GBP75.0m (2015: GBP58.3m), driven
by high levels of repeat revenue and a number of new multi-year
assignments within large investment banks.
- Software revenue up 69% (organic: 27%) to GBP42.0m (2015:
GBP24.9m), driven by a record number of software wins during the
year. These included a number of flagship wins across our range of
capital markets products, the full financial benefit of which will
be felt in the current financial year.
- Further investment in the business, as FD gears up to deliver
continued high levels of growth in revenue in both software and
consulting.
- Strategic acquisitions of Affinity Systems and ActivateClients
enabling the Group to expand its software revenues beyond capital
markets.
- Board strengthened through the appointments of Virginia Gambale and Jon Robson.
- Strong start to the current financial year.
Seamus Keating, Chairman of FD, commented: "This was another
successful period for FD, with progress across the Group resulting
in record results and positioning us strongly for future years. In
consulting we are becomingly involved in client projects earlier
and in a more strategic way, leading to deeper relationships and
enabling us to maintain our high level of revenue visibility as we
scale up. In software, technology trends continue to move in favour
of our Kx technology platform, which is world leading in its big
fast data capabilities. Software contract wins in capital markets
accelerated through the year, driven by strong feedback from
reference clients and our ability to assist our clients to address
issues such as compliance and regulation. We are also pleased with
developments in other markets for our software and in particular
utilities and digital marketing, where we are already generating
revenue. We expect another year of strong growth, at least in line
with market forecasts, while continuing to invest for growth in the
future."
For further information, please contact:
First Derivatives plc +44(0)28 3025 2242
Brian Conlon, Chief Executive Officer www.firstderivatives.com
Graham Ferguson, Chief Financial Officer
Ian Mitchell, Head of Investor Relations
Investec Bank plc
(Nominated Adviser and Broker)
Dominic Emery
Carlton Nelson
Sebastian Lawrence +44 (0)20 7597 4000
Goodbody (ESM Adviser and Broker)
Linda Hickey
Finbarr Griffin +353 1 667 0420
Walbrook PR
Paul Cornelius
Nick Rome
Helen Cresswell
Sam Allen +44 (0)20 7933 8780
About FD
FD is a global technology provider with 20 years of experience.
The Group's Kx technology is used by some of the world's largest
finance, technology and energy institutions. FD employs over 1,600
people worldwide and has operations in London, New York, Stockholm,
Singapore, Hong Kong, Tokyo, Sydney, Palo Alto, Toronto,
Philadelphia, Dublin, Belfast and its headquarters in Newry.
For further information, please visit
www.firstderivatives.com
CHAIRMAN'S STATEMENT
We are pleased to report another year of strong progress against
our objective of delivering sustainable, long term growth across
our activities. Our increasing scale as a technology and consulting
provider enables us to play an important role supporting the major
changes underway in global capital markets.
Our software applications enable the real-time capture and
analysis of market data and our clients include the top 10 global
investment banks, financial regulators and stock exchanges,
demonstrating the market-leading performance capabilities of our
technology. Our range and depth of consulting services has expanded
significantly in recent years, helping us assume the role of
trusted adviser to our clients.
While significant potential remains to expand within financial
services across all our activities, the Group is also capitalising
on its software capabilities by expanding into other markets which
face similar data management and analysis challenges in a manner
consistent with our drive to deliver sustainable growth.
Revenue for the year increased by 40.6% to GBP117.0m (2015:
GBP83.2m), while adjusted EBITDA rose by 50.5% to GBP23.3m (2015:
GBP15.5m) and adjusted earnings per share increased by 33.2% to
51.7p (2015: 38.8p).
Net debt (loans and borrowings less cash and cash equivalents)
at the period end was GBP15.1m (2015: GBP15.7m). The Board has
recommended payment of a final dividend of 12.00p per share (2015:
10.20p per share) which, together with the interim dividend of
5.00p per share paid in December 2015, gives a total dividend for
the year of 17.00p per share, an increase of 25.9% compared to the
prior year. The final dividend, if approved at the AGM on 23 June
2016, will be paid on 15 July 2016 to those shareholders on the
register on 17 June 2016.
Software
We experienced an acceleration of contract wins through the year
within Capital Markets, driven by demand from clients. Our
capability to service that demand increased following investment
both during the year and in prior years in software development,
pre-sales support, sales and marketing, implementation and
support.
Despite our success during the year, we still remain at the
early stages of commercial exploitation of our software products
within financial services and believe we have significant room for
growth. FD's core competitive advantage is our capability to
address client challenges around the management of large volumes of
data in real time for the purposes of risk management, balance
sheet optimisation and for regulatory and compliance purposes, all
of which resonate strongly with existing and potential clients. The
success of deployments of our software to date is driving further
growth in our pipeline as satisfied customers report the benefits
it is delivering to their business.
Outside financial services, we are making strong progress in
digital marketing and utilities, where the acquisitions of Prelytix
LLC and Affinity Systems Limited respectively have accelerated our
growth. We continue to work to position ourselves in additional
markets and have developed a pipeline of direct sales opportunities
across them. We are also exploring opportunities to partner with
companies with domain expertise in these areas to accelerate our
growth.
Consulting
Consulting performed strongly, driven by a combination of the
formation of deeper and more strategic relationships with clients
as the Group's scale of operations and mix of skills grows together
with increased demand for the Group's consulting expertise,
particularly in compliance and regulation. During the year the
Group won a number of client engagements on strategic change
management projects with large investment banks that are expected
to be multi-year in nature. These types of project wins are
testimony to the growing scale and reputation of the Group.
Corporate Development
Following the transformational acquisition of Kx Systems in
2014, the Group continues to make selective strategic acquisitions
to enhance its competitive position and accelerate its growth in
new target markets. In March 2015 the Group acquired Ontario-based
Affinity Systems Limited ('Affinity'), a software development
consultancy specialising in utility, retail and healthcare data
management. Since acquisition, Affinity has boosted our market
presence in utilities and sensor data management and driven
partnership discussions with Utilismart for the provision of
analytics using FD's Kx technology platform combined with
Utilismart's suite of smart grid applications.
Additionally we acquired Dublin-based ActivateClients Limited in
March 2015, a software business with important HTML5 capabilities
targeting financial markets. This has significantly enhanced our
capabilities to visualise real-time data and has increased the
competitiveness of our solutions across the product range.
These acquisitions enable the Group to continue to meet the
growing demand in our software businesses within capital markets as
well as providing the expertise to leverage our core software
infrastructure assets across other important market sectors. The
Group will continue to evaluate opportunities that meet its strict
acquisition criteria.
Board Changes
On 24 March 2015, Pat Brazel resigned as a Non-Executive
Director to join the Group in an executive role, as Global Head of
Software Sales. On behalf of the Board I would like to thank Pat
for his contribution to the Group both as a Non-Executive Director
and in the growth of our software business over the past year.
After the year end, Non-Executive Director David Anderson stepped
down from his position after 14 years, including 11 years as
Chairman of the Group, from the time of its IPO on AIM in 2002. His
contribution to the success of the business has been invaluable and
on behalf of my Board colleagues I thank him and wish him a happy
retirement.
Virginia Gambale was appointed a Non-Executive Director of the
Group on 3 March 2015. A U.S. citizen, Ms Gambale has extensive
experience as an enterprise technology buyer in capital markets, a
technology venture capital partner and an independent director
across diverse industry sectors. On 3 August 2015, Jon Robson
joined the Board as a Non-Executive Director. Jon has significant
experience in global capital markets, as former CEO of NYSE
Technologies Inc, and previously as a senior executive in Thompson
Reuters. I welcome both Virginia and Jon to the Board and thank
them for the contribution they are making.
Current Trading and Outlook
The current financial year has started positively, with
continuing high levels of growth in consulting and further progress
in software. We are confident that our high level of repeat and
recurring revenue provides the foundation for another year of
strong, profitable growth. In software, the full-year impact of
deals signed during the past year, coupled with a strong pipeline,
provides confidence that we can again generate good growth at high
margins. We also expect to make further progress in positioning our
software in sectors beyond financial services. In summary, we
expect another year of strong growth, at least in line with market
forecasts and to continue to invest for growth in later years.
I would like to thank the staff of FD and my Board colleagues
for their hard work in achieving another successful year of growth
for the Group.
Seamus Keating 16 May 2016
Chairman
CHIEF EXECUTIVE'S STATEMENT
Market conditions within the Capital Markets sector remained
positive over the past year with the most consistent themes being
complex and widespread increases in and changes to regulation and
pressure within investment banks to reduce costs, through the use
of new technology or changes to the way that technology is
delivered. Both of these trends play to FD's strengths and
consequently the Group enjoyed another successful year.
In addition to the further progress made within financial
services, we have started to see the benefits of investment within
our business in prior years as we seek to extend our Kx technology
products and services into other markets. We made three
acquisitions during the year to accelerate this process and made
significant progress, particularly within digital marketing and
utilities, as we seek to exploit our leadership position in the
field of Big Fast Data. We have continued to invest internally to
exploit the wide range of opportunities available to the Group in
these markets and others such as pharma, telecoms and sensor
analytics.
It is important to note that we are delivering solutions to
different markets using a common technology platform, a common
technical infrastructure, a single sales team, a pooled 24/7 global
support team and a single R&D team. This produces significant
economies of scale, reduces time to market for new products and the
operational leverage and the low incremental cost of acquiring and
supporting new customers should continue to deliver increased
margins.
Review of activities
FD provides software products that enable the world's largest
finance, technology and energy institutions to meet the most
demanding data management challenges they face. In particular, this
includes enabling decisions to be taken in real-time based on the
analysis of events as they happen - in Capital Markets this may
trigger the removal of a "fat-finger" trade before it can impact on
trading on an Exchange, while in other markets it could alter the
steering of a driverless vehicle or change the routing on a
telephone call. Our software also enables very large quantities of
data to be sifted to provide insights, for example in drug
discovery for pharmaceutical companies and lead generation in
digital marketing, opening up ways for organisations to turn data
into better informed decisions.
The Group also provides consulting services within Capital
Markets, where our customer base includes investment banks,
brokers, exchanges, regulators and hedge funds. The year under
review has seen further strong growth - as the Group increases the
scale and depth of its offerings it is seeing growing client
demand, particularly for larger, more strategic assignments. This
augurs well for growth in future years.
Software
Software sales during the period increased by 68.7% to GBP42.0m
(2015: GBP24.9m). Our software products are based on Kx technology,
an enterprise platform that incorporates the world's highest
performing time series database. Our software has a number of
features that mark it out as ideal for the increasing number of
applications that require streaming analytics - it provides
high-performance in-memory capabilities, time stamps data to the
nanosecond for true real-time applications and incorporates
geolocation to allow analytics to be performed on devices in
motion. It also has a small footprint, lowering the total cost of
ownership and increasing the competitiveness of our software.
We have also developed a number of software applications which
sit on top of our Kx technology platform, which means that our
software is easier to support, deploy and upgrade. Our approach
fosters rapid prototyping and innovation and allows us to convert
ideas to products very quickly. From its conception we made a
conscious decision to deploy applications in the cloud and on
mobile platforms - this decision has been validated by recent
technology trends. Our HTML5-based visualisation solution, launched
during the year, has been well received by potential clients and is
helping us demonstrate the power of our Kx platform to potential
clients.
A key driver of our market opportunity is the growth in data,
particularly from connected sensors, also known as the Internet of
Things ('IoT'). Industry analysts Gartner estimate that by 2018 the
addressable market for IoT analytics will be $15 billion per annum,
with nine billion connected devices requiring support. Gartner
further believes that real-time latency in processing is key, again
playing to our technology's strength. Finally, Gartner believes
that technology providers delivering the entire solution for
streaming analytics will flourish, as businesses reject the
experimental approach of combining various open source components
in favour of proven and supported technologies such as Kx.
To ensure we retain our technology lead and build on its
capabilities, we formed Kx Labs during the year. Its remit includes
monitoring industry developments and ensuring our technology reacts
quickly, as well as ensuring it can be deployed wherever it is
required, whether that is on the device, across the enterprise or
in the Cloud.
With this combination of existing clients and growing demand
within Capital Markets and investment in other markets, delivered
on an annually recurring license basis, we believe we have the
potential to deliver many years of growth in our software
business.
Capital Markets Software
Our software was designed from inception to tackle the most
demanding data management challenges in Capital Markets and its
leading capabilities are evidenced by the fact that all of the top
10 global investment banks use our Kx technology. In recent years
we have extended the addressable market for our software by
building applications, targeting areas such as liquidity
management, surveillance and algorithmic testing. The combined
addressable market for these products is valued at billions of
dollars per annum and our products are offered as a hosted,
multi-tenanted solution so the incremental cost of signing new
customers can be minimal.
In the year under review we accelerated the commercialisation of
our software. In prior years our focus has been on winning
reference clients and ensuring our products are robust, scalable
and functionally rich. Having achieved those goals, our emphasis
has progressed to growing our customer base, backed by investment
in recent years in sales and pre-sales capability. We have enjoyed
significant success in this regard over the past twelve months.
Our key wins in the past year have been with some of the world's
largest financial institutions and across our product sets. As a
result, we can now reference the Securities and Exchanges
Commission, Deutsche Borse, the National Stock Exchange of India,
IEX (a high-growth equity trading venue based in New York), Thomson
Reuters, the Singapore Exchange and EBS as clients. A number of
large buy and sell side clients have signed significant multi-year
deals with us in the last year.
Our product range continues to evolve with significant
investment in our offerings. These innovative and strategically
important solutions address an increasing number of market
regulations, including MiFID II that comes into effect in 2017. For
example, we have developed an Algo Testing facility that allows
market participants to test their algorithms before they go live.
In April 2016 we signed a significant deal with a large bank in
Singapore to address their obligations under MiFID II and MAR
across all asset classes.
Digital Marketing
Our Kx for Digital Marketing platform uses predictive analytics
to provide commercial organisations with unique sales intelligence.
The platform analyses various internet data sources to identify
leads based on key word searches. These leads are nurtured, using
voice and electronic content, until they are fully qualified, at
which point they are passed on to the client's sales operation for
action. We are also able to monitor the subsequent performance of
sales against the leads generated to prove the return on investment
to our clients.
Kx technology provides a differentiator in this situation by
virtue of the amount of data that needs to be analysed to generate
this market intelligence. Our business model is subscription based,
adding to the Group's recurring revenues and clients won during the
year include Cisco, Netsuite and Citrix. This business generated
strong growth over the course of the past year and we believe it
has considerable potential in its market.
Utilities
In addition to our developing relationship with a major North
American Independent System Operator (ISO), as it evaluates the use
of our sensor data platform, we are working in partnership with
Utilismart Corporation for the use of Kx technology for sensor
analytics. As a result, FD will provide its Kx technology and
related infrastructure to complement Utilismart's suite of smart
grid software applications. This will be targeted at more than
3,000 utilities in the U.S. alone for the purposes of data
collection, processing and analytic services for meter and sensor
data. Utilismart already has more than 100 clients and FD will be
remunerated on a monthly recurring revenue share basis for
additional meters installed.
Additional vertical markets
Since taking a controlling stake in Kx Systems in October 2014,
we have been convinced of the opportunity for our technology beyond
Capital Markets. This has been proven by our progress in digital
marketing and utilities and we are excited by the potential for
growth in a number of other markets.
During the year we have advanced on a number of fronts in
markets such as pharmaceutical, telecoms and sensor analytics. We
are building a pipeline of opportunities and in certain of these,
we are in the process of arranging proofs of concept to demonstrate
our technology's capabilities. The typical feedback from our
discussions is that Kx technology is considerably higher performing
than competing solutions and that potential clients appreciate the
robustness of the solution and the competitive total cost of
ownership. We are also in discussions with a number of
organisations that have domain expertise in these markets to act as
potential partners to further accelerate our route to market.
Consulting
Consulting recorded another solid period of growth, with
revenues increasing by 28.6% to GBP75.0m (2015: GBP58.3m) in the
year to 29 February 2016.
Over the twenty years since its inception, the Group's
consulting business has built a reputation as one of the leading
niche Capital Markets consulting companies in the world. Throughout
this period, our underlying philosophy of providing highly trained
consultants who understand both Capital Markets and the technology
it employs, has remained unchanged. We have added to this
foundation by developing a number of offerings, including
multi-vendor application and support, regulation and compliance,
which allow us to bid for larger projects, to lock-in recurring
revenue and to cross-sell software products.
Our multi-vendor application support provides a single team to
support a range of third party applications such as Calypso, Murex
and Summit as well as legacy in-house systems. This
multi-disciplined team is also responsible for upgrades, testing,
customisation and development of interfaces at the client.
In addition, our regulatory and compliance practice is growing
strongly, helping our clients meet the requirements of legislation
around the world. We are currently tracking 65 different policy and
regulation initiatives impacting our global client base and FD
provides practical solutions that accelerates our clients' own
compliance initiatives. This also frequently includes use of our
internally developed software tools such as DART, which automates
much of the work around know your client regulations.
Our differentiators, which include the strength of our internal
training programme, the ability to operate on a hybrid on-site and
near shore model and a relentless focus on client satisfaction,
have enhanced our reputation and enabled us to grow our areas of
expertise. We are committed to helping our clients reduce the total
cost of their mission critical systems by providing lower cost,
high quality solutions that meet our clients' key requirements.
As a result, we have ongoing contracts with many of the leading
global banks, providing implementation, support and development
across a range of asset classes including credit, interest rate,
foreign exchange, equity, cash and derivatives markets.
In recent years we have added scale to our activities, which has
enabled us to win larger and more strategic assignments. Some
examples of those won during the past year include:
-- A contract with a major investment bank to lead a strategic
transformation programme, using our global experience to advise
across the bank's operations.
-- A multi-year agreement for the support of mission critical
applications with a major investment bank. The contract includes
near shore support across the bank's applications.
Since the year end we have continued to grow the number of
chargeable consultants in response to continued strong demand. We
continue to enjoy excellent revenue visibility and look forward to
another year of strong growth.
Management and Personnel
The Group now employs over 1,600 people, up from over 1,200
people at the same time last year. The increasing competitiveness
of our products and services together with the opportunity to work
on cutting edge technologies in locations around the world continue
to help us secure new talent and achieve high retention rates.
This year the Company celebrates 20 years since it was founded.
It is a tribute to the hard work, talent, flexibility and
dedication of all FD employees that the Company not only continues
to grow, but that its growth rate has accelerated. It is also
fitting that the quality of the training and opportunities we
provide to staff has been recognised through our inclusion, for the
first time, in the Times Top 100 Graduate Employers. This is an
influential publication that will assist our ongoing mission to
recruit leading talent from around the world.
Summary
Our commercial success over the past year provides a strong
platform for continued profitable growth. In Capital Markets our
focus on growing our customer base has led to a substantial
increase in our recurring revenues and provided significant returns
for shareholders. Our success in Capital Markets is a great calling
card as we seek to penetrate new markets. Our investments in
building a position in additional markets is progressing to plan
and we remain excited by the potential of our Kx technology to
disrupt a number of markets. Our building success in digital
marketing and utilities reinforces that confidence and the Group
will continue to accelerate the expansion of its addressable market
while maintaining its financial discipline.
Brian Conlon 16 May 2016
Chief Executive Officer
Financial Review
The Group performed well in the year with revenue increasing by
GBP33.8 million (40.6%) to GBP117.0m, with organic growth of 27%
and the remainder attributable to the strategic acquisitions made
during the year. Consulting revenue increased by GBP16.7m (28.6%)
and software revenue by GBP17.1m (68.7%). Software revenue
represented 35.9% of Group revenue for the year (2015: 29.9%).
Within our software revenue, GBP21.4m (51% of the total) was
recurring, up from GBP12.0m (48%) in 2015. The remainder was split
between perpetual license sales (GBP3.4m, compared with GBP0.9m in
2015) and the implementation and support of our software (GBP17.2m,
compared with GBP12.0m in 2015).
The Group's EBITDA margin increased to 19.9% for the period
(2015: 18.6%) the principal driver being the greater proportion of
higher margin software sales achieved in the period against
consulting sales. The Group continued to invest for future growth
but kept tight control of costs, with administrative expenses
(before depreciation, amortisation and profit on disposal of
property) up just 13.4% to GBP13.4m. The adjusted profit after tax
for the year of GBP12.9m (2015: GBP8.7m) represented growth of
48.0%.
The Group continued to invest in R&D to maintain its
technology lead, with GBP6.8m (2015: GBP6.6m) of R&D spend
capitalised during the year. The amortisation of our capitalised
software for the year was GBP3.7m, up from GBP2.8m a year ago
making net capitalisation of GBP3.2m (2015: GBP3.8m), excluding
foreign exchange adjustments.
The calculation of adjusted profit after tax is detailed
below.
Year ending end February 2016 2015
GBP'000 GBP'000
Reported profit for the year 7,831 15,915
Adjustments for:
Amortisation of acquired intangibles 4,198 2,205
Share based payment and related
costs 1,405 1,495
Gain on disposal of property - (1,669)
Acquisition costs, associate
disposal costs and contingent
purchase consideration 1,547 984
Gain on foreign currency translation (779) (138)
Effects of investment in associate - (9,582)
Tax effect of the above (1,256) (465)
-------- --------
Adjusted profit after tax 12,946 8,745
======== ========
Adjusted EPS (fully diluted) 51.7p 38.8p
The Group's effective tax rate was 22.7% (2015: 18.8%), while
the fully diluted average number of shares in issue increased to
25.1m (2015: 22.6m). This resulted in fully diluted earnings per
share of 51.7p, representing growth of 33.2% for the year (2015:
38.8p).
The Group generated GBP15.0m of cash from operating activities
(2015: GBP11.2m), representing 138.2% of result from operating
activities (2015: 131.6%). At the year end, net debt was GBP15.1m
(2015: GBP15.7m). Net debt was negatively impacted by GBP2.9m of
foreign exchange differences on the Group's debt, which is
principally dollar-denominated. Net assets at 29 February 2016 were
GBP113.3m compared to GBP98.3m at 28 February 2015.
Consolidated statement of comprehensive income
Year ended 29 February 2016
2016 2015
Note GBP'000 GBP'000
Revenue 2 117,033 83,216
Cost of sales (84,397) (59,497)
Gross profit 32,636 23,719
Other operating income 1,042 1,045
Administrative expenses (22,849) (16,288)
Results from operating activities 10,829 8,476
Acquisition costs, associate disposal
costs and contingent purchase
consideration
purchase consideration 1,547 984
Share-based payment and related
costs 1,405 1,495
Gain on disposal of property,
plant and equipment - (1,669)
Depreciation and amortisation 5,277 3,959
Amortisation of acquired intangible
assets (IFRS 3) 4,198 2,205
Adjusted EBITDA 23,256 15,450
--------------------------------------- ----- --------- ---------
Finance income 1 3
Finance expense (1,225) (723)
Gain on foreign currency translation 779 138
--------- ---------
Net financing expense (445) (582)
Share of profit of associate using
the equity method, net of tax - 57
Loss on dilution in associate
using the equity method - (60)
Gain on disposal of investment
in associate and settlement of
pre-existing relationships - 9,585
Profit before taxation 10,384 17,476
Taxation (2,553) (1,561)
--------- ---------
Profit for the year 7,831 15,915
========= =========
Consolidated statement of comprehensive income (continued)
Year ended 29 February 2016
2016 2015
Note GBP'000 GBP'000
Profit for the year 7,831 15,915
Other comprehensive income
Items that will or may be reclassified
subsequently to profit or loss
Net exchange gain on net investment
in foreign subsidiaries and associate 4,764 2,334
Net loss on hedge of net investment
in foreign subsidiaries and associate (2,704) (1,099)
Reclassification of loss on net investment
in associate - (59)
Reclassification of gain on hedge of
investment in associate - 174
Reclassification of associate revaluation
reserve - (167)
-------- ---------
Other comprehensive income for the
period, net of tax 2,060 1,183
-------- ---------
Total comprehensive income for the
period attributable to
owners of the parent 9,891 17,098
======== =========
Earnings per share Pence Pence
Basic 5 33.3 77.2
Diluted 5 31.3 70.6
======== =========
All profits are attributable to the owners of the Company and
related to continuing activities.
Consolidated Balance Sheet
As at 29 February 2016
2016 2015
Restated*
Note GBP'000 GBP'000
Assets
Property, plant and equipment 6 6,301 5,948
Intangible assets and goodwill 7 151,338 130,604
Trade and other receivables 2,504 2,634
Asset held for sale - 6,234
Deferred tax asset 9,030 6,450
-------- ----------
Non-current assets 169,173 151,870
-------- ----------
Trade and other receivables 38,665 29,952
Cash and cash equivalents 15,100 14,705
Current assets 53,765 44,657
Total assets 222,938 196,527
======== ==========
Equity
Share capital 120 114
Share premium 65,903 55,286
Share option reserve 7,217 6,262
Currency translation adjustment
reserve 370 (1,690)
Retained earnings 39,654 38,352
-------- ----------
Equity attributable to owners of
the Company 113,264 98,324
======== ==========
Liabilities
Loans and borrowings 26,795 27,025
Trade and other payables 31,963 29,490
Deferred tax liabilities 12,289 13,829
Contingent deferred consideration 1,176 1,132
Non-current liabilities 72,223 71,476
Loans and borrowings 3,428 3,429
Trade and other payables 27,262 18,936
Current tax payable 1,488 490
Employee benefits 2,554 3,872
Contingent deferred consideration 2,719 -
Current liabilities 37,451 26,727
Total liabilities 109,674 98,203
-------- ----------
Total equity and liabilities 222,938 196,527
======== ==========
*Restatement relating to measurement period adjustment - refer
to note 3 for further details
Consolidated statement of changes in equity
Year ended 29 February 2016
Share capital Share premium Share option Currency Retained Total equity
reserve translation earnings
GBP000 GBP000 adjustment
GBP000 GBP000 GBP000 GBP000
Balance at 1 March 2015 114 55,286 6,262 (1,690) 38,352 98,324
------------- ------------- ------------ ------------ --------- ------------
Total comprehensive income
for the year
Profit for the year - - - - 7,831 7,831
Other comprehensive income
Net exchange gain on net
investment in foreign
subsidiaries - - - 4,764 - 4,764
Net exchange loss on hedge
of net investment in foreign
subsidiaries - - - (2,704) - (2,704)
Total comprehensive income
for the year - - - 2,060 7,831 9,891
Transactions with owners
of the Company
Income tax relating to
share options - - 827 - - 827
Exercise of share options 3 3,812 (698) - - 3,117
Change in fair value of
NCI put - - - - (2,971) (2,971)
Issue of shares 1 2,599 - - - 2,600
Issue of shares as purchase
consideration 2 4,206 - - - 4,208
Share based payment charge - - 815 - - 815
Transfer on forfeit of
share options - - 11 - (11) -
Dividends - - - - (3,547) (3,547)
------------- ------------- ------------ ------------ --------- ------------
Balance at 29 February
2016 120 65,903 7,217 370 39,654 113,264
============= ============= ============ ============ ========= ============
Consolidated statement of changes in equity
Year ended 28 February 2015
Share Share premium Share option Revaluation Currency Retained Total equity
capital reserve reserve translation earnings
GBP000 adjustment
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 March
2014 98 22,251 6,627 167 (3,040) 25,959 52,062
-------------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive
income
for the year
Profit for the year - - - - - 15,915 15,915
Other comprehensive
income
Net exchange loss on
net
investment in
foreign subsidiaries
and associate - - - - 2,334 - 2,334
Net exchange loss on
hedge
of net investment in
foreign
subsidiaries and
associate - - - - (1,099) - (1,099)
Reclassification of
loss
on net investment in
associate - - - - (59) - (59)
Reclassification of
gain
on hedge of
investment in
associate - - - - 174 - 174
Reclassification of
associate
revaluation reserve - - - (167) - - (167)
-------------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive
income
for the year - - - (167) 1,350 15,915 17,098
Transactions with
owners
of the Company
Income tax relating
to share
options - - (199) - - - (199)
Exercise of share
options 4 4,243 (867) - - - 3,380
Change in fair value
of NCI
put - - - - - (1,017) (1,017)
Issue of shares 5 12,102 - - - - 12,107
Issue of shares as
purchase
consideration 7 16,690 - - - - 16,697
Share based payment
charge - - 721 - - - 721
Transfer on forfeit
of share
options - - (20) - - 20 -
Dividends - - - - - (2,525) (2,525)
-------------- ------------- ------------ ----------- ------------ --------- ------------
Balance at 28
February 2015 114 55,286 6,262 - (1,690) 38,352 98,324
============== ============= ============ =========== ============ ========= ============
Consolidated cash flow statement
Year ended 29 February 2016
2016 2015
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year 7,831 15,915
Adjustments for:
Net finance costs 445 582
Share of profit of associate - (57)
Share of loss on dilution in associate - 60
Depreciation of property, plant and
equipment 1,596 1,193
Amortisation of intangible assets 7,879 4,971
Gain on sale of property, plant &
equipment - (1,669)
Gain on sale of investment in associate - (9,585)
Equity settled share-based payment
transactions 815 721
Grant income (1,042) (1,045)
Tax expense 2,553 1,561
20,077 12,647
Changes in:
Trade and other receivables (6,540) (5,538)
Trade and other payables 3,476 4,430
-------- ---------
Cash generated from operating activities 17,013 11,539
Taxes paid (2,044) (382)
-------- ---------
Net cash from operating activities 14,969 11,157
Cash flows from investing activities
Interest received 1 3
Dividend received from associate - 896
Disposal of property, plant and equipment - 5,035
Disposal of investment net of tax 3,973 -
Acquisition of subsidiaries, net
of cash acquired (4,934) (23,302)
Acquisition of property, plant and
equipment (1,594) (2,228)
Acquisition of intangible assets (6,952) (7,145)
Payment of deferred consideration - -
-------- ---------
Net cash used in investing activities (9,506) (26,741)
Cash flows from financing activities
Proceeds from issue of share capital 5,717 15,487
Proceeds from new borrowings - 29,152
Repayment of borrowings (3,157) (11,747)
Payment of finance lease liabilities (61) (1,038)
Interest paid (1,214) (722)
Dividends paid (6,244) (2,525)
-------- ---------
Net cash used in financing activities (4,959) 28,607
Net increase in cash and cash equivalents 504 13,023
Cash and cash equivalents at 1 March 14,705 1,544
Effects of exchange rate changes
on cash held (109) 138
-------- ---------
Cash and cash equivalents at 29/28
February 15,100 14,705
======== =========
Notes
1 Basis of preparation
The consolidated financial statements consolidate those of the
Company and its subsidiaries (together referred to as the
"Group").
The financial information included in this preliminary
announcement does not constitute statutory accounts of the Group
for the years ended 29 February 2016 or 28 February 2015, but is
derived from those accounts. Statutory accounts for 2015 have been
delivered to the Registrar of Companies and those for 2016 will be
delivered following the Company's Annual General Meeting. The
auditors have reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
Both the consolidated financial statements and the Company
financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting
Standards as adopted by the EU ("IFRSs").
2 Operating segments
Business segments
The group has disclosed below certain information on its revenue
by geographical location. Details regarding total can be found in
the statement of comprehensive income.
The group's two revenue streams are separated as follows:
- Consulting activities which includes services to capital markets; and
- Software activities which includes the sale of intellectual property and related services.
Revenue by division
2016 2015
GBP'000 GBP'000
Consulting 75,025 58,320
Software 42,008 24,896
______ ______
Total 117,033 83,216
______ ______
Geographic location analysis
Revenues Non-current assets
2016 2015 2016 2015
GBP'000 GBP'000 GBP'000 GBP'000
Restated
UK 42,502 35,182 26,016 20,983
Rest of Europe 17,245 13,231 16,534 10,160
America 50,886 28,531 116,115 112,636
Australasia 6,400 6,272 1,478 1,641
______ ______ ______ ______
Total 117,033 83,216 160,143 145,420
______ ______ ______ ______
3 Measurement period adjustment
During the current year, the Group obtained further information
in respect of the identifiable assets and liabilities during the
measurement period relating to the value of a 2% investment held by
Kx Systems in an unquoted entity, a private US company.
The adjustment results in a decrease of goodwill recognised of
GBP3,455k, following receipt of additional information of the fair
value of an investment held by Kx Systems. The measurement period
adjustment was made to reflect facts and circumstances existing as
of the acquisition date and does not result from intervening events
subsequent to the acquisition date.
4 Dividends
2016 2015
GBP'000 GBP'000
Final dividend relating to the prior year 2,323 1,813
Interim dividend paid 1,224 712
------- -------
3,547 2,525
======= =======
The dividends recorded in each financial year represent the
final dividend of the preceding financial year and the interim
dividend of the current financial year.
The final dividend relating to the prior year amounted to 10.20
(previous year: 9.00) pence per share and the interim dividend paid
during the year amounted to 5.00 (previous year: 3.30) pence per
share. The cumulative dividend paid during the year amounted to
15.20 (previous year: 12.30) pence per share.
After the respective reporting dates, the following dividends
were proposed by the Directors. The dividends have not been
provided for and there are no income tax consequences.
2016 2015
GBP'000 GBP'000
12.00 pence per ordinary share (2015: 10.20
pence) 2,881 2,323
======= =======
5 (a) Earnings per ordinary share
Basic
The calculation of basic earnings per share at 29 February 2016
was based on the profit attributable to ordinary shareholders of
GBP7,831k (2015: GBP15,915k), and a weighted average number of
ordinary shares in issue of 23,512k (2015: 20,605k).
2016 2015
Pence per Pence per
share Share
Basic earnings per share 33.3 77.2
Weighted average number of ordinary shares
2016 2015
Number '000 Number '000
Issued ordinary shares at 1 March 22,777 19,542
Effect of share options exercised 283 604
Effect of shares issued as purchase consideration 254 414
Effect of shares issued for cash 198 45
Weighted average number of ordinary shares
at 29/28 February 23,512 20,605
=========== ===========
Diluted
The calculation of diluted earnings per share at 29 February
2016 was based on the profit attributable to ordinary shareholders
of GBP7,831k (2015: GBP15,915k) and a weighted average number of
ordinary shares after adjustment for the effects of all dilutive
potential ordinary shares of 25,047k (2015: 22,554k).
2016 2015
Pence Pence
per share per share
Diluted earnings per share 31.3 70.6
========== ==========
Weighted average number of ordinary shares (diluted)
2016 2015
Number Number
'000 '000
Weighted average number of ordinary shares
(basic) 23,512 20,605
Effect of dilutive share options in issue 1,535 1,949
Weighted average number of ordinary shares
(diluted) at 29/28 February 25,047 22,554
====== ======
At 29 February 2016 72,940 options (2015: Nil) were excluded
from the diluted weighted average number of ordinary shares
calculation as their effect would have been anti-dilutive.
The average market value of the Group's shares for the purposes
of calculating the dilutive effect of share options was based on
quoted market prices for the year during which the options were
outstanding.
5 (b) Earnings before tax per ordinary share
Earnings before tax per share are based on profit before
taxation of GBP10,384k (2015: GBP17,476k). The number of shares
used in this calculation is consistent with note 5(a) above.
2016 2015
Pence per share Pence per share
Basic earnings before tax per ordinary
share 44.2 84.8
Diluted earnings before tax per ordinary
share 41.5 77.5
Reconciliation from earnings per ordinary share to earnings
before tax per ordinary share.
2016 2015
Pence per share Pence per share
Basic earnings per share 33.3 77.2
Impact of taxation charge 10.9 7.6
Adjusted basic earnings before tax per
share 44.2 84.8
Diluted earnings per share 31.3 70.6
Impact of taxation charge 10.2 6.9
Adjusted diluted earnings before tax
per share 41.5 77.5
Earnings before tax per share has been presented to facilitate
pre-tax comparison returns on comparable investments.
5 (c) Normalised earnings after tax per ordinary share
Normalised earnings after tax per share are based on profit
after taxation of GBP12,946k (2015: GBP8,745k). The adjusted profit
after tax has been calculated by adjusting for the amortisation of
acquired intangibles after tax effect GBP3,395k (2015: GBP1,764k),
share based payment and related charges after tax effect GBP1,124k
(2015: GBP1,196k), profit on disposal of property, plant and
equipment after tax effect GBPnil (2015: GBP1,316k), acquisition
and associate disposal costs after tax effect GBP1,219k (2015:
GBP787k), gain on foreign currency translation after tax effect
GBP623k (2015: gain of GBP109k) and for the gain on disposal of
investment GBPnil (2015: GBP9,492k). The number of shares used in
this calculation is consistent with note 5(a) above.
2016 2015
Pence per Pence per share
share
Basic earnings after tax per ordinary
share 55.1 42.4
Diluted earnings after tax per ordinary
share 51.7 38.8
6 Property, plant and equipment
Group Plant
Land and and Total
buildings equipment Office furniture
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2015 2,580 6,322 467 9,369
Additions 140 1,389 65 1,594
Acquisition through business
combinations - 71 - 71
Exchange adjustments 37 506 11 554
----------- ----------- ----------------- ---------
At 29 February 2016 2,757 8,288 543 11,588
----------- ----------- ----------------- ---------
Depreciation
At 1 March 2015 656 2,583 182 3,421
Charge for the year 195 1,271 130 1,596
Exchange adjustments 17 245 8 270
----------- ----------- ----------------- ---------
At 29 February 2016 868 4,099 320 5,287
----------- ----------- ----------------- ---------
Land and Plant and Office Total
buildings equipment furniture
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2014 2,792 4,687 235 7,714
Additions 32 1,960 236 2,228
Acquisition through business
combinations - 25 - 25
Disposals (241) - - (241)
Exchange adjustments (3) (350) (4) (357)
----------- ----------- ----------- ---------
At 28 February 2015 2,580 6,322 467 9,369
----------- ----------- ----------- ---------
Depreciation
At 1 March 2014 460 1,744 152 2,356
Charge for the year 221 936 36 1,193
Disposals (20) - - (20)
Exchange adjustments (5) (97) (6) (108)
At 28 February 2015 656 2,583 182 3,421
----------- ----------- ----------- ---------
Carrying amounts
At 1 March 2014 2,332 2,943 83 5,358
=========== =========== =========== =========
At 28 February 2015 1,924 3,739 285 5,948
=========== =========== =========== =========
At 29 February 2016 1,889 4,189 223 6,301
=========== =========== =========== =========
7 Intangible assets and goodwill
Goodwill Customer Acquired Brand name Internally Total
lists Software developed
software
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1
March 2015 86,734 9,525 21,182 560 28,179 146,180
Development costs - - - - 6,840 6,840
Acquisitions 9,945 1,946 1,313 97 - 13,301
Additions - - 112 - - 112
Exchange adjustments 5,924 893 2,271 51 646 9,785
--------- --------- ---------- ----------- ----------- ---------
At 29 February
2016 102,603 12,364 24,878 708 35,665 176,218
--------- --------- ---------- ----------- ----------- ---------
Amortisation
and impairment
losses
Balance at 1
March 2015 - 2,421 5,803 239 7,113 15,576
Amortisation
for the year - 1,323 2,796 79 3,681 7,879
Exchange adjustment - 307 836 27 255 1,425
--------- --------- ---------- ----------- ----------- ---------
At 29 February
2016 - 4,051 9,435 345 11,049 24,880
========= ========= ========== =========== =========== =========
Goodwill Customer Acquired Brand name Internally Total
lists Software developed
software
Restated Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1
March 2014 13,526 3,547 9,011 361 22,394 48,839
Development costs - - - - 6,594 6,594
Acquisitions 70,281 5,659 12,332 194 - 88,466
Additions - - 551 - - 551
Disposals - - (785) - - (785)
Exchange adjustments 2,927 319 73 5 (809) 2,515
---------- --------- ---------- ----------- ----------- ----------
At 28 February
2015 86,734 9,525 21,182 560 28,179 146,180
---------- --------- ---------- ----------- ----------- ----------
Amortisation
and impairment
losses
Balance at 1
March 2014 - 1,653 4,430 186 4,545 10,814
Amortisation
for the year - 644 1,509 52 2,766 4,971
Exchange adjustment - 124 (136) 1 (198) (209)
---------- --------- ---------- ----------- ----------- ----------
At 28 February
2015 - 2,421 5,803 239 7,113 15,576
========== ========= ========== =========== =========== ==========
Carrying amounts
At 1 March 2014 13,526 1,894 4,581 175 17,849 38,025
======= ===== ====== === ====== =======
At 28 February
2015 86,734 7,104 15,379 321 21,066 130,604
======= ===== ====== === ====== =======
At 29 February
2016 102,603 8,313 15,443 363 24,616 151,338
======= ===== ====== === ====== =======
8 Report and accounts
Copies of the Annual Report will be available as of 31 May 2016
on the Group's website, www.firstderivatives.com and from the
Group's headquarters at 3 Canal Quay, Newry, BT35 6BP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AFMLTMBTBBJF
(END) Dow Jones Newswires
May 17, 2016 02:00 ET (06:00 GMT)
Fd Technologies Public (LSE:FDP)
Historical Stock Chart
From Apr 2024 to May 2024
Fd Technologies Public (LSE:FDP)
Historical Stock Chart
From May 2023 to May 2024