Struggling US trading technology vendor Nyfix is reporting higher losses for the third quarter as its business continues to be hit by restructuring expenses as well as rising start-up costs for its Euro Millennium ATS.
The vendor has posted a loss from continuing operations of $7.4 million for the third quarter, compared to a $3.8 million loss a year ago. Group revenue increased 29% to $32.6 million, compared to revenues of $25.2 million for third quarter 2006.
Nyfix has incurred steep restructuring costs during the first half of the year and these have continued to hurt the business into the third quarter, including "transitional rebuilding and remediation costs" which came in at $2 million in Q3.
The vendor is also still incurring costs relating to an on-going SEC investigation into its financial reporting, as well as from an incident earlier in the year when it was hit with a $1.6 million contingency relating to a botch up in collecting Nyse linkage fees from clients.
Nyfix also incurred increasing pre-operating start-up costs of $1.3 million - up from $0.6 million in the second quarter - for its Euro Millennium ATS during the period. The off-exchange trading system for pan-European listed cash equities is expected to launch in early 2008.
Commenting on the Q3 results, Nyfix CEO, Howard Edelstein, says: "We continued to invest heavily in our human capital, infrastructure, and electronic trading solutions in the third quarter. We are confident that these investments have well positioned us to take advantage of the ever increasing demand for global electronic trading."
Last month the New York-based vendor said it was shutting down its Fusion order management business and moving all users of the technology to Citi's Lava ColorPalette platform.
In exchange Citi will offer access to Nyfix's full suite of electronic trading services - including Marketplace, Nexas algorithms and the Millennium ATS - to the new and existing clients through the Lava ColorPalette OMS.