Royalblue reports profits down, conditions "easing"

Royalblue reports profits down, conditions "easing"

UK trading technology vendor royalblue is reporting a five per cent drop in operating profit and one per cent fall in turnover for the year ended December 2003.

Revenue has decreased by one per cent to £56.5 million (2002 £57.0 million) with fidessa licence rental revenue growing by 32%, service-managed fidessa revenue growing by 77% and consultancy revenue declining by 25%. Operating profit before exceptional items decreased five per cent to £7.8 million (2002 £8.2 million).

The company forecasts an easing of the difficult trading conditions which have characterised the last three years, but warns that the business climate is likely to remain tough into the first half of 2004.

"However, we believe that a return to growth of both revenue and profit will be possible for the year as a whole," says the firm in a trading statement. "We also believe that this growth will continue to be led by substantial growth in high quality recurring revenue from our fidessa services and we expect to see growing momentum developing as a result of our new propositions and in particular our fidessaExpress connectivity business."

This will mean a further period of significant investment as royalblue raises its spending on fidessaExpress, the fidessa workstation and the remote broker network.

Says the firm: "In addition to the software development, we expect further costs of £1.1 million in 2004 as a direct result of the investment in the infrastructure, exchange agreements and the specialist staff required for these initiatives."

By mid-morning, the shares were trading down 3.3% at 553.5 pence, 19 pence off the weekend close of 572.5 pence.

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