GL Trade revenue up, despite fall in OTC system sales and slower front-office growth

GL Trade revenue up, despite fall in OTC system sales and slower front-office growth

GL Trade has reported Q3 revenue up 10.5% to EUR162.8m despite its front-office sales being hit in Europe and sales of its Tradix and Sierra solutions falling worldwide.

GL Trade says that accelerated consolidation in the industry and the collapse of hedge funds have made FY09 predictions difficult, and that it is concerned about a slowdown of activity next year.

Sales of the company's software for trading systems and client connectivity were up 4.8% on a like-for-like basis and at constant exchange rates, with sales in this business falling in Europe.

But the company's capital markets business line has been affected worldwide, with a revenue drop of 11.5%. This business line includes the Tradix product it acquired with Ubitrade in 2004, which handles trading, risk management and processing for options and interest and credit derivatives, and the Sierra product it acquired with FNX in 2007, which does the same for foreign exchange and money markets.

This downturn is offset by strong growth in the post-trade area, particularly in solutions for listed derivatives, where revenues grew by 46.4%, and securities, which rose by 15.2%. The information services business line was also up 14.1%, driven by growth of the MarketMap product.

The company says its Asia and Brazil operations recorded very good second and third quarters this year in terms of sales, and will contribute positively to 2008 operations. But it is nevertheless cautious on activity in emerging markets for 2009.

For the full year 2008 the company stands by its organic growth rate target of around 9% on a like-for-like basis and at constant rates. It expects that contract cancellations due to consolidation and defaults in the industry will mainly hit the 2009 order book.

SunGard acquired a 64.51% stake in GL Trade on 1 October. In accordance with the AMF General Regulation ("règlement général de l'AMF"), Paris-based Oddo Corporate Finance has now launched on SunGard's behalf an all-cash tender offer under the simplified procedure ("offre publique d'achat simplifiée") for the remainder of GL Trade's share capital at the same price of EUR41.70 per share.

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