First Derivatives sees revenues rise but company remains cautious

Newry-headquartered technology company First Derivatives (FD) said revenue rose 9 per cent, as the company’s latest annual results showed solid growth.

Revenue for its financial year ended February 29th 2020 was £237.8 million (€266.6 million), with gross profit up 11 per cent to £101.1 million.

Adjusted earnings were £45.5 million for the year, a 17 per cent rise, with pretax profit at £18.3 million.

Software revenue was 13 per cent higher at £148.4 million, supported by 23 per cent growth in recurring software licence revenue.

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FD also saw significant contract wins in its core fintech market, with partner agreements signed in its automotive, manufacturing and energy target markets. Separately, the company announced a global Kx partnership agreement with Tata Consultancy Services .

FD previously said it expected its financial performance for the year ended February 29th, 2020 would be in line with expectations, despite the outbreak of coronavirus.

Chief executive Seamus Keating said it had been a difficult year but morale across the business was quite good.

“Some customers have got enormous increases in volumes in their systems and they eeded more software and more people from us to cope with it,” he said. “I think it’s a great testament to the benefits of the technology that we own, and the skills and motivations of the people who work with it for our customers.”

FD said it had taken a number of measures to ensure the group’s liquidity and to protect the business, including halting business travel and suspending bonus payments to executive directors. It did not recommend a dividend for the year. It implemented its pandemic plan at the beginning of February, with remote working and other measures introduced to ensure there was no significant disruption to the business.

Mr Keating said there were opportunities beginning to emerge for FD from the current crisis, as more people were working remotely, particularly in process automation.

"The past year has been one of the most significant in the group's history, having to cope with the sudden loss of our founder and CEO, Brian Conlon, and then the challenges posed by Covid-19. I am proud of the way our business has pulled together to address these challenges, working as one to support our customers and position ourselves for the next stage of our growth journey," said Donna Troy, chairwoman of FD.

“Against that backdrop, these results represent a period of solid execution. In the short term, while it is still too early to determine the impact of covid-19, the group has acted to protect the health and wellbeing of employees, to support the business-critical operations of our customers and to ensure our ongoing financial liquidity.”