Patsystems on course for break even in Q2

Patsystems on course for break even in Q2

UK derivatives trading software vendor Patsystems says it expects pre-tax result for the second quarter of 2005 to be 'roughly break-even'.

Patsystems said in November that it expected to deliver a "significant profit" to shareholders in 2005 despite posting widening operating losses last year.

In a trading update the vendor says although there is a loss for the first quarter, sales are up 16% on Q1 last year. But with costs almost identical to the first quarter of 2004, losses for the period have been "much reduced".

Patsystems expects its pretax result for the Q2 2005 to be 'roughly break-even', which would result in an improvement of almost £0.5m at the 'trading profit' level over the second quarter of 2004, and one of nearly £0.8m at the pre-tax profit level.

The firm still expects costs to fall in line with estimates provided in November. Costs are expected to decrease to £3m for Q2 and the remaining two quarters of the year.

The improvement in the firm's results is due in part to completing development of its next-generation TradeMark platform. In 2004, the final costs of TradeMark were £900,000 more than expected at the start of the year. Patsystems says it has now received its "first customer proposal" for the platform. The final beta test version of TradeMark will be installed in the first week of May, and the vendor says it will soon start rolling out the first products from the Trademark programme, starting with its Pro-Mark front end application.

The company has also secured a new development contract with the Tokyo Grain Exchange, which is expected to generate revenues of £4 million over the next five years.

Patsystems shares were up 5.30% in morning trading to 14.75 pence.

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