Half-year profits at Norkom up 29% to €14.8m

THE FINANCIAL software maker Norkom reported a strong set of half-year numbers yesterday, despite the impact of forced marriages between global banks and currency translation woes on its business.

The Irish listed company said it would ultimately benefit from the credit crisis, as global regulators move to tighten their supervision of financial institutions.

Norkom announced a 37 per cent increase in revenues and a 30 per cent increase in earnings before interest, tax and write-offs for the six months to the end of September.

Norkom chief executive Paul Kerley said the company's short-term growth trajectory had been affected by "disruptive merger and demerger activity" among financial institutions in recent months.

But in the long-term, Norkom said the credit crisis would work in its favour, as moves to make anti-fraud procedures are made mandatory rather than discretionary.

Mr Kerley cited figures suggesting that 50 per cent of financial institutions have a multi-year strategy plan on financial crime.

"That's the sweet spot," he said.

Instead of adopting separate procedures for credit card fraud, deposit fraud, cheque fraud and so on, financial institutions would increasingly look to independent companies to provide anti-fraud technology in order to reduce their compliance costs, he said.

During the half-year to the end of September, Norkom increased its gross profits by 29 per cent to €14.8 million, although there was a similar rise in operating costs. Net income rose 8 per cent to almost €2.2 million. Norkom's balance sheet "remains in rude financial health", said NCB analyst Paraic Quinn.

During the six-month period, the company formed a partnership with IBM to provide new compliance software to banks; grew its fledgling business in Australia by 250 per cent and broke into the Middle East financial services market.