FD Technologies swings to loss as it works on growth

FD Technologies reported a 7% improvement in revenue in its first half on Tuesday, to £128m, as its gross profit also grew by 7% to £51.7m.

The AIM-traded firm recorded a loss before tax of £1.6m for the six months ended 31 August, swinging from a profit of £7.4m a year earlier, as it reported diluted losses per share came in at 7.5p, compared to earnings of 21.8p in the first half of last year.

Net debt at period end totalled £11.7m, shrinking from the £30.6m figure FD reported 12 months ago.

Looking at its operations, FD Technologies said key investment targets were met for the period, including a 52% increase in the size of the KX go-to-market team, delivering on technology development milestones and upgrading systems and processes.

A total of 41 KX subscription deals were made in the period, compared to 14 at the same time last year, as it focussed on growing its recurring subscription revenue.

FD signed 12 new customers across financial services, automotive, manufacturing, utilities and healthcare, all of which had “significant” expansion potential.

The company also launched the cloud-first platform ‘KX Insights’ during the period, with six customers signed, including a global enterprise deal with Alpine F1 using Microsoft Azure for “actionable intelligence”.

FD’s board said the firm was executing its shift to high-value recurring revenue in KX, with its net retention rate increasing to 102% from 99% at the 2021 financial year end.

It also reduced its sales cycle and the deployment effort required for KX, accelerating the time-to-value for customers as it focussed on growth in annual recurring licence revenue.

FD increased its engagement with major cloud partners, with multiple pipeline deals for KX Insights with Microsoft Azure, Amazon Web Services and Google Cloud.

“I am very encouraged by the increasing momentum across the business since we announced our accelerated growth strategy in May,” said chief executive officer Seamus Keating.

“The opportunity for KX to deliver continuous intelligence remains enormous, and we are excited by the traction we are achieving across industries.

“Our cloud-first platform, KX Insights, was launched during the period and we have already signed new enterprise customers who, importantly, are already getting value from their investment.”

Keating said the investment in the company’s go-to-market strategy was also starting to deliver returns, evidenced by accelerating growth in recurring revenue, partner engagement, industry accreditation and strengthening pipeline.

“We have signed three times as many subscription deals as we did in the same period last year.

“Both First Derivative and MRP are performing strongly, driven by good demand from both existing and new customers.”

Seamus Keating said the outlook across the business was positive, with each business unit expected to meet or exceed its full-year growth target.

“We are particularly excited by the growing evidence that KX Insights can make real-time decision-making easy to implement for organisations.

“With its increasing ease of use, deployment freedom and interoperability, backed by our investment in leadership and go-to-market capability, we see KX as strongly positioned to build a market-leading position in continuous intelligence.”

At 1211 GMT, shares in FD Technologies were up 0.37% at 2,022.4p.