First Derivatives to accelerate strategy as earnings slide

First Derivatives reported revenue of £237.9m in its full-year results on Tuesday, broadly in line with the £237.8m it recorded in the prior financial year.

The AIM-traded firm said its gross profit was also level year-on-year, at £101m for the 12 months ended 28 February, compared with £101.1m in the 2020 year.

Profit before tax fell 39% to £11.1m, while reported diluted earnings per share were down 41% at 32p.

Net debt narrowed by 80% over the course of the year, to £9.9m.

The board declared nil dividend for the 2021 financial year, compared to the 8.5p per share distribution for the prior period.

“Following a detailed review by the board, informed by growing market opportunities resulting from the increasing capabilities of our technology, we have concluded that now is the time for targeted investment that will accelerate our growth and establish KX as a world-leading horizontal technology for real-time streaming analytics,” said chairman Donna Troy.

“We are excited to announce this acceleration of our strategy and look forward to delivering enhanced value for our customers and shareholders.”

First Derivatives’ board issued guidance for the current financial year, which it said reflected improved momentum across the company’s business units, as well as the cost impact of the investment to accelerate growth.

It said it was expecting revenue for the year to be in the range of £255m to £260m, with adjusted EBITDA of between £31m and £33m.

“Using streaming analytics to inform and automate operational decisions is one of the most important growth areas in technology today, and KX enables this for our customers,” said chief executive officer Seamus Keating.

“During the past year we have positioned the business to scale rapidly to address this opportunity, by accelerating our technology roadmap, strengthening our leadership, developing our commercial strategy and putting in place enhanced systems and processes to scale the group.

“By increasing our investment in the business we unlock the potential for rapid growth and for KX to become a key part of tomorrow's technology ecosystem.”

At 1011 BST, shares in First Derivatives were down 12.16% at 2,240p.