FDM Group profits up 26% on strong showing from financial services project

IT firm FDM Group saw pre-tax profits rise 26% in the year ended December 31, rounding the year out with £47.2m in profits thanks to increasing revenues from Mountie.

Group revenue gained 23% to £233.6m for the period, despite its gross margin narrowing to 44.6% from 45.5%.

Revenues from its Mountie programme, a project that sees FDM supply banks with direct IT support, increased 24% to £207.3m from the £167.3m posted a year prior as Mounties assigned to client sites rose 17% to 3,170 from 2,705.

Contractor revenue improved 19% to £26.3m.

Cash flow from operations strengthened 23% to £48.3m, despite its adjusted cash conversion falling 3% to 102.2%.

FDM said it would remain focused on growing Mountie numbers and revenues, while treating contractor revenues mostly as an ancillary source of income to the group before putting the unit into a managed decline in the longer-term.

The London-based group announced a dividend of 14.0p per share, pushing its total dividend for the year to 26.0p, a 33% increase on 2016's figures.

Chief executive Rod Flavell, said, "The group returned a strong performance in 2017, generating growth in Mountie numbers, revenue and profit while continuing to invest, in each of its territories, in sustainable and long-term growth."

"During the early part of 2018 FDM has seen continued strong momentum across all of its markets and I am confident that FDM will deliver another year of good operational and financial performance in 2018," he added.

As of 1000 GMT, shares had jumped 7.36% to 953.40p.