Irish fintech Fenergo swung to profit as the company’s previous investment in its technology helped cut its costs and make it more efficient.
Accounts for the financial year ended March 31st, 2024, showed a profit before tax of €12.4 million. That compared with a loss of €5.65 million in the previous year.
Revenue was €139 million, up 0.7 per cent from €137.9 million a year earlier. The reduction in costs had more impact, however, with the cost of sales falling to €31.5 million from €51.4 million a year earlier, a 39 per cent reduction.
“Our ability, our cost to serve, has reduced with the new technology, so it takes us less effort and we’re delivering almost double the benefits to the customer base,” said chief executive Marc Murphy.
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“That’s all down to the R&D investment we’ve made in the product here in Ireland. Making those investments has allowed us make the business more efficient.”
Fenergo develops software for financial institutions that helps them with issues such as regulatory compliance and managing client data. Its customers include 300 of the largest banks and insurers in the world, including ABN Amro, Aviva, Bank of China, Danske Bank, Credit Suisse, UBS, Santander and State Street.
The company said software licence growth was 20 per cent for the year. Asset-management and asset-servicing revenue rose 19 per cent year on year, while banking revenue was 16 per cent higher.
Over the year, the company won 43 new client bookings, including asset-management firms, energy and commodities providers and banks.
[ Fenergo reverses losses to post operating profit of €900,000Opens in new window ]
Its European business remains its strongest market at present, but the United States showed good growth during the year, with Asia Pacific also showing strength following the company’s investment in its go-to-market strategy in recent years.
“The majority of our income is all overseas,” Mr Murphy said. “It’s a truly global business out of Dublin. We’re a great example of how that can be done.”
Fenergo currently employs about 750 people, with about 450 of those jobs based in Ireland. Staff costs for the last financial year, based on 620 staff, were €85.5 million, up from just under €79 million a year earlier.
Looking at the current financial year, Mr Murphy said all indicators were positive, with strong profitability and growth in the first three quarters of the year. Demand for the company’s solutions was continuing to rise, he said, fuelled by regulatory requirements, cost pressures and transformation and digital experience. Fenergo is focusing on integrating artificial intelligence, robotic process automation and natural and large language processing into its products.
It is also turning its attention to commercial banks, following its success serving the top 250 financial institutions in the world.
“We’ve made the product more consumable by some of the smaller banks. That’s what we’d be going after next year,” Mr Murphy said.
“We’ve also had good success on the asset management and asset servicing side,” he said, adding that the addressable market for its services was “huge”.
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