Fidessa highlights increasing uncertainty but sees benefits from weaker pound

In a statement for the period from 1 January to date, the company said European elections, the forthcoming Brexit negotiations and the establishment of the new US administration are creating uncertainty, which in turn is causing some customers to take longer than normal to make decisions.

Nevertheless, the group reckons it is well positioned to benefit from the opportunities that will arise in markets as a result of regulatory and structural changes. In addition, it pointed out that with more than 60% of its revenue derived from outside Europe, and more than 70% in non-sterling currencies, it should benefit from any continued weakness in sterling.

As announced in the 2016 preliminary announcement, Fidessa said it expects one-off and duplicate costs related to the relocation of its main US office from New York to Jersey City will cut the profit after tax margin by around 1% this year.

"Fidessa expects to continue to make progress with its multi-asset initiative and will continue to investigate the possibility of extending its asset class coverage further. Fidessa believes that across all asset classes, the market is moving towards the increased use of service-based solutions and that few vendors have both the depth of applications and the scale of infrastructure needed to deliver these solutions.

"Fidessa is committed to playing an increasingly important role in the markets as customers focus on efficiency, transparency, compliance and performance, and expects that this will provide it with significant opportunities for further growth."

Numis downgraded its stance on Fidessa to 'add' from 'buy' following the update, noting the strong performance of the shares in recent months.

The brokerage said the update was "largely consistent with the FY16 outlook statement, but extends the slight note of geopolitical caution from that statement".

At 1206 BST, the shares were down 8.7% to 2,383p.