BELFAST BRIEFING:A Newry-based firm believes the turbulence in world markets could be a major opportunity, writes Francess McDonnell

THERE ARE few companies in Northern Ireland which believe the economic downturn could in fact deliver an upturn for their business.

But there is one for it, and it is determined to make the downturn work in its favour.

The Co Down company, which was set up 12 years ago, is better placed than most to understand how the deepening crisis is affecting financial markets across the globe.

It operates close to the heart of these markets by providing specialist products and services to leading international financial institutions.

First Derivatives, which is listed on both London's Alternative Investment Market and the Irish Stock Exchange, creates financial software and provides specialist consulting services.

It operates primarily in the capital markets technology sector and lists clients in a number of top-tier banks and hedge funds throughout Europe, including Ireland and the UK, the United States and Singapore.

Michael O'Neill, the company's chief operating officer, says First Derivatives has set itself ambitious targets and the growing trend among financial institutions to cut costs could be a major boost for the Newry firm.

"We can help organisations cuts costs. It is a very difficult market at the moment but I believe that if we can show customers than they can reduce costs by outsourcing some of their support systems to us then we will continue to grow our business.

"We were growing our business before the global financial crisis struck, but what it does is give us the opportunity to highlight our services and our products to financial institutions.

"Some of [these] may be looking at ways to restructure - whether it is by cutting costs or investing in products which provide real-time market information," O'Neill said.

The Newry company, which employs 145 people, believes that the volatility on stock markets and the continuing financial uncertainty may prove to be an opening for it to showcase new and existing products.

Graham Ferguson, First Derivatives' chief finance officer said: "There is a huge amount of information and data being generated and one of the challenges for management and staff is to deal with these volumes in a timely manner - more organisations are looking at real-time trading systems - and that is one just one of the areas which we specialise in.

"In the last number of years we have been steadily building up our expertise, our reputation and our staff - long before the financial crisis hit - and we believe we are now well positioned to grow our core business despite the very difficult market place."

Ferguson says one of the company's key strengths is its roots - its founder and largest shareholder Brian Conlon is from Newry, which is why the company was initially located in the city.

"Our core ethos is the fact that we have grown our business with Irish people - we have obviously recruited globally and although we operate globally we have remained very committed to what being an all-Ireland, Newry-based company means to us and the support we receive here."

Although First Derivatives may enjoy being something of a local hero in Co Down, that is not going to stop the company from setting its sights firmly on international success.

Latest financial results posted earlier this month show that First Derivatives enjoyed a 21 per cent jump in both pretax profit and turnover in the six months to August 2008.

The company reported pretax profits of some £2.2 million (€2.8 million) on a turnover of £6.8 million in the period under review.

The results also highlighted a healthy balance sheet with operating cashflow of £3.3 million in the first six months of 2008 and retained cash of £1.3 million.

First Derivatives' net assets now stand at £8.9 million.

According to its senior management team, this positions the Newry company very nicely to pursue any future potential acquisitions that may come its way.

Last month it bought an American technology marketing firm in a cash-and-shares deal which could be worth more than £11 million.

First Derivatives will pay an initial cash sum of £2.5 million for Philadelphia-based Market Resource Partners.

The Northern Ireland company believes Market Resource Partners will be instrumental in helping it expand its presence in the American marketplace, which it believes will be a huge opportunity for it in the future.

First Derivatives' new American subsidiary has just won two new contracts from two US-based technology companies worth a total of €4.4 million, which First Derivatives hopes is a sign of things to come.

First Derivatives is one of the North's three remaining listed companies - Andor Technology and UTV Media Group are the others.

It operates in an increasingly challenging market where life is changing every day for its key clients.

But what makes this Newry company stand apart from some in Northern Ireland is that it sees these troubled times as an opportunity to grow its business - not to retreat.

In the process it may help grow the North's economy and create new jobs for the people who live there.