TIDMFDP
RNS Number : 2822J
First Derivatives PLC
09 April 2020
9 April 2020
First Derivatives plc
("FD" or the "Group")
Trading Update and Notice of Results
FD (AIM: FDP.L, Euronext Growth: FDP.I) announces that it
continued to trade positively in the second half of the financial
year ended 29 February 2020. As a result, the Board expects to
report a financial performance in line with company-compiled
consensus forecasts of GBP241m of revenue and GBP46m of adjusted
EBITDA. Net debt at the period end was GBP50m, which was better
than the consensus forecast of GBP56m.
COVID-19
The global operations of the Group enabled us to identify the
business disruption threat of COVID-19 early, and we implemented
our pandemic plan at the beginning of February across all regions
in which we operate. A team led by CEO Seamus Keating and
comprising senior leaders across FD coordinated the action, with
the priorities of protecting the health and wellbeing of our
employees and supporting our customers.
In FinTech, the Group supports mission-critical systems across
the financial industry and in other markets our technology is key
to the success of our customers. We contacted all our customers to
minimise the impact of COVID-19 through various measures including
remote working and are pleased that these are working without
significant disruption to the business.
Impact to date
To date we have seen no financial impact from the effects of
COVID-19. All our services delivery is now being conducted
remotely, with no impact on revenue. In our managed services and
consulting business the services that we provided prior to COVID-19
are now being delivered remotely with utilisation rates in March
2020 remaining in line with the prior month. We continue to monitor
developments closely through close and regular contact with
customers across all the markets in which we operate.
Potential impacts and mitigation
Looking ahead, our conversations with customers indicate that in
the near-term there will be a lengthening of software sales cycles,
at least until the impact of COVID-19 is clearer. The Group is
protected to some extent by the breadth of its sales pipeline
across multiple industries and geographies, while further
reassurance is provided by the repeat and recurring nature of the
majority of our software revenue.
In consulting and managed services, we continue to benefit from
high levels of repeat revenue from the 'Business as Usual'
operations of our capital markets clients. We are monitoring the
impact of COVID-19 on new business, particularly with regard to
project work implementing change programs.
As the macroeconomic impact of COVID-19 continues to grow, the
Group has conducted a scenario testing exercise with a range of
assumptions including a severe, extended downturn in economic
activity. Under all such scenarios the Group remains profitable and
cash generative.
Notwithstanding the assurance provided by our scenario testing,
the Group has taken a range of measures to mitigate any future
potential impact of COVID-19, including suspending non-essential
business travel and short-term deferral of the summer graduate
intake. In addition, the Executive Directors will not receive a
bonus payment relating to the financial year ended 29 February
2020.
In order to preserve the Group's liquidity during this period,
the Board will not recommend a final dividend in respect of the
year to 29 February 2020.
Liquidity
As at 31 March 2020, FD had gross cash available to it of
GBP64m. This included GBP35m of funds drawn down on 24 March 2020
from the Group's available finance facilities, with the funds
placed on deposit to provide further comfort on liquidity should
conditions deteriorate markedly. The Group has a further GBP15m in
undrawn revolving credit facilities available to it.
The Group has significant headroom on its covenants and taking
into account the scenario testing and mitigating measures taken,
expects that situation to persist through the impact of COVID-19,
irrespective of its duration.
The strength of our business model and liquidity position
provide us with the confidence to continue to invest across the
Group, in line with our strategy.
Summary
The Group delivered continued solid growth in the financial year
to 29 February 2020. We reacted quickly to help employees and
customers minimise the impact of COVID-19. While there has been no
financial impact to date, it is still too early to determine what
impact may result, particularly if there is an extended period of
economic disruption. We believe that the Group has acted prudently
to mitigate any potential impact through a range of measures aimed
at ensuring its ongoing financial liquidity.
In the longer term, FD remains confident in its strategy and in
particular the growth in demand for its world-class Kx technology
from both potential customers and partners.
Date of results
The Group will announce its full year results for the year ended
29 February 2020 on 19 May 2020. A briefing for analysts and
investors will be held on the day and further details will be
provided in due course.
Enquiries
For further information please contact:
First Derivatives plc +44(0)28 3025 2242
Seamus Keating, Chief Executive Officer www.firstderivatives.com
Graham Ferguson, Chief Financial Officer
Ian Mitchell, Head of Investor Relations
Investec Bank plc (Nominated Adviser and Broker)
Andrew Pinder
Carlton Nelson +44 (0)20 7597
Sebastian Lawrence 5970
Goodbody (Euronext Growth Adviser and Broker)
David Kearney
Don Harrington
Finbarr Griffin +353 1 667 0420
FTI Consulting
Matt Dixon
Dwight Burden +44 (0)20 3727
Darius Alexander 1000
About FD
FD is a global technology provider with more than 20 years of
experience working with some of the world's largest finance,
technology, automotive, utility, manufacturing and energy
institutions. The Group's Kx technology, incorporating the kdb+
time-series database, is a leader in high-performance, in-memory
computing, streaming analytics and operational intelligence. Kx
delivers the best possible performance and flexibility for
high-volume, data-intensive analytics and applications across
multiple industries. FD operates from 15 offices across Europe,
North America and Asia Pacific, including its headquarters in
Newry, and employs more than 2,400 people worldwide.
For further information, please visit www.firstderivatives.com
and www.kx.com
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contact rns@lseg.com or visit www.rns.com.
END
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