Financial Objects rises on bullish trading update
25 November 2005 | 4620 views | 0
Shares in Financial Objects jumped in morning trading after the UK banking systems vendor released an up-beat trading statement saying it expects full year pre-tax profits to be ahead of expectations.
The stock rose 16.40% to 42.50 pence after the vendor released a bullish trading update saying it expects profit - before exceptionals and goodwill - for the year ending 31st December 2005 to be higher than expected due to strong underlying trading across its three divisions.
Financial Objects says revenues in the second half have continued to increase in line with expectations, while its cost base has decreased.
But the group's second half exceptional costs - which are wholly related to the integration of the Wealth Management Software (WMS) business it acquired in May - are expected to be higher than originally projected as a result of a full provision for the lease on the London office of WMS (£0.4 million) and other reorganisation costs (£0.1m).
However, the vendor says the restructuring of WMS is now complete and the costs of the integration have been partly offset by the cash realised on the sale of part of the property division acquired with WMS.
The group's year end net cash balance is expected to be ahead of the £2.3 million reported at the half year.
Looking ahead the vendor says it remains focused on cutting costs, primarily by transferring software development to Bangalore and achieving greater scale following the acquisition of WMS.