FD Technologies flags strong growth in full-year update

FD Technologies reported 12% growth in revenue in a full-year trading update on Tuesday, to £296m, despite a strengthening dollar against sterling in the second half.

The AIM-traded company said group EBITDA was expected to total £35m for the year ended 28 February, with strong performances at KX and First Derivative offset by weak demand at MRP.

Real-time analytics platform KX had a strong performance, with revenue of £80m and annualised recurring revenue of £65m, a 39% increase on the prior year.

First Derivative meanwhile had revenue of £174m, representing growth of 18%, and was expected to perform well with a revenue growth outlook of at least 10% combined with a meaningful improvement towards the three-year target of a 15% EBITDA margin.

MRP revenue was around £41m - a decline of 19%, primarily due to macroeconomic conditions, although a lower cost base was expected to deliver an improvement in EBITDA for the year.

FD Technologies said it expected KX to achieve annual recurring revenue growth of at least 35% looking ahead, and was confident in its prospects.

“KX and First Derivative have performed strongly, with both revenue and EBITDA ahead of our expectations, as each business strengthened its market position,” said group chief executive officer Seamus Keating.

“KX in particular has made strong commercial and strategic progress, driven by our market-leading ability to deliver 100x the performance at one tenth of the cost of alternative solutions.

“These advantages are particularly compelling for hyperscale cloud providers, resulting in a range of initiatives which we are progressing with our partners that provide further confidence in our outlook.”

Keating also noted a strong performance for First Derivative, as the division continued to deliver “impressive” revenue growth of 18% for the period.

“We continue to see multi-year strategic growth drivers that will underpin demand for our services.

“We have set ourselves ambitious but sustainable growth targets for the years ahead which will ensure we are focused on driving high-quality recurring revenue growth from an expanding list of customers across a wide range of industries, while generating long term value for shareholders.”

FD Technologies said it would announce its results for the year ended 28 February on 23 May.

At 0844 BST, shares in FD Technologies were up 4.18% at 1,746p.

Reporting by Josh White for Sharecast.com.