Financial Objects hit by bad debt

Financial Objects hit by bad debt

An £850,000 provision against potential bad debts will drag down final year results at banking software provider Financial Objects, the vendor has warned in a trading statement.

The company says it made the provision in its second-half results following continued liquidity problems at an unspecified client. "This client is an exception to our usual customer profile, being our only client without a banking licence, so the Board is confident that this is an isolated event," states the company.

Revenues in the year to 31 December 2001 are expected to be slightly below the 2000 figure, due to "challenging market conditions", says the vendor. Operating profits - prior to the exceptional provision - are anticipated to be in line with market expectations. The company's share price dropped 12% to £0.73, from an overnight close of £0.83.

In the year to 2000, Financial Objects reported an 18% reduction in turnover and loss before tax of £0.89 million for the year ending December 2000, against a £4.7 million profit in the same period a year earlier.

The company says it remains cash generative and now has ten customers using its new, component-based ActiveBank software. It adds that it has completed the development of all major modules of the IBIS/S2 software, the follow-on product for IBIS users, which have now been delivered to over twenty customers worldwide.

Financial Objects found itself at the centre of seemingly unfounded acquisition speculation last month, as rumours surfaced that it was being stalked by acquisitive financial technology giant Misys.

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