First Derivatives ticks all the boxes

UK-based software and consultancy services firm First Derivatives saw its revenue grow by 21% in the first half of its trading year, led by strong growth in its software wing and heightened demand for its managed services and consulting solutions.

Revenue in the six months leading to 31 August came in at £87.8m compared to the £72.4m a year earlier as FD's software revenue increased an impressive 32% to £52.2m, with recurring revenue accounting for £19.6m of that figure,itself marking a 44% increase.

FinTech revenue was up 18% to £66.8m thanks to a 32% increase in the firm's recurring software sales from within its global banking client base.

After hiring 386 graduates in the 2016 calendar year, and announcing on Monday that it had signed a deal with Red Bull Racing for the use of its Kx technology to analyse data from the latter's F1 vehicles, FD said it was confident of its "strong pipeline and positive start" to the second half of the financial year.

Adjusted EBITDA and fully diluted EPS were both up 19% over the period to £16.1m and 34.4p, respectively.

However, despite all the positive news, adjusted pre-tax profits fell 10% to £6.3m in the first half due to foreign currency translation losses and deferred consideration coming from prior acquisitions.

Seamus Keating, chairman of FD, said, "Through our conversations with existing and potential customers and partners, we remain convinced that demand for ultra-high performance analytics capability will continue to grow and that Kx technology leads this market in terms of its performance and lower total cost of ownership.

"Our managed services and consulting activities are also in high demand and we are addressing this through record levels of recruitment of high-calibre graduates. We have signed a number of high value contracts in the first half and there is momentum behind our commercial discussions across the group," he added.

As of 1300 GMT, shares had gained 0.31% to 3,540.00p.