Financial Objects sees banking sofware sales slide

Financial Objects sees banking sofware sales slide

UK fintech vendor Financial Objects is reporting a 46% rise in pre-tax profit for the first half of the year, despite revenue at the vendor's banking systems unit falling 21% during the period.

The group's pre-tax profit rose to £1.27 million in the six months to 30 June 2007, from £872,000 a year ago. Group revenue increased 14% to £10.6 million.

The vendor says its first half results were boosted by a "high level of organic sales growth" at its wealth management division and energy unit - which was established when it acquired risk software firm Raft International last year.

Sales of wealth management software came in at £1.8 million and accounted for 17% of the vendor's overall H1 turnover (2006: £1.0 million, 11%). Financial Objects says sales of its credit risk system to the energy trading sector stood at £2.1 million at the end of the first half, and accounted for 20% of overall turnover (2006: £0.4 million, 4%).

But revenues at the vendor's banking unit declined 21% during the period. Banking systems sales of £4.7 million accounted for 44% of the group turnover in H1 (2006: £5.9 million, 63%).

The company says the decline is the result of particularly high licence sales in H1 2006, but also reflects a "lower than planned conversion of prospects". However recurring sales within the division came in at £2.5 million, 53% (2006: £2.5 million, 42%).

Financial Objects says it now expects to record a full year decline in revenues in the division, but insists that there continues to be a good market for its banking products.

The group says it has appointed a new head of banking - although details of the appointment will not be disclosed until Sibos - and it is "undertaking increased investment in sales resource to build for 2008 and beyond".

Shares in Financial Objects were down four per cent to 60.00 pence in mid-morning trading.

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