First Derivatives hails strong performance outside of fintech space

Newry-based software firm First Derivatives continued to see strong growth last year as it expanded its services and grew its markets.

Revenue jumped 23 per cent across the group to £186 million (€212 million) in the 12 months to end-February 2018 though pretax profit was 3 per cent lower at £12.1 million.

First Derivatives, which is listed on both the London and Irish stock exchanges, recently signed a deal with Red Bull Racing to supply its Kx technology to the Formula 1 team.

The group’s primary focus since it was established in 1996 has been capital markets, where it provides trading and risk management software systems and consulting services to many of the world’s top investment banks, brokers and hedge funds.

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However, the AIM-listed group, whose customers include AIB, Bank of America Merrill Lynch, HSBC and Goldman Sachs, has increasingly been working to break into other sectors. In addition to the Red Bull Racing deal, the company has also signed up a leading Fortune 100 gaming company, one of the world’s biggest semiconductor suppliers and Airbus defence and space unit.

Much of the new contract wins are on the back of Kx data analysis software.

Chief executive Brian Conlon said, “2017 was a very satisfying year, with all our key metrics up 20 per cent or more. Over the last five years we’ve achieved compound average growth of around 25-30 per cent and there aren’t many tech companies that can say that.”

The company said adjusted earnings before interest, tax, depreciation and amortisation rose 19 per cent year-on-year to £34.1 million.

Software revenue increased 27 per cent over the year while turnover from managed services and consulting activities was up 17 per cent.

The company said fintech-related revenues rose 22 per cent last year to £142.9 million, driven by growth in recurring software revenue and an expansion of services provided to clients. Marketing tech results jumped 24 per cent to £38.2 million on the back of growth in subscriptions to the company’s marketing cloud platform.

The company announced a 20 per cent rise in its full-year dividend to 24 pence per share. The shares closed down a fraction at 4260p in London.

First Derivatives, which employs more than 2,000 people globally, said it continued to invest in machine learning and AI initiatives last year. It also boosted its telco capabilities through the acquisition of the Spanish company Telconomics, which it acquired for up to €2.5 million in December.