Financial Objects reports profit rise; eyeing acquisitions

Financial Objects reports profit rise; eyeing acquisitions

After reporting a healthy rise in full year pre-tax profits, UK fintech vendor Financial Objects says it is on the look out for earnings-enhancing acquisitions.

Financial Objects says 2007 returned a third successive year of growth. Pre-tax profit for the year ending 31 December 2007 rose 40% to £2.8 million, compared to £2.0 million in 2006. Full year revenue came in at £21.2 million, up seven per cent from £19.9 million in 2006.

Sales at the vendor's wealth management unit rose to £3.4 million in 2007 - compared to £2.4 million in the previous year - and accounted for 16% of group turnover. At its risk management division sales came in at £4.3 million, from £1.9 million in 2006, and accounted for 20% of group turnover in the year.

However sales were down 17% at the vendor's banking systems unit, falling to £9.5 million in 2007 from £11.4 million in 2006. Financial Objects says banking systems sales accounted for 45% of the group's turnover in 2007, compared to 57% in 2006.

Financial Objects appointed John McKee as divisional director of its banking division last October and says the sales team has also been expanded at the unit.

"Although it is likely that the impact of these changes will not be fully felt until the second half of 2008, we are already seeing improvements, particularly in sales prospects," says Financial Objects chairman Paul Fullagar.

The banking sales team is focusing on driving sales to mid-tier banks that are looking to expand businesses and is targeting the growing markets of Southern Africa, Central Europe and the Asian subcontinent, says the vendor.

The company is also expecting to see growth in late 2008 from selling risk management products into the banking sector, especially as banks look to upgrade credit risk management systems.

In light of this, the vendor says its strategy of focusing on certain growth areas and seeking opportunities to cross sell with other divisions, will limit it exposure to the subprime related slowdown.

"The outlook for 2008 is for a further year of progress. While we are mindful of market uncertainties, for the reasons stated above we believe that over the full year we can limit the impact of any slowdown," says Fullagar.

Fullagar says the company has "significantly strengthened" the management team during the year, laying the foundation to continue growing "both organically and by acquisition".

Last October the vendor added Jon Lee to its board as a non-executive director. Lee held the CEO position at London Bridge Software which was acquired by Fair Isaac in 2005.

Financial Objects' last high profile acquisition was risk management vendor Raft in 2006.

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