TIDMFDP
RNS Number : 1858E
First Derivatives PLC
28 May 2012
First Derivatives plc
("First Derivatives" the "Company" or the "Group")
Final Results
First Derivatives (AIM: FDP.L, ESM:FDP.I), a leading provider of
software and consulting services to the capital markets industry,
today announces its results for the twelve months ended 29 February
2012.
Financial Highlights:
- Total revenue increased 25.4% to GBP46.1 million (2011: GBP36.7 million)
- Software license revenue increased 7.6% to GBP13.5 million
(2011: GBP12.5 million)
- Transactional and recurring revenue increased 102.2% to 44% of software revenues (2011: 23%)
- Consultancy revenue increased by 34.7% to GBP32.6 million
(2011: GBP24.2million)
- EBITDA increased 21.8% to GBP10.9 million (2011: GBP8.9 million)
- Normalised pre-tax profit increased by 25.0% to GBP7.3 million
(2011: GBP5.9 million) after adjusting for associate and currency
translation
- Pre-tax profit increased by 7.0% to GBP6.9 million (2011: GBP6.5 million)
- Normalised basic earnings per share increased by 31.1% to 37.5p per share (2011: 28.6p)
- Fully diluted earnings per share increased by 13.1% to 32.8p per share (2011: 29.0p)
- Final dividend of 8.15p per share, which together with interim
dividend of 3.0p amounts to 11.15p for the year (2011: 10.15p)
Business Highlights:
- Growing customer base with software and services being
provided to over 91 different investment banks, exchanges, brokers
and hedge funds
- New initiatives to position consulting divisions for global trends
- Launch of Capital Markets Legal services stream
- Launch of Vendor Managed Services
- Launch of Data Management Team
- New software releases to enhance "Big Data" and FX offerings
major wins achieved including Thomson Reuters, SGX, ANZ and Direct
FX
- Significant investment into staff, headcount at year end 662 (2011 year end: 524)
- Earnings visibility improving as revenue contribution from
transactional / recurring revenue increases
David Anderson, Chairman of First Derivatives commented:
"This year has seen continued strong growth across the Group's
activities with total revenues up over 25%. As the economic
recovery has been taking a fragile hold we have continued to make a
substantial investment in the development of all the group's
activities. The goal of this investment has been to ensure that we
build a robust organisation with a strong asset base and service
offering to ensure future growth. We expect the market in coming
years will continue to be challenging as the full effects of budget
constraints, regulation and globalisation continue to impinge our
customers. With the improvements made to the Delta suite and its
revenue stream and the positioning and improvements to our service
offerings, we feel that the group is well positioned to continue to
grow. We continue to have a strong pipeline of prospects and have
made a strong start to the current year and expect to be able to
report further progress in the year to 28 February 2013."
Enquiries:
First Derivatives plc +44(0)28 3025 2242
Brian Conlon, Chief Executive www.firstderivatives.com
Graham Ferguson, Chief Financial
Officer
Charles Stanley Securities
(Nominated Adviser) +44 (0)20 7149 6000
Russell Cook
Carl Holmes
Goodbody Corporate Finance
(EMI Adviser) +353 1 667 0420
Diane Hodgson
Linda Hickey
Walbrook PR +44 (0)20 7933 8780
Fiona Henson fiona@walbrookpr.com
Paul Cornelius paul@walbrookpr.com
Stakeholder Communications +44 (0) 2890 339949
John Hart
Jonathan King
About First Derivatives
First Derivatives is a global provider of software and
consulting services to the financial services industry. With almost
16 years experience working with leading financial institutions, it
continues to deliver technologically advanced products and services
that anticipate and respond to the evolving needs of global capital
markets.
First Derivatives currently employs around 700 people worldwide
and counts many of the world's top investment banks, brokers and
hedge funds as its customers. It has operations in London, New
York, Stockholm, Shanghai, Singapore, Toronto, Sydney, Dublin,
Newry and Hong Kong.
For further information please visit
www.firstderivatives.com
Chairman's Statement
I am pleased to report another year of continued growth in
profitability for the group, the sixteenth year of continued
progression. This achievement is all the more satisfying given the
market backdrop where we are seeing market trends that are
significantly altering the economics of the financial services
industry. In response to these market opportunities and building
upon prior years, we have continued to implement the Board's
strategy of continued investment into the group's technology,
infrastructure and operations in order to create a platform for
continued success and future growth. Our ability to generate
continued growth in this challenging market, while implementing our
investment growth strategy, demonstrates the strength of the
organisation.
Financials
Revenues for the year ended 29 February 2012 increased by 25.4%
to GBP46.087 million from GBP36.740 million in the previous year.
Normalised pre-tax profits (after adjusting for currency
translation and associate) increased by 25.0% to GBP7.315 million
compared to GBP5.852 million in 2011 reported pre-tax profits
increased by 7.0% to GBP6.947 million (2011: GBP6.495 million).
Normalised basic earnings fully diluted earnings per share
increased by 40.2% to 34.2p per share (2011: 24.4p).
Dividend
The group continues to generate strong operating cash flow and
this, along with our retained cash at the year end, allows the
Board to recommend a final dividend of 8.15p per share which
together with the interim dividend of 3.0p per share paid on 8
December 2011, totals 11.15p and is covered approximately three
times by earnings. This will be paid on 6 July 2012 to those
shareholders on the register on 8 June 2012. The shares will be
marked ex-dividend on 6 June 2012.
Software
Software sales at GBP13.458million (2011: GBP12.511 million)
were up 7.6% on the previous year. While this revenue stream
increased it does not reflect the progress made in revenue
generated from the Delta Suite. Transactional and recurring
revenues were up 102.2% on the previous year showing the
significant progress achieved. This was partly offset by a
reduction of 54.1% in one off license fee income and a reduction of
68.9% in technology income stream (Auto Deal+) obtained as part of
the acquisition of "Cognotec" in 2010.
The technical challenges are extensive in the capital markets
particularly when dealing with complex instruments on a global
scale. This complexity, in combination with continually increasing
data volumes and the subsequent IT processing requirements, create
many challenges for the industry. Our products are all developed on
the common Delta technology platform which is specifically
engineered to meet the complex calculations and large volume of
data issues that exist in the capital markets sector. We also have
made a significant investment in establishing the physical
infrastructure necessary to operate the software in the 'cloud' or
on a Software as a Service model ("SaaS") to meet the growing trend
and desire of our clients to operate this model. This allows
clients to seek economies of scale by outsourcing elements of their
infrastructure, while removing the need for internal expertise in
the support of the software. The investment in expanding this
capability enables many of our products to be sold under annual
license or transactional revenue based pricing models. Both models
allow us to secure a continued and visible stream of software
revenue.
Sales success has been achieved across all our key products in
the year with contract wins for our complex event processing
("CEP") engine (Delta Stream), algorithmic trading engine (Delta
Algo), data management engine (Delta Data Factory) and FX trading
platform (Delta Flow). As our customer base has expanded, our
opportunity to cross sell to our consulting and software clients
has been enhanced. At the year-end we concluded the sale of our
CEP, Algorithmic engine and FX platform to one customer and are in
further discussions with a number of other existing customers for
the provision of other products within our suite.
We have a healthy pipeline of prospects within our specific
domain and are actively looking for partners to help bring the
products to new markets and new industries. This continuing
investment in our platform, increasing the channels to market and
the successful deployment of our solutions, allied with our
flexible licensing and service model, gives us confidence in our
ability to deliver continued growth in software revenues.
Consulting
Consulting revenues increased 34.7% to GBP32.629 million from
GBP24.229 million in the previous year. It has been another year of
continued growth across the division, both in our client base,
expansion of the number of assignments undertaken with new and
existing customers and our penetration into the global market
place. The key to this continued growth continues to be the quality
of our people, our commitment to training and the quality and the
flexibility of our service.
Selling services to the market continued to be a challenge this
year with ongoing regulatory changes, continued globalisation
challenges, increasing complexity, fast moving technology
innovation and margin pressures affecting our customer base. To
meet the challenges facing our customers, we have continued to
invest in our service offerings, launching three major initiatives
in the period, in addition to the continual reinvestment and
refinement of our existing portfolio. We undertook a new legal
services initiative aimed at providing resources to banks in areas
such as non-core asset disposal, regulatory compliance and
securitisation, where personnel with a combination of IT, finance
and legal skills are in short supply. Secondly, we have launched a
strategic vendor service practice focused on the delivery of
global, large scale implementation and support services for leading
third party trading technology platforms. Finally we have formed a
dedicated data management team, bringing together a group of highly
experienced and respected professionals from the data management
industry. Market reaction has proven positive with a number of
engagements already underway and we expect that these new
initiatives combined with continued development of existing
services will have the company well positioned in the changing
market.
We undertake complex assignments for our clients and our
inherent knowledge of their systems leads to repeat business from
upgrades and ongoing development. This repeat recurring business
model is a key focus for us. We are able to achieve this by our
ability to ensure that our services are integrated into our
customers' strategy and operations assisting them to streamline
their services and products. We do this while ensuring we provide
the relevant market or domain expertise along with a competitive
cost operating model to ensure that we maximize the recurring
revenue stream.
Accommodation
No further acquisition of employee residential accommodation has
been made. Disposal of four individual properties was made in the
year with a resulting profit on sale of GBP528k. At year end three
properties were listed for sale with selling agents and have been
classified as such in the accounts. We will continue to dispose of
properties when suitable profitable opportunities arise. The
remaining properties held by the group have a carrying value of
GBP15.524 million and at the year-end were independently valued by
external valuers at GBP18.915 million on an open market basis.
Outlook
This year has seen continued strong growth across the Group's
activities with total revenues up over 25%. As the economic
recovery has been taking a fragile hold we have continued to make a
substantial investment in the development of all the group's
activities. The goal of this investment has been to ensure that we
build a robust organisation with a strong asset base and service
offering to ensure future growth. We expect the market in coming
years will continue to be challenging as the full effects of budget
constraints, regulation and globalisation continue to impinge our
customers. With the improvements made to the Delta suite and its
revenue stream and the positioning and improvements to our service
offerings, we feel that the group is well positioned to continue to
grow. We continue to have a strong pipeline of prospects and have
made a strong start to the current year and expect to be able to
report further progress in the year to 28 February 2013.
I would like to thank Brian Conlon and his team for making it
another successful year for the group.
David Anderson
Chairman
CHIEF EXECUTIVE'S STATEMENT
I am pleased to report that First Derivatives has had another
successful year, despite continuing uncertainty in the financial
markets resulting largely from the European sovereign debt crisis.
We have continued to expand and consider that we are well
positioned to continue to grow our operations and customer
base.
Review of activities
First Derivatives sells software products to the capital markets
and provides a range of associated consulting services. Our
customer base continues to grow and this year we provided services
to 91different investment banks, brokers, exchanges and hedge
funds. We continue to expand our global reach with assignments
underway in countries such as Chile, Russia, Hungary, Turkey and
South Africa as well as in major financial centres such as New
York, London, Toronto, Chicago, Singapore, Hong Kong, Tokyo and
Sydney.
The broad but yet focused nature of our product and consulting
offerings and our geographical spread is key to our continued
organic growth. Our target industry segment is extensive and gives
us a vast potential market to penetrate and our success has been
built on treating our customers as partners to build strong
recurring revenue streams both in consulting and software. In
consulting we target assignments that are vital to the customers'
infrastructure that will be in existence for years. We sell
software on a subscription model or on a Software as a Service
basis.
Software
We continue to invest heavily in improving our Delta technology
platform and applications. We have made significant scientific
progress in areas such as messaging and in-memory capacity. Our
Delta technology platform is designed to work with large volumes of
data analytics in the cloud on any desktop or handheld device.
Allied with our hosting and data centre expertise this means that
we are well placed to take advantage of the wider trends in the
technology market - Cloud computing, "Big Data" and mobile
devices.
We continue to add new features to our existing flagship
products and have successful reference implementations. Delta
Stream for example is now in use at several large financial
institutions including ANZ and Singapore Exchange and Delta Algo is
firmly embedded in one of the largest investment banks in the
world. We are very excited about the prospects for Delta Data
Factory which has been successfully deployed by Thomson Reuters.
The sales pipeline is very healthy and we are cautiously optimistic
for the year ahead.
We have successfully migrated RealStream - an acquired legacy
technology - to our architecture and relaunched this as Delta Flow.
We believe that this product has the potential to be a disruptive
technology in the FX trading arena. It is a hosted technology and
we have mobile (iPhone, iPad and Android) and desktop versions.
This view has been further reinforced during recent preliminary
demos with a number of leading players in the market and our order
book for this product is very encouraging. Indeed we have recently
signed up one of the biggest banks in Asia and one of the biggest
brokers in Russia.
Although our software revenue has only grown by a small amount
in total relative to 2011 the mix has changed considerably. As
expected there has been a tapering off of revenue from a legacy
technology Auto Deal+, with recurring transactional revenue now
accounting for 44% of our software revenue (2011: 23%). We will
continue to endeavour to sell our software on an annual recurring
or transactional model.
Our common technology platform makes it easier to develop new
products and bring them quickly to market. In addition, the
problems at which we excel - analysing large volumes of data in
millisecond periods of time - are issues which are common to many
industry sectors. The success of our technology in the capital
markets industry should make it easier to sell in other areas. We
have had some success in this respect and I am pleased to report
that we have secured our first customers of Delta in the telecoms
and utilities markets. We have launched a new prototype of a
bandwidth exchange (in partnership with BT and Nokia at the recent
TM Forum) and are launching an alpha version of a carbon credits
trading platform at the Rio+ Earth Summit in June this year. This
follows the success of an initial prototype at the recent Clinton
Global Initiative in New York. This gives further validation as to
the flexibility of our technology and gives us confidence that the
market for our software is extensive.
We have further cemented our relationship with Kx Systems by
recently signing an OEM and hosting agreement which gives us
increased access to the kdb+ database for all products in a hosted
or installed basis. We have been working with Kx Systems for 14
years and they had another profitable year last year. As a 20%
shareholder we will continue to benefit from their success and
continued investment in making their technology the world's leading
time series database. Their products are used by some of the
world's largest financial institutions and Kx Systems lists
organisations such as JP Morgan, Goldman Sachs, Zurich Financial
Group, Morgan Stanley, Fidelity Investments and Total Gas &
Power.
Consulting
First Derivatives provides highly skilled resources to the
capital markets in the areas of consulting, support and development
services. We have ongoing contracts with many of the leading global
banks, supporting their activities across a range of asset classes
including credit, interest rate, foreign exchange, equity cash and
derivatives markets. The Company has been working in this area for
sixteen years and we have seen a trend in the last year for us to
work on increasingly large projects. The major trends in the
industry at the moment are around outsourcing and trying to
implement various regulatory initiatives introduced throughout the
world as a response to the global crisis in 2008. We have launched
three major initiatives to respond to these trends:-
-- A legal stream offering services around the disposal of non-core assets by banks and the impact of
regulations and compliance
-- A managed services for outsourced third party product support and
-- The creation of a dedicated data management team.
The market has responded positively to these initiatives and we
have been able to draw upon the strength of our brand to win new
customers in these areas. We continue to derive significant
recurring revenue in this division from the long-term nature of the
projects we undertake and these three new initiatives will also
generate long-term work.
Our consultants continue to work closely with our development
team by providing market intelligence and competitor analysis. They
can also assist the product team with business analyst work and
testing. The fungible nature of our resource pool gives us
significant operational efficiencies.
Management and Personnel
The Company now employs almost 700 people and our success in
retaining staff and senior management means that the experience
profile of our consultants continues to improve. We continue to
enhance our Capital Markets Training Programme and have now
included legal stream modules which gives employees the opportunity
to qualify for the New York Bar. Once again I would like to pay
tribute to all First Derivatives employees who are hard working,
talented, flexible and dedicated. Our customer retention rates are
evidence of this.
Financial Review
The group has reported revenues and profits significantly higher
than last year. Post-tax profit for the year was GBP5.946 million
(2011: GBP5.112 million) on turnover of GBP46.087 million (2010:
GBP36.740 million). Our balance sheet is strong with equity
attributable to shareholders up to GBP32.236 million (2011:
GBP24.888 million), an increase of 29.5%. This, and our confidence
in the Group's ability to generate cash, enables the Board to
recommend a final dividend of 8.15p per share (2011: 7.25p) which
means that we will have paid a total dividend of 11.15p (2011:
10.15p) per share for the full year.
Outlook
Based on the health of our current sales pipeline we anticipate
reporting further growth in the year to 28 February 2013. As well
as organic growth the Board will continue to pursue acquisition
opportunities where we see a strategic fit and have access to the
necessary sources of finance. On a macro level we are confident
that we have positioned ourselves to benefit from global trends in
technology and consulting and that with our recurring revenue model
and continued reinvestment in the business we will deliver further
significant benefits in the years ahead.
Brian Conlon
Chief Executive Officer
Consolidated statement of comprehensive income
Year ended 29 February 2012
2012 2011
Note GBP'000 GBP'000
Continuing operations
Revenue 2 46,087 36,740
Cost of sales (30,172) (23,423)
Gross profit 15,915 13,317
Other operating income 1,414 1,974
Administrative expenses (9,368) (8,723)
Results from operating activities 7,961 6,568
Finance income 2 7
Finance expense (648) (723)
Loss on foreign currency translation (455) (198)
--------- ---------
Net financing expense (1,101) (914)
Share of profit of associate using the
equity method, net of tax 458 841
Share of loss on dilution in associate
using the equity method (371) -
Profit before income tax 6,947 6,495
Tax expense (1,001) (1,383)
--------- ---------
Profit for the year 5,946 5,112
========= =========
Other comprehensive income
Deferred tax on share options outstanding (309) 1,030
Net exchange gains/(losses) on net investment
in foreign subsidiaries and associate 214 (1,091)
Net (loss)/gain on hedge of net investment
in foreign subsidiaries and associate (121) 594
--------- ---------
Other comprehensive income for the period,
net of tax (216) 533
--------- ---------
Total comprehensive income for the period
attributable to equity holders' of the
company 5,730 5,645
========= =========
Earnings per share Pence Pence
Basic 4 36.0 33.2
Diluted 4 32.8 29.0
========= =========
Consolidated balance sheet
Year ended 29 February 2012
2012 2011
Note GBP'000 GBP'000
Assets
Property, plant and equipment 5 14,738 18,292
Intangible assets and goodwill 6 30,053 26,732
Investment in associate 7,059 7,447
Trade and other receivables 437 -
Deferred tax asset 1,750 1,860
-------- --------
Non current assets 54,037 54,331
-------- --------
Trade and other receivables 13,767 12,563
Cash and cash equivalents 1,318 3,501
Assets held for sale 1,598 -
-------- --------
Current assets 16,683 16,064
Total assets 70,720 70,395
======== ========
Equity
Share capital 83 80
Share premium 10,502 7,846
Share option reserve 2,673 2,384
Revaluation reserve 167 174
Currency translation adjustment
reserve 290 197
Retained earnings 18,521 14,207
-------- --------
Equity attributable to shareholders 32,236 24,888
======== ========
Liabilities
Loans and borrowings 18,598 21,544
Deferred tax liabilities 2,224 1,319
Contingent deferred consideration - 1,993
Provisions - 344
Trade and other payables 2,901 2,034
Non-current liabilities 23,723 27,234
Loans and borrowings 3,603 1,124
Trade and other payables 7,456 7,955
Current tax payable 702 1,176
Employee benefits 2,110 2,401
Contingent deferred consideration 890 5,617
-------- --------
Current liabilities 14,761 18,273
Total liabilities 38,484 45,507
-------- --------
Total equity and liabilities 70,720 70,395
======== ========
Consolidated statement of changes in equity
Year ended 29 February 2012
Share Share premium Share option Revaluation Currency Retained Total equity
capital reserve reserve translation earnings
GBP000 adjustment
GBP000 GBP000 GBP000 GBP000 GBP000
GBP000
Balance at 1 March 2011 80 7,846 2,384 174 197 14,207 24,888
-------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive income
for the year
Profit for the year - - - - - 5,946 5,946
Other comprehensive income
Deferred tax on share
options
outstanding - - (309) - - - (309)
Change in effective rate
of deferred tax - - - 5 - (5)
Net exchange gains on net
investment in foreign
subsidiaries
and associate - - - - 214 - 214
Net exchange loss on hedge
of net investment in
foreign
subsidiaries and associate - - - - (121) - (121)
Transfer on dilution of
investment
in associate - - - (12) - 12 -
-------- ------------- ------------ ----------- ------------ --------- ------------
Total other comprehensive
income - - (309) (7) 93 7 (216)
-------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive income
for the year - - (309) (7) 93 5,953 5,730
Transactions with owners,
recorded directly in equity
Exercise of share options 1 442 (83) - - - 360
Issue of shares as purchase
consideration 2 2,214 - - - - 2,216
Share based payment charge - - 725 - - - 725
Transfer on forfeit of
share
options - - (44) - - 44 -
Dividends to equity holders - - - - - (1,683) (1,683)
-------- ------------- ------------ ----------- ------------ --------- ------------
Total contributions by and
distributions to owners 3 2,656 598 - - (1,639) 1,618
-------- ------------- ------------ ----------- ------------ --------- ------------
Balance at 29 February 2012 83 10,502 2,673 167 290 18,521 32,236
======== ============= ============ =========== ============ ========= ============
Consolidated cash flow statement
Year ended 29 February 2012
2012 2011
GBP'000 GBP'000
Cashflows from operating activities
Profit for the year 5,946 5,112
Adjustments for:
Net finance costs 1,101 914
Share of profit of associate (458) (841)
Share of loss on dilution in associate 371 -
Provision release (266) -
Depreciation 592 475
Amortisation of intangible assets 1,821 1,532
Gain on sale of property, plant & (528) -
equipment
Equity settled share-based payment
transactions 486 340
Tax expense 1,001 1,383
10,066 8,915
Changes in:
Trade and other receivables (1,331) (2,711)
Trade and other payables 196 880
Onerous provisions (78) (301)
Taxes paid (699) (1,422)
-------- ---------
Net cash from operating activities 8,154 5,361
Cash flows from investing activities
Interest received 2 7
Acquisition of subsidiaries, net
of cash acquired - (585)
Acquisition of property, plant and
equipment (866) (842)
Disposal of property, plant and equipment 2,705 -
Acquisition of intangible assets (4,636) (3,477)
Dividend received from associate 570 654
Payment of deferred consideration (3,316) (1,795)
-------- ---------
Net cash used in investing activities (5,541) (6,038)
Cash flows from financing activities
Proceeds from issue of share capital 360 3,579
Receipt of new long term loan 1,553 19,878
Repayment of borrowings (3,602) (19,426)
Payment of finance lease liabilities (26) (66)
Interest paid (767) (537)
Dividends paid (1,683) (1,435)
-------- ---------
Net cash from financing activities (4,165) 1,993
Net (decrease) / increase in cash
and cash equivalents (1,552) 1,316
Cash and cash equivalents at 1 March
2011 3,501 1,711
Effects of exchange rate changes
on cash held (631) 474
-------- ---------
Cash and cash equivalents at 29 February
2012 1,318 3,501
======== =========
Notes
1 Basis of preparation
The consolidated financial statements consolidate those of the
Company and its subsidiaries (together referred to as the
"Group").
Both the consolidated financial statements and the Company
financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting
Standards as adopted by the EU ("IFRSs").
2 Operating segments
Business segments
The group has disclosed below certain information on its revenue
by geographical location. Details regarding total can be found in
the statement of comprehensive income.
The group's two revenue streams are separated as follows:
-- Consulting activities which includes services to capital markets; and
-- Software activities which includes the sale of intellectual property and related services.
Revenue by division
Consulting Software Total
2012 2011 2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total Segment
Revenue 32,629 24,229 13,458 12,511 46,087 36,740
--------- --------- --------- --------- ----------- -----------
Geographical location analysis
UK Rest of America Australasia Total
Europe
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
from
external
customers 18,387 15,811 3,795 2,627 18,969 14,812 4,936 3,490 46,087 36,740
Non Current
Assets 20,873 22,376 8,655 5,930 22,727 24,333 1,782 1,692 54,037 54,331
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
3 Dividends
2012 2011
GBP'000 GBP'000
Final dividend relating to the prior year 1,187 976
Interim dividend paid 496 459
------- -------
1,683 1,435
======= =======
The dividends recorded in each financial year represent the
final dividend of the preceding financial year and the interim
dividend of the current financial year.
The final dividend relating to the prior year amounted to 7.25
(previous year: 6.75) pence per share and the interim dividend paid
during the year amounted to 3.00 (previous year: 2.90) pence per
share. The cumulative dividend paid during the year amounted to
10.25 (previous year: 9.65) pence per share.
After the respective reporting dates, the following dividends
were proposed by the directors. The dividends have not been
provided for and there are no income tax consequences.
2012 2011
GBP'000 GBP'000
8.15 pence per ordinary share (2011: 7.25
pence) 1,370 1,185
======= =======
4 (a) Earnings per ordinary share
Basic
The calculation of basic earnings per share at 29 February 2012
was based on the profit attributable to ordinary shareholders of
GBP5,946k (2011: GBP5,112k), and a weighted average number of
ordinary shares ranking for dividend of 16,510k (2011:
15,415k).
2012 2011
Pence per Pence per
share share
Basic earnings per share 36.0 33.2
========= =========
Weighted average number of ordinary shares
2012 2011
Number '000 Number '000
Issued ordinary shares at beginning of period 15,924 14,421
Effect of share options exercised 170 132
Effect of shares issued as purchase consideration 416 46
Effect of shares issued for cash - 816
Weighted average number of ordinary shares
at end of period 16,510 15,415
=========== ===========
Diluted
The calculation of diluted earnings per share at 29 February
2012 was based on the profit attributable to ordinary shareholders
of GBP5,946k (2011: GBP5,112k) and a weighted average number of
ordinary shares after adjustment for the effects of all dilutive
potential ordinary shares of 18,128k (2011: 17,606k).
2012 2011
Pence Pence
per share per share
Diluted earnings per share 32.8 29.0
========== ==========
Weighted average number of ordinary shares (diluted)
2012 2011
Number Number
'000 '000
Weighted average number of ordinary shares
(basic) 16,510 15,415
Effect of dilutive share options in issue 1,618 2,191
Weighted average number of ordinary shares
(diluted) at end of period 18,128 17,606
======= =======
The average market value of the group's shares for purposes of
calculating the dilutive effect of share options was based on
quoted market prices for the period the options were
outstanding.
At 29 February 2012, 600k options (2011: 315k) were excluded
from the diluted weighted average number of ordinary shares
calculation as their effect would have been anti-dilutive.
b) Earnings before tax per ordinary share
Earnings before tax per share are based on profit before
taxation of GBP6,947k (2011: GBP6,495k). The number of shares used
in this calculation is consistent with note 4(a) above.
2012 2011
Pence per Pence per
share share
Basic earnings before tax per ordinary share 42.1 42.1
Diluted earnings before tax per ordinary
share 38.3 36.9
========= =========
Reconciliation from earnings per ordinary share to earnings
before tax per ordinary share.
2012 2011
Pence per Pence per
share share
Basic earnings per share 36.0 33.2
Impact of taxation charge 6.1 8.9
--------- ---------
Adjusted basic earnings before tax per share 42.1 42.1
========= =========
Diluted earnings per share 32.8 29.0
Impact of taxation charge 5.5 7.9
--------- ---------
Adjusted diluted earnings before tax per
share 38.3 36.9
========= =========
Earnings before tax per share has been presented to facilitate
pre-tax comparison returns on comparable investments.
(c) Normalised earnings after tax per ordinary share
Normalised earnings after tax per share are based on profit
after taxation of GBP6,195k (2011: GBP4,415k). The adjusted profit
after tax has been calculated by adjusting for the Group's share of
loss on dilution of investment in associate GBP371k (2011: nil),
share of profit of associate GBP458k (2011: GBP841k) and loss on
foreign currency translation after tax effect GBP336k (2011:
GBP143k). The number of shares used in this calculation is
consistent with note 4 (a) above.
2012 2011
Pence per Pence per
share share
Basic earnings after tax per ordinary share 37.5 28.6
Diluted earnings after tax per ordinary
share 34.2 24.4
========= =========
5 Property, plant and equipment
Land and Plant and Office Total
buildings equipment furniture
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2011 18,592 1,143 127 19,862
Additions 320 545 1 866
Disposals (2,352) - - (2,352)
Reclassification
to assets held
for sale (1,734) - - (1,734)
Exchange adjustments 29 - - 29
----------- ----------- ----------- ---------
At 29 February
2012 14,855 1,688 128 16,671
----------- ----------- ----------- ---------
Depreciation
At 1 March 2011 922 587 61 1,570
Charge for the
year 242 326 24 592
Disposals (99) - - (99)
Reclassification
to assets held
for sale (136) - - (136)
Exchange adjustments - 6 - 6
----------- ----------- ----------- ---------
At 29 February
2012 929 919 85 1,933
----------- ----------- ----------- ---------
Net book value
At 29 February
2012 13,926 769 43 14,738
=========== =========== =========== =========
Land and Plant and Office Total
buildings equipment furniture
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2010 18,296 696 72 19,064
Additions 297 489 56 842
Exchange adjustments (1) (42) (1) (44)
----------- ----------- ----------- ---------
At 28 February
2011 18,592 1,143 127 19,862
----------- ----------- ----------- ---------
Depreciation
At 1 March 2010 696 385 45 1,126
Charge for the
year 227 232 16 475
Exchange adjustments (1) (30) - (31)
At 28 February
2011 922 587 61 1,570
----------- ----------- ----------- ---------
Net book value
At 1 March 2010 17,600 311 27 17,938
=========== =========== =========== =========
At 28 February
2011 17,670 556 66 18,292
=========== =========== =========== =========
6 Intangible assets
Goodwill Customer Acquired Brand name Internally Total
lists Software developed
software
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1
March 2011 13,941 2,327 7,252 302 6,168 29,990
Development costs - - - - 4,819 4,819
Additions - - 1,340 - - 1,340
Adjustment to
deferred consideration (1,354) - - - - (1,354)
Exchange adjustments 303 35 53 2 (36) 357
--------- --------- ---------- ----------- ----------- ---------
Balance at 29
February 2012 12,890 2,362 8,645 304 10,951 35,152
--------- --------- ---------- ----------- ----------- ---------
Amortisation
and impairment
losses
Balance at 1
March 2011 - 617 1,424 65 1,152 3,258
Exchange adjustment - 14 6 4 (4) 20
Amortisation
for the year - 293 1,003 38 487 1,821
--------- --------- ---------- ----------- ----------- ---------
Balance at 29
February 2012 - 924 2,433 107 1,635 5,099
--------- --------- ---------- ----------- ----------- ---------
Carrying amounts
At 29 February
2012 12,890 1,438 6,212 197 9,316 30,053
========= ========= ========== =========== =========== =========
Goodwill Customer Acquired Brand Internally Total
lists Software name developed
software
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 March
2010 11,427 2,039 7,590 300 2,701 24,057
Development costs - - - - 3,475 3,475
Additions - - 2 - - 2
Adjustment to
deferred consideration 2,302 - - - - 2,302
Acquisition through
business combinations 690 401 - 18 - 1,109
Exchange adjustments (478) (113) (340) (16) (8) (955)
-------- -------- --------- ------- ---------- -------
Balance at 28
February 2011 13,941 2,327 7,252 302 6,168 29,990
-------- -------- --------- ------- ---------- -------
Amortisation and
impairment losses
Balance at 1 March
2010 - 372 447 30 930 1,779
Exchange adjustment - (30) (21) (2) - (53)
Amortisation for
the year - 275 998 37 222 1,532
-------- -------- --------- ------- ---------- -------
Balance at 28
February 2011 - 617 1,424 65 1,152 3,258
-------- -------- --------- ------- ---------- -------
Carrying amounts
At 1 March 2010 11,427 1,667 7,143 270 1,771 22,278
======== ======== ========= ======= ========== =======
At 28 February
2011 13,941 1,710 5,828 237 5,016 26,732
======== ======== ========= ======= ========== =======
7 Report and accounts
Copies of the Annual Report will be available as of 7 June 2012
on the Group's website, www.firstderivatives.com and from the
Group's headquarters at 3 Canal Quay, Newry, BT35 2BP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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