Revenue at First Derivatives rose 41 per cent in its 2016 financial year, comfortably ahead of initial predictions as the firm’s consulting and software businesses showed significant gains.
The Newry-based firm, which provides trading and risk management software systems and consulting services to the capital markets industry, said revenue for the year ended year ended February 29th, 2016, hit £117 million (€150 million) for the year, compared with £83.2 million a year earlier.
Adjusted earnings before interest, tax, depreciation and amortisation rose 51 per cent to £23.3 million, and earnings per share rose 33 per cent to 51.7 pence.
Pretax profit showed a 41 per cent decline, but the previous year’s figure had included a £9.6 million gain from the disposal of investments, an accounting measure from when the company increased its stake in an associate. The adjusted pretax figures show a rise in profit of £56 per cent, jumping from £10.8 million to £16.8 million.
The firm’s consulting business continued to contribute heavily to its figures, recording £75 million in revenue for the 12 month period. That was up from £58.3 million a year earlier.
But its software business, a focus of investment for First Derivatives, jumped 69 per cent from £24. 9 million in 2015 to £42 million in 2016. The group said it saw a rising number of contract wins through the year, but still saw significant room for growth.
The company has been on the acquisition trail in recent months, buying big data consultancy QuantumKDB in January for £2.2 million, along with software development consultancy Affinity Systems in March 2015 for £7.7 million and financial software experts ActivateClients for £4.75 million.
The group also announced a deal last month with Thomson Reuters that would see First Derivatives’ Kx platform used to power the firm’s streaming analytics platform.
Chairman of First Derivatives Seamus Keating said it was another successful period for the group, noting its record results.
“ 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,” he said in a statement. “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.”
The firm is expecting another year of strong growth.
First Derivatives employs more than 1,600 people worldwide and counts many of the world’s top investment banks, brokers and hedge funds as its customers. The group, which provides trading and risk management software systems and consulting services to the capital markets industry, has operations in London, New York, Stockholm, Singapore, Hong Kong, Sydney, Toronto, Philadelphia, Dublin and its headquarters in Newry.
