Shares in UK trading technology vendor Fidessa have moved up after the company reported rising revenue and profits for the year and a strong sales pipeline, with no signs yet of a credit crisis-inspired slowdown in spending.
Fidessa stock was up 55.50 pence, or 7.4%, to 805.50 pence in afternoon trading after the vendor said revenue - including an eight-month contribution from its Latentzero unit - for the full year ending 31 December 2007 was up 43% to £135 million, compared to £94.6 million a year ago.
Full year pre-tax profit rose 20% from 14.3 million to £17.1 million.
Chris Aspinwall, chief executive, Fidessa says during 2007, market conditions in both the buy-side and sell-side businesses have remained strong. High levels of market activity have combined with regulatory changes such as RegNMS in the US and MiFID in Europe to maintain demand for products and compliance tools.
Fidessa says revenue growth has been consistent across regions. Year on year revenue from clients in Europe was up by 42% from £48.7 million to £69.2 million. North American revenue grew 52% to £49.5 million, while revenues from Asia increased 23% to £16.3 million.
The acquisition of LatentZero at the end of April transformed the company into a major vendor to the buy-side as well as the sell-side. The company says the unit has performed well, delivering an operating profit of £1.2 million with an operating margin of 9.1%, a material improvement from being loss making in recent years.
Looking ahead, Aspinwall says so far the business remains unscathed by the US credit crisis.
"We expect that some of our customers may come under pressure during 2008 as a result of the current market conditions, but we have yet to see any impact of this within our sales pipeline," he says.
Aspinwall says the firm expects that demand for services to remain strong as customers look to maximise workflow efficiency in order to control costs and further fragmentation of liquidity drives widespread use of execution tools.
"In addition, we believe that the recent market changes will increase the pressure on both the buy-side and sell-side to implement the market leading compliance tools that we offer," says Aspinwall. "As a result, we anticipate that performance will continue to be strong across the business in 2008."