Fidessa still confident despite tough market conditions

Trading, investment management and information solutions company Fidessa Group reported difficult trading conditions in an update to the market on Thursday morning, but nonetheless remained confident in its outlook.

The AIM-traded firm said the movements seen in the financial markets during the first quarter of 2016 clearly demonstrate the challenging environment in which Fidessa’s customers are operating.

“Despite this, the themes Fidessa saw during 2015 are continuing, with more opportunities opening up as customers position their businesses for the future,” the board said in a statement.

“The further delays in the introduction of some of the proposed regulatory changes that have been announced are not having a significant impact on the opportunities Fidessa is seeing and it believes that the investments it has made during the downturn leave it well positioned to benefit from these opportunities.”

Fidessa said the closures and consolidations its saw within its customer base during 2015 meant that a higher level of headwind during 2016 was anticipated, and whilst some further closures and consolidations are expected during the remainder of 2016, it believes it will reduce as markets stabilise.

“Despite the increased headwind, Fidessa still expects 2016 constant currency growth to be at a similar level to that which it saw in 2015 with good single-digit growth in core-equities and continued double-digit growth in recurring derivatives revenue.”

Looking further ahead, the board believes opportunity is returning to the markets.

It said it expects to make further strong progress with its multi-asset initiative, and believes it is on track to achieve profitability within its derivatives business within the next three years.

“Fidessa continues to look at the possibility of extending its asset class coverage further, and will update the market as progress is made.

“Fidessa believes that across all asset classes, the market is moving towards service-based offerings and believes that there are increasingly few vendors capable of meeting its customers' business requirements whilst also having the scale and infrastructure necessary to handle the latest compliance demands being made by the regulators.”

The company said it remains committed to playing an increasingly important role in the markets as customer focus in efficiency, transparency, compliance and performance, and expects that as markets stabilise this will provide it with significant opportunities to further growth.

“Fidessa continues to have a strong balance sheet with strong reserves, no debt, strong cash generation and substantial levels of recurring revenue.”