TIDMFDP
RNS Number : 8694O
First Derivatives PLC
02 June 2015
2 June 2015
First Derivatives plc
("FD", the "Company" or the "Group")
Preliminary results for the year ended 28 February 2015
FD (AIM:FDP.L, ESM:FDP.I), a leading provider of software and
consulting services, today announces its results for the year ended
28 February 2015.
Financial Highlights
- Revenue GBP83.2m (2014: GBP69.9m) +19%
- Adjusted EBITDA GBP15.5m (2014: GBP12.5m) +24%
- Profit before tax GBP17.5m (2014: GBP7.9m) +120%
- Adjusted* profit before tax GBP10.8m (2014: GBP9.2m) +17%
- Adjusted* fully diluted EPS 38.8p (2014: 34.2p) +13%
- Full year dividend 13.5p per share (2014: 12.2p) +11%
- Net debt GBP15.7m (2014: GBP11.2m)
*Adjusted for amortisation of acquired intangibles, share based
payments, profit on disposal of property, net gain on disposal of
investment in associate, acquisition costs, finance translation
income/charges (and associated taxation impact for EPS).
Business Highlights
- Purchase of majority stake in Kx Systems opens a range of new
opportunities in Big Fast Data, strengthened by strategic
acquisitions to position the Group in new vertical sectors.
- Strategic acquisition of Prelytix LLC to expand the Group's
presence in the fast-growing marketing technology sector.
- Continued investment in software products with new clients for
Delta Flow, Delta Stream and Delta Algo driving revenue growth of
29%.
- Further growth and strategic progress in consulting, with a
total of six new Master Service Agreements helping to deliver
revenue growth of 15%.
- Oversubscribed placing of new shares with new and existing
institutional investors to accelerate growth.
- Further commitment during the period from Invest Northern
Ireland of GBP3.9m to support up to 484 new jobs in Newry.
Post period-end highlights
- Strategic acquisitions of Affinity Systems and ActivateClients
for a combined initial consideration of GBP7.1m.
- Board strengthened through the appointment of Virginia Gambale.
- Good start to new financial year with another year of strong
growth expected, moderately ahead of current consensus market
expectations.
Seamus Keating, Chairman of FD, commented:"This was a very
successful year for FD, with the purchase of a majority stake in Kx
Systems enabling the Group to broaden its strategy. The subsequent
investment across the business, including three strategic
acquisitions in 2015, positions FD as a leading player in Big Fast
Data across multiple vertical markets. This has been achieved while
maintaining a strong focus on current trading, with a strong second
half performance from both our consulting and software activities
enabling the Group to report record results for FY 2015 and upgrade
expectations for the current financial year. We will continue to
invest to maximise the growth potential of the business and view
the future with confidence."
For further information please contact:
First Derivatives plc +44(0)28 3025 2242
Brian Conlon, Chief Executive Officer www.firstderivatives.com
Graham Ferguson, Finance Director
Ian Mitchell, Head of Investor Relations
Investec Bank plc
(Nominated Adviser and Broker)
Dominic Emery
Sebastian Lawrence +44 (0)20 7597 4000
Goodbody (ESM Adviser and Broker)
Linda Hickey
Finbarr Griffin +353 1 667 0420
Walbrook PR
Paul Cornelius
Nick Rome
Helen Cresswell
Sam Allen +44 (0)20 7933 8780
About FD
FD is a global technology provider with nearly 20 years of
experience of working with some of the world's largest finance,
technology and energy institutions. It holds a 65% stake in Palo
Alto-based Kx Systems, developer of the world-leading database
technology, kdb+. It employs over 1,200 people worldwide and has
operations in London, New York, Stockholm, Singapore, Hong Kong,
Tokyo, Sydney, Toronto, Philadelphia, Dublin, Belfast and its
headquarters in Newry.
For further information, please visit
www.firstderivatives.com
CHAIRMAN'S STATEMENT
The financial year to 28 February 2015 was a very successful
year for First Derivatives. We made significant progress in
implementing our strategy with a number of key acquisitions and
delivered strong financial performance. Revenue for the year
increased by 19.0% to GBP83.2m, while adjusted EBITDA rose by 24.1%
to GBP15.5m.
Net debt (loans and borrowings less cash and cash equivalents)
at the period end was GBP15.7m (2014: GBP11.2m), the servicing of
which is underpinned by the Group's cash generation and performance
over recent years. The Board has recommended payment of a final
dividend of 10.20p per share (2014: 9.00p per share) which,
together with the interim dividend of 3.30p per share paid in
December 2014, gives a total dividend for the year of 13.50p per
share, an increase of 10.7% compared to the prior year. The final
dividend, if approved at the AGM on 25 June 2015, will be paid on
17 July 2015 to those shareholders on the register on 19 June
2015.
Software
Software revenue increased by 28.9% to GBP24.9m (2014: GBP19.3m)
with customer wins across our entire product portfolio. The size of
the market opportunity in capital markets is significant and we
continue to make progress positioning ourselves to capture a
meaningful share of that opportunity. Our clients have challenges
around balance sheet optimisation, regulation, transparency and
risk management which can be met through real- time data analytics,
which is the fundamental strength of our product suite.
Outside capital markets, we are engaged in discussions with a
number of potential customers that are attracted by the
capabilities of our flagship kdb+ and Delta products, reaffirming
our view that our software is ideally suited to Big Fast Data
opportunities across multiple sectors.
Consulting
Consulting revenues continued to grow strongly, rising by 15.3%
to GBP58.3m (2014: GBP50.6m). This is the twelfth consecutive year
of double-digit percentage growth in consultancy and reflects the
strength of customer relationships, the skills of our consultancy
staff and the recurring nature of our revenues.
During the year we were pleased to sign Master Service
Agreements with a number of new high profile clients, adding to the
strong relationships we have developed over the years. At a time
when clients are typically reducing the number of vendors to enable
them to manage these relationships more effectively, it represents
a vote of confidence in the Group that the number of clients we
engage with continues to increase. We see good potential to grow
strongly within our existing client base, while continuing to
target new clients.
We have continued our recruitment of both graduates and
experienced consultants as we seek to provide our clients with the
high quality service they expect and to allow us to widen our
service offering. We are pleased with the continued support from
Invest Northern Ireland, in the form of future grant assistance of
up to GBP3.9m, announced in June 2014, to support the creation of
484 new high quality jobs within the Group over the next few
years.
Corporate Development
The most significant acquisition activity was the increase in
our stake in Kx Systems Inc. ("Kx") to 65.2% in October 2014
opening further opportunities within capital markets and the
ability to penetrate other sectors with our software. Kx's
principal product kdb+ is widely acknowledged as the world's
pre-eminent time-series database.
The Group initiated a successful placing to raise GBP12.7m in
February 2015 (an additional GBP2.6m was placed in March 2015
following shareholder approval) while also increasing our bank
facilities to GBP36.5m in October 2014. This allowed us to complete
three acquisitions in addition to the increase in our shareholding
in Kx.
In February 2015 we acquired Prelytix LLC, a Massachusetts-based
provider of predictive analytics software operating within the
marketing technology sector for an initial consideration of GBP4.9m
which by the achievement of performance targets could increase to
GBP8.1m over a three year period.
Subsequent to the year end, in March 2015, we acquired Ontario
based Affinity Systems Limited (a Kx Systems Inc. partner) for an
initial consideration of GBP3.8m which, on the achievement of
demanding future targets, could grow to GBP7.7m. Affinity is a
software development consultancy specialising in utility, retail
and healthcare data management. We also acquired ActivateClients
Limited, a software business with important HTML5 capabilities
targeting financial markets and based in Dublin, for an initial
consideration of GBP3.3m, potentially increasing to GBP4.8m.
These acquisitions position us well to continue delivering
strong growth in our software businesses within Capital Markets and
the expertise to leverage our core software infrastructure assets
across other important market sectors.
Board Changes
There were no changes to the Board during the financial year. On
3 March 2015, Virginia Gambale was appointed a Non-Executive
Director of the Group. A U.S. citizen, Ms Gambale has extensive
experience as an enterprise technology buyer in capital markets, a
technology venture capital partner and an independent director
across diverse industry sectors. On 24 March 2015, Pat Brazel
resigned as a Non-Executive Director to join the Group in an
executive role, as Global Head of Software Sales. On behalf of the
Board I would like to thank Pat for his contribution to the Group
and wish him success in his new role.
Current Trading and Outlook
The current financial year has started positively, with good
growth in consultancy and a number of contract wins in software.
The investment in the Group's sales capability in recent years is
evident in the healthy pipeline of opportunities, while the high
levels of visibility in both consultancy and software provides
confidence that we will report another year of strong growth. This
will be supplemented by a positive impact from the Group's recent
acquisitions. Overall, the Group expects performance to be
moderately ahead of current market forecasts.
I would like to thank the staff of First Derivatives and my
Board colleagues for their hard work in achieving another
successful year of growth for the Group.
Seamus Keating 1 June 2015
Chairman
CHIEF EXECUTIVE'S STATEMENT
Within the capital markets sector, market conditions improved
over the past year with the drivers consistent with those of the
prior year - firmer underlying economies providing opportunities
for our clients to invest for growth; complex and widespread
increases in and changes to regulation; and pressure to reduce
costs, through the use of new technology or changes to the way that
technology is delivered.
In addition to the solid market conditions, we have started to
see the benefits of investment within our business in prior years.
Our acquisition of Kx Systems ("Kx") in October 2014 has positioned
the Group as a technology leader in the field of Big Fast Data and
to maximise the commercial opportunities available to us we have
invested both internally, in development, sales and marketing, as
well as through acquisition as detailed in the Chairman's
statement.
Review of activities
First Derivatives ("FD") provides software products that enable
the world's largest finance, technology and energy institutions to
meet the most demanding data management challenges they face. The
Group also provides a range of associated consulting services
within capital markets, where our customer base includes investment
banks, brokers, exchanges, regulators and hedge funds.
The most significant development during the year was the
increase in our investment in Kx Systems in October 2014. Kx is one
of the world's leading Big Data vendors and its principal product,
kdb+, is widely acknowledged as the pre-eminent time series
database. FD and Kx have been partners for more than a decade -
together we provide a market leading solution that allows
organisations to capture, analyse and store large volumes of data,
including streaming data.
In recent years we have made significant investments in sales
and marketing across the business, which has assisted our growth
rates and is reflected in the depth of our pipeline. Since we
announced our acquisition of Kx, we have invested further to enable
us to sell our software products to additional vertical markets and
this is beginning to generate a number of interesting
opportunities. I would caution that many of these opportunities are
still at an early stage, but we are encouraged by our engagement
with potential customers in respect of our ability to solve
significant data challenges.
Software
Software sales during the period increased by 28.9% to GBP24.9m
(2014: GBP19.3m). Our software provides a clear and, we believe,
compelling client proposition. While the term Big Data has become
associated with a number of software and services vendors analysing
unstructured data, typically using Hadoop, our software addresses a
related but more challenging problem, namely the rapid analysis of
large datasets and/or streaming, structured data, increasingly
termed Big Fast Data. We excel in this through the use of kdb+,
which has been independently benchmarked as the world's leading
time series database. Our software is therefore complementary to
the unstructured Big Data companies, with whom we see opportunities
to partner and collaborate.
Capital Markets Software
The technical capabilities of our software have helped us carve
out a significant market share within capital markets, with kdb+
being the timeseries database of choice for 9 of the 10 top
investment banks in the world as well as widespread usage of our
Delta products - a suite of applications built on top of kdb+. Our
products are used in areas such as market surveillance, trading,
regulatory reporting, transaction cost analysis and algorithmic
testing.
Our software addresses a market opportunity valued at billions
of dollars or more per annum. It is offered as a hosted,
multi-tenanted solution so the incremental cost of signing new
customers can be minimal.
Our software applications share a common technology platform,
which means that our software is easier to support, deploy and
upgrade. Our approach fosters rapid prototyping and innovation and
allows us to convert ideas to products very quickly. From its
conception we made a conscious decision to deploy applications in
the cloud and on mobile platforms - this decision has been
validated by recent technology trends. Through the recent
acquisition of ActivateClients we now have strengthened our HTML5
capabilities, and we are confident that we will not only have the
fastest back end technology in the market but also slick front end
visualisation.
Key wins over the past year have included:
- kdb+: Is now used by over 90 organisations and there were
nearly 30 new deals signed this year across hedge funds, banks and
technology suppliers.
- Market Surveillance: During the period, the Group won two
contracts to implement Surveillance at IEX, a high-growth equity
trading venue based in New York and Yieldbroker Pty Limited, an
electronic marketplace designed for institutional investors and
banking participants trading in Australian and New Zealand debt
securities and derivatives. These contracts built on the momentum
generated by the go live in November 2013 of the Group's flagship
surveillance contract with the Australian Securities and Investment
Commission. Our Surveillance product was also voted Market
Surveillance Product of the Year at the Futures and Options World
Awards in Singapore in September 2014.
- Energy Markets: After the period end, we secured our first
customer within energy trading surveillance - a leading European
oil and gas company is using our product to monitor trading
activity in the futures market as regulators tighten controls
within the industry.
- Exchanges: We signed the Shenzhen Stock Exchange earlier in
the year as well as deploying an innovative algo trading testing
platform at another large Asian Exchange.
- Foreign Exchange: Our Delta Flow platform had a positive year,
with performance weighted to the second half, providing good
momentum into the current year. We also signed a significant global
player, EBS, ICAP's market leading electronic FX business, who are
using our software for streaming analytics.
- Operations: During the year our Delta Operations Network has
been successfully deployed at six banks in Europe and is offered as
a managed service. These tools cover areas such as application
monitoring, regulatory reporting, single customer views,
reconciliations and testing.
Additional vertical markets
We have outlined in previous statements that while our software
platform's heritage is within capital markets, we believe its
competitive advantages in dealing with Big Fast Data are equally
applicable to a number of additional vertical markets. In
particular, given our nanosecond time stamping and geolocation
capabilities, we see the structured data flowing from connected
sensors, known as the Internet of Things, presenting an attractive
opportunity.
During the year we secured significant deals with the Ontario
Regulator (IESO), Purdue Pharma in the US and a leading oil and gas
company in South America. This has confirmed our belief that we
have a software product which is applicable across multiple
industries globally. We are in discussions with a number of
prospects in areas such as:
- Telecoms: customer profile monitoring/analysis; customer
marketing; sensor data monitoring; network optimisation.
- Utilities: smart meter data retrieval and analysis; network
monitoring; sensor data storage and analysis.
- Pharma: drug trial data capture, analysis and simulation; gene
sequencing and analysis; regulatory reporting.
- Others: automotive plant monitoring; proximity marketing;
preventative maintenance in manufacturing, web analytics.
We have accelerated our product roadmap and our entry to certain
verticals by recent acquisitions; our acquisition of Prelytix,
which specialises in predictive analytics generated by analysing
real-time advertising data, website traffic and social media; and
Affinity, which has developed a Sensor Data Management platform,
which is currently applied to smart meter data but which can be
adapted to handle data from any connected device. While these
market opportunities are still evolving, we are encouraged by the
initial interactions with potential customers.
Consulting
The Group has continued to build on its growing reputation as
one of the leading niche capital markets consulting companies in
the world. We have ongoing contracts with many of the leading
global banks, providing implementation, support and development
across a range of asset classes including credit, interest rate,
foreign exchange, equity, cash and derivatives markets. The Group
has been working in this area for nineteen years and our areas of
expertise and delivery capability continue to broaden and deepen as
we grow. This means we are able to bid for a wider range of
assignments, many of which are larger than those FD has typically
undertaken.
As a result of this increased activity, consulting recorded
another solid period of growth, with revenues increasing by 15.3%
to GBP58.3m (2014: GBP50.6m) in the year to 28 February 2015. We
have continued to grow the number of chargeable consultants since
the end of the period reflecting the continuing opportunity we see
within our capital markets niche and we continue to enjoy excellent
revenue visibility.
Our growth is built on a number of differentiators, which
include the strength of our internal training programme, which
emphasises both capital markets and technology skills and
capabilities; the ability to operate a hybrid on-site and near
shore support model for our clients; and a flexible pricing model
allied with a global footprint. These differentiators have ensured
that, at a time when many customers are rationalising their
supplier lists, FD is growing its client base, as evidenced by an
increase in the number of Master Service Agreements (MSAs) under
which we operate with larger clients. In the past year, we have
added six new MSAs taking the total to 80, and we have a number of
potential new MSAs under discussion.
Our underlying philosophy remains unchanged. We provide people
who understand the Capital Markets and who understand technology,
differentiating ourselves from our competitors. To meet our
clients' demands, we have developed and refined a number of
consulting offerings, which are designed to allow us to bid for
larger projects, to lock-in recurring revenue and to cross sell
products. These include a hybrid Nearshore offering, which combines
deploying a team of consultants in situ at the client, supported by
a team with similar expertise at a lower cost in our headquarters
in Newry. This approach addresses many of the concerns expressed
around Nearshoring, such as cultural fit, time zone issues and
consistency of service standards.
Our Multi-Vendor application support provides a single team to
support a range of third party applications such as Calypso, Murex
and Summit as well as legacy in-house systems. This
multi-disciplined team is also responsible for upgrades, testing,
customisation and development of interfaces at the client.
Management and Personnel
The Group now employs over 1,200 people, up from over 900 people
at the same time last year. Our increased brand recognition and the
opportunity to work on cutting edge technologies in locations
around the world continue to help us secure new talent and achieve
high retention rates. Once again I would like to pay tribute to all
FD employees for their hard work, talent, flexibility and
dedication.
Summary
We have had a great start to the year and our pipeline is very
strong. We have invested heavily in our sales function and in
buying new businesses to accelerate our product roadmap and to
address new vertical markets. We believe that the growing strength
of our brand, the quality of our consultants and the superiority of
our products leaves us ideally placed to continue our historical
growth trajectory in Capital Markets. Whilst challenges remain our
initial entry into other verticals has been very encouraging and we
believe that the solid foundation we have laid and the huge
addressable size of these markets gives us a significant
opportunity to deliver further growth for shareholders.
Brian Conlon 1 June 2015
Chief Executive Officer
Financial Review
The Group performed well in the year with sales increasing by
GBP13.3 million (19.0%). Growth arose from further penetration in
the two key business areas with consultancy sales increasing by
GBP7.7 million (15.3%) and software sales by GBP5.6 million
(28.9%). The profit before tax for the year of GBP17.5 million
(2014: GBP7.9 million) represented growth of 119.9%.
Revenue from continuing operations increased by 19.0% over the
prior year. Consulting revenues increased by 15.3% (2014: 22.0%)
and software revenues increased by 28.9% (2014: 28.8%). Software
revenue represented 29.9% of Group revenue for the year (2014:
27.6%) and on a pro forma basis, assuming Kx Systems had been
consolidated for the entire year, software revenue would have been
34.9% of Group revenue.
The Group increased its stake in Kx Systems to 65.2% at the end
of October 2014. Since then its performance has been in line with
management expectations and consolidated into the Group results. Kx
Systems will continue to be fully consolidated going forward. The
Company also issued a put for the remaining non-controlling
interest (NCI) of 34.8% under which the holders can require the
Company to purchase the remaining interest at a fixed price for a
period of seven years for cash. Changes in the fair value of the
NCI put is accounted for directly in equity. At year end, a long
term liability of GBP27.1m was recognised for the put option. The
increased investment within Kx Systems has resulted in a gain of
GBP9.6m in the Income Statement relating to the revaluation of the
Group's existing interest. This has been treated as an exceptional
gain for adjusted EBITDA purposes along with the associated costs
of the transaction.
To finance this increased investment the Group renewed and
increased its debt facility. As a result, finance expense increased
to GBP0.7m (2014: GBP0.6m) as a result of increased borrowings in
the second half of the year.
The Group's reported effective tax rate was 8.9% (2014: 19.5%).
The effective rate has reduced as there is no deferred tax
recognised on the gain arising on the deemed disposal of associate.
Excluding the deemed disposal results in an effective tax rate of
19.8% which is in line with prior periods.
The adjusted profit before and after tax is detailed below and
excludes the amortisation of acquired intangibles, share based
payments, gain on disposal of property, finance translation
income/charges, net gain on disposal of investment in associate,
acquisition costs along with associated taxation impact of these
adjustments.
2015 2014
GBP'000 GBP'000
Reported profit for the year 15,915 6,401
Adjustments for:
Amortisation of acquired intangibles 2,205 1,579
Share based payment and related
costs 1,495 932
Gain on disposal of property (1,669) (988)
Acquisition related costs 984 -
(Gain)/loss on foreign currency
translation (138) 19
Effects of investment in associate (9,582) (268)
Tax effect of the above (465) (304)
--------- ---------
Adjusted profit after tax 8,745 7,371
========= =========
EPS (fully diluted) 38.8p 34.2p
Adjusted profit before tax rose by 18.2%, again reflecting
profitable growth with adjusted earnings per share increasing by
13.4%. Fully diluted earnings per share growth was slightly lower
due to the increase in the weighted average number of shares in
issue to 22.6m (2014: 21.6m). The increase in shares was as a
result of share options exercised, shares issued to increase our
investment in Kx and a placing to institutional shareholders in
February 2015.
The Group generated GBP11.2m of cash from operating activities
(2014: GBP8.1m), representing 131.6% of result from operating
activities (2014: 97.6%). At the year end, net debt was GBP15.7m.
During the year the Group disposed of 7 properties which had been
utilised in the business. This generated a gain on disposal of
GBP1.7m (2014: GBP1.0m) and proceeds of GBP5.0m (2014: GBP7.1m).
This disposal programme is now complete. Net assets at 28 February
2015 were GBP98.3m compared to GBP52.1m at 28 February 2014.
Consolidated statement of comprehensive income
Year ended 28 February 2015
2015 2014
Note GBP'000 GBP'000
Revenue 2 83,216 69,902
Cost of sales (59,497) (50,674)
--------- ---------
Gross profit 23,719 19,228
Other operating income 1,045 1,950
Administrative expenses (16,288) (12,890)
--------- ---------
Results from operating activities 8,476 8,288
Acquisition and associate disposal costs 984 -
Share-based payment and related costs 1,495 932
Gain on disposal of property, plant and
equipment (1,669) (988)
Depreciation and amortisation 3,959 2,636
Amortisation of acquired intangible assets
(IFRS3) 2,205 1,579
--------- ---------
Adjusted EBITDA 15,450 12,447
----------------------------------------------- ----- --------- ---------
Finance income 3 4
Finance expense (723) (594)
Gain/(loss) on foreign currency translation 138 (19)
--------- ---------
Net financing expense (582) (609)
Share of profit of associate using the
equity method, net of tax 57 268
Loss on dilution in associate using the
equity method (60) -
Gain on disposal of investment in associate
and settlement of pre-existing relationships 9,585 -
--------- ---------
Profit before income tax 17,476 7,947
Tax expense (1,561) (1,546)
--------- ---------
Profit for the year 15,915 6,401
========= =========
Consolidated statement of comprehensive income (continued)
Year ended 28 February 2015
2015 2014
Note GBP'000 GBP'000
Profit for the year 15,915 6,401
Other comprehensive income
Net exchange gain/(loss) on net investment
in foreign subsidiaries and associate 2,334 (3,794)
Net loss on hedge of net investment in
foreign subsidiaries and associate (1,099) (227)
Reclassification of loss on net investment (59) -
in associate
Reclassification of gain on hedge investment 174 -
in associate
Reclassification of associate revaluation (167) -
reserve
--------- --------
Other comprehensive income for the period,
net of tax 1,183 (4,021)
--------- --------
Total comprehensive income for the period
attributable to owners of the parent 17,098 2,380
========= ========
Earnings per share Pence Pence
Basic 4 77.2 34.4
Diluted 4 70.6 29.7
========= ========
All profits are attributable to the owners of the Company and
related to continuing activities.
Consolidated balance sheet
Year ended 28 February 2015
2015 2014
Note GBP'000 GBP'000
Assets
Property, plant and equipment 5 5,948 5,358
Intangible assets and goodwill 6 134,293 38,025
Investment in associate - 5,233
Trade and other receivables 2,634 2,554
Deferred tax asset 6,450 5,855
-------- --------
Non current assets 149,325 57,025
-------- --------
Trade and other receivables 29,952 20,571
Cash and cash equivalents 14,705 4,393
Assets held for sale - 3,146
-------- --------
Current assets 44,657 28,110
--------
Total assets 193,982 85,135
======== ========
Equity
Share capital 114 98
Share premium 55,286 22,251
Share option reserve 6,262 6,627
Revaluation reserve - 167
Currency translation adjustment
reserve (1,690) (3,040)
Retained earnings 38,352 25,959
-------- --------
Equity attributable to shareholders 98,324 52,062
======== ========
Liabilities
Loans and borrowings 27,025 9,706
Deferred tax liabilities 29,490 2,087
Trade and other payables 11,284 4,008
Contingent deferred consideration 1,132 -
--------
Non-current liabilities 68,931 15,801
--------
Loans and borrowings 3,429 5,875
Trade and other payables 18,936 8,785
Current tax payable 490 430
Employee benefits 3,872 2,182
Current liabilities 26,727 17,272
Total liabilities 95,658 33,073
-------- --------
Total equity and liabilities 193,982 85,135
======== ========
Consolidated statement of changes in equity
Year ended 28 February 2015
Currency
Share option Revaluation translation Retained
Share capital Share premium reserve reserve adjustment earnings Total equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 March
2014 98 22,251 6,627 167 (3,040) 25,959 52,062
------------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive
income
for the year
Profit for the year - - - - - 15,915 15,915
Other comprehensive
income
Net exchange gain on
net
investment in foreign
subsidiaries
and associate - - - - 2,334 - 2,334
Net exchange loss on
hedge
of net investment in
foreign
subsidiaries and
associate - - - - (1,099) - (1,099)
Reclassification of
loss
on net investment in
associate - - - - (59) - (59)
Reclassification of
gain
on hedge of
investment in
associate - - - - 174 - 174
Reclassification of
associate
revaluation reserve - - - (167) - (167)
Total comprehensive
income
for the year - - - (167) 1,350 15,915 17,098
------------- ------------- ------------ ----------- ------------ --------- ------------
Transactions with
owners
of the Company
Income tax relating to
share
options - - (199) - - - (199)
Exercise of share
options 4 4,243 (867) - - - 3,380
Change in fair value
of NCI
put - - - - - (1,017) (1,017)
Issue of shares 5 12,102 - - - - 12,107
Issue of shares as
purchase
consideration 7 16,690 - - - - 16,697
Share based payment
charge - - 721 - - - 721
Transfer on forfeit of
share
options - - (20) - - 20 -
Dividends - - - - - (2,525) (2,525)
------------- ------------- ------------ ----------- ------------ --------- ------------
Balance at 28 February
2015 114 55,286 6,262 - (1,690) 38,352 98,324
============= ============= ============ =========== ============ ========= ============
Consolidated statement of changes in equity
Year ended 28 February 2014
Currency
Share option Revaluation translation Retained
Share capital Share premium reserve reserve adjustment earnings Total equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 March
2013 87 12,895 3,341 167 981 21,903 39,374
------------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive
income
for the year
Profit for the year - - - - - 6,401 6,401
Other comprehensive
income
Net exchange loss on
net
investment in foreign
subsidiaries
and associate - - - - (3,794) - (3,794)
Net exchange loss on
hedge
of net investment in
foreign
subsidiaries and
associate - - - - (227) - (227)
------------- ------------- ------------ ----------- ------------ --------- ------------
Total comprehensive
income
for the year - - - - (4,021) 6,401 2,380
Transactions with
owners
of the Company
Income tax relating to
share
options - - 3,350 - - - 3,350
Exercise of share
options 6 3,695 (752) - - - 2,949
Buy-back and
cancellation
of share options - - - - - (314) (314)
Issue of shares 4 4,562 - - - - 4,566
Issue of shares for
settlement
of deferred
consideration 1 1,099 - - - - 1,100
Share based payment
charge - - 757 - - - 757
Transfer on forfeit of
share
options - - (69) - - 69 -
Dividends - - - - - (2,100) (2,100)
------------- ------------- ------------ ----------- ------------ --------- ------------
Balance at 28 February
2014 98 22,251 6,627 167 (3,040) 25,959 52,062
============= ============= ============ =========== ============ ========= ============
Consolidated cash flow statement
Year ended 28 February 2015
2015 2014
GBP'000 GBP'000
Cashflows from operating activities
Profit for the year 15,915 6,401
Adjustments for:
Net finance costs 582 609
Share of profit of associate (57) (268)
Share of loss on dilution in associate 60 -
Depreciation of property, plant and
equipment 1,193 738
Amortisation of intangible assets 4,971 3,477
Gain on sale of property, plant & equipment (1,669) (988)
Gain on sale of investment in associate (9,585)
Equity settled share-based payment transactions 721 667
Grant income (1,045) (1,931)
Tax expense 1,561 1,546
--------
12,647 10,251
Changes in:
Trade and other receivables (5,538) (453)
Trade and other payables 4,430 (793)
--------- --------
Cash generated from operating activities 11,539 9,005
Taxes paid (382) (915)
--------- --------
Net cash from operating activities 11,157 8,090
Cash flows from investing activities
Interest received 3 4
Dividend received from associate 896 773
Disposal of property, plant and equipment 5,035 7,065
Acquisition of subsidiaries, net of
cash acquired (23,302) (148)
Acquisition of property, plant and equipment (2,228) (2,907)
Acquisition of intangible assets (7,145) (6,105)
Payment of deferred consideration - (125)
--------- --------
Net cash used in investing activities (26,741) (1,443)
Cash flows from financing activities
Proceeds from issue of share capital 15,487 7,515
Payment to buy-back share options - (314)
Proceeds from new borrowings 29,152 1,000
Repayment of borrowings (11,747) (9,829)
Payment of finance lease liabilities (1,038) (254)
Interest paid (722) (676)
Dividends paid (2,525) (2,204)
--------- --------
Net cash used in financing activities 28,607 (4,762)
Net increase in cash and cash equivalents 13,023 1,885
Cash and cash equivalents at 1 March 1,544 (322)
Effects of exchange rate changes on
cash held 138 (19)
--------- --------
Cash and cash equivalents at 28 February 14,705 1,544
========= ========
Notes
1 Basis of preparation
The consolidated financial statements consolidate those of the
Company and its subsidiaries (together referred to as the
"Group").
The financial information included in this preliminary
announcement does not constitute statutory accounts of the Group
for the years ended 28 February 2015 or 28 February 2014, but is
derived from those accounts. Statutory accounts for 2014 have been
delivered to the Registrar of Companies and those for 2015 will be
delivered following the Company's Annual General Meeting. The
auditors have reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
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
2015 2014
GBP'000 GBP'000
Consulting 58,320 50,593
Software 24,896 19,309
______ ______
Total 83,216 69,902
______ ______
Geographical location analysis
Revenues Non-current assets
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
UK 35,182 26,857 20,983 17,915
Rest of Europe 13,231 9,607 10,160 11,274
America 28,531 26,230 110,091 20,225
Australasia 6,272 7,208 1,641 1,756
______ ______ ______ ______
Total 83,216 69,902 142,875 51,170
______ ______ ______ ______
3 Dividends
2015 2014
GBP'000 GBP'000
Final dividend relating to the prior year 1,813 1,499
Interim dividend paid 712 601
------- -------
2,525 2,100
======= =======
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 9.0
(previous year: 8.4) pence per share and the interim dividend paid
during the year amounted to 3.3 (previous year: 3.2) pence per
share. The cumulative dividend paid during the year amounted to
12.30 (previous year: 11.60) 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.
2015 2014
GBP'000 GBP'000
10.20 pence per ordinary share (2013: 9.00
pence) 2,323 1,813
======= =======
4 (a) Earnings per ordinary share
Basic
The calculation of basic earnings per share at 28 February 2015
was based on the profit attributable to ordinary shareholders of
GBP15,915k (2014: GBP6,401k), and a weighted average number of
ordinary shares ranking for dividend of 20,605k (2014:
18,623k).
2015 2014
Pence per Pence per
share Share
Basic earnings per share 77.2 34.4
========= =========
Weighted average number of ordinary shares
2015 2014
Number '000 Number '000
Issued ordinary shares at 1 March 19,542 17,484
Effect of share options exercised 604 421
Effect of shares issued as purchase consideration 414 -
Effect of shares issued to settle deferred
consideration - 152
Effect of shares issued for cash 45 566
Weighted average number of ordinary shares
at 28 February 20,605 18,623
=========== ===========
Diluted
The calculation of diluted earnings per share at 28 February
2015 was based on the profit attributable to ordinary shareholders
of GBP15,915k (2014: GBP6,401k) and a weighted average number of
ordinary shares after adjustment for the effects of all dilutive
potential ordinary shares of 22,554k (2014: 21,564k).
2015 2014
Pence Pence
per share per share
Diluted earnings per share 70.6 29.7
========== ==========
Weighted average number of ordinary shares (diluted)
2015 2014
Number Number
'000 '000
Weighted average number of ordinary shares
(basic) 20,605 18,623
Effect of dilutive share options in issue 1,949 2,941
Weighted average number of ordinary shares
(diluted) at 28 February 22,554 21,564
====== ======
At 28 February 2015 nil options (2014: 552k) were excluded from
the diluted weighted average number of ordinary shares calculation
as their effect would have been anti-dilutive.
The average market value of the Group's shares for the purposes
of calculating the dilutive effect of share options was based on
quoted market prices for the year during which the options were
outstanding.
4 (b) Earnings before tax per ordinary share
Earnings before tax per share are based on profit before
taxation of GBP17,476k (2014: GBP7,947k). The number of shares used
in this calculation is consistent with note 4(a) above.
2015 2014
Pence per Pence per
share share
Basic earnings before tax per ordinary share 84.8 42.7
Diluted earnings before tax per ordinary
share 77.5 36.9
========= =========
Reconciliation from earnings per ordinary share to earnings
before tax per ordinary share.
2015 2014
Pence per Pence per
share share
Basic earnings per share 77.2 34.4
Impact of taxation charge 7.6 8.3
--------- ---------
Adjusted basic earnings before tax per share 84.8 42.7
========= =========
Diluted earnings per share 70.6 29.7
Impact of taxation charge 6.9 7.2
--------- ---------
Adjusted diluted earnings before tax per
share 77.5 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 GBP8,745k (2014: GBP7,371k). The adjusted profit
after tax has been calculated by adjusting for the amortisation of
acquired intangibles after tax effect GBP1,764k (2014: GBP1,247k),
share based payment and related charges after tax effect GBP1,196k
(2014: GBP736k), profit on disposal of property, plant and
equipment after tax effect GBP1,316k (2014: GBP760k), acquisition
and associate disposal costs after tax effect GBP787k (2014:
GBPNil), gain on foreign currency translation after tax effect
GBP109k (2014: loss of GBP15k) and for the gain on disposal of
investment GBP9,492k (2014: GBP268k). The number of shares used in
this calculation is consistent with note 4(a&b) above.
2015 2014
Pence per Pence per
share share
Basic earnings after tax per ordinary share 42.4 39.6
Diluted earnings after tax per ordinary
share 38.8 34.2
========= =========
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 2014 2,792 4,687 235 7,714
Additions 32 1,960 236 2,228
Acquisition through
business combinations - 25 - 25
Disposals (241) - - (241)
Exchange adjustments (3) (350) (4) (357)
----------- ----------- ----------- ---------
At 28 February
2015 2,580 6,322 467 9,369
----------- ----------- ----------- ---------
Depreciation
At 1 March 2014 460 1,744 152 2,356
Charge for the
year 221 936 36 1,193
Disposals (20) - - (20)
Exchange adjustments (5) (97) (6) (108)
----------- ----------- ----------- ---------
At 28 February
2015 656 2,583 182 3,421
----------- ----------- ----------- ---------
Net book value
At 28 February
2015 1,924 3,739 285 5,948
=========== =========== =========== =========
Land and Plant and Office Total
buildings equipment furniture
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 March 2013 8,494 2,696 165 11,355
Additions 598 2,237 72 2,907
Disposals (3,811) - - (3,811)
Reclassification
to assets held
for sale (2,419) - - (2,419)
Exchange adjustments (70) (246) (2) (318)
----------- ----------- ----------- ---------
At 28 February
2014 2,792 4,687 235 7,714
----------- ----------- ----------- ---------
Depreciation
At 1 March 2013 762 1,388 111 2,261
Charge for the
year 233 462 43 738
Disposals (259) - - (259)
Reclassification
to assets held
for sale (265) - - (265)
Exchange adjustments (11) (106) (2) (119)
----------- ----------- ----------- ---------
At 28 February
2014 460 1,744 152 2,356
----------- ----------- ----------- ---------
Net book value
At 28 February
2014 2,332 2,943 83 5,358
=========== =========== =========== =========
6 Intangible assets and goodwill
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 2014 13,526 3,547 9,011 361 22,394 48,839
Development costs - - - - 6,594 6,594
Acquisitions 73,736 5,659 12,332 194 - 91,921
Additions - - 551 - - 551
Disposals - - (785) - - (785)
Exchange adjustments 3,161 319 73 5 (809) 2,749
--------- --------- ---------- ----------- ----------- ----------
At 28 February
2015 90,423 9,525 21,182 560 28,179 149,869
--------- --------- ---------- ----------- ----------- ----------
Amortisation
and impairment
losses
Balance at 1
March 2014 - 1,653 4,430 186 4,545 10,814
Amortisation
for the year - 644 1,509 52 2,766 4,971
Exchange adjustment - 124 (136) 1 (198) (209)
--------- --------- ---------- ----------- ----------- ----------
At 28 February
2015 - 2,421 5,803 239 7,113 15,576
--------- --------- ---------- ----------- ----------- ----------
Carrying amounts
At 28 February
2015 90,423 7,104 15,379 321 21,066 134,293
========= ========= ========== =========== =========== ==========
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 2013 14,943 3,810 9,514 387 16,761 45,415
Development costs - - - - 5,987 5,987
Additions - - 208 - - 208
Adjustment to
deferred consideration 14 - - - - 14
Exchange adjustments (1,431) (263) (711) (26) (354) (2,785)
--------- --------- ---------- ----------- ----------- ---------
At 28 February
2014 13,526 3,547 9,011 361 22,394 48,839
--------- --------- ---------- ----------- ----------- ---------
Amortisation
and impairment
losses
Balance at 1
March 2013 - 1,356 3,653 156 2,705 7,870
Amortisation
for the year - 450 1,084 45 1,898 3,477
Exchange adjustment - (153) (307) (15) (58) (533)
--------- --------- ---------- ----------- ----------- ---------
At 28 February
2014 - 1,653 4,430 186 4,545 10,814
--------- --------- ---------- ----------- ----------- ---------
Carrying amounts
At 28 February
2014 13,526 1,894 4,581 175 17,849 38,025
========= ========= ========== =========== =========== =========
7 Report and accounts
Copies of the Annual Report will be available as of 9 June 2015
on the Group's website, www.firstderivatives.com and from the
Group's headquarters at 3 Canal Quay, Newry, BT35 6BP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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