Financial Objects confirms losses, sees little evidence of upturn

Financial Objects confirms losses, sees little evidence of upturn

Reporting little evidence of an upturn in financial software markets, UK-based back office technology supplier Financial Objects has confirmed expectations of trading losses for the six months to end-June 2002.

In a trading update in late April, Financial Objects reported a further deterioration in market conditions, with continuing delays in the conversion of customer prospects and increased price pressure in its core banking technology markets. In particular, the firm noted delays in implementation of its IBIS/S2 software package and an order backlog in the ActiveBank business leading to a likely loss before taxation and goodwill amortisation for the first half of 2002.

In today's update, the company says that losses will be mitigated by a net exceptional credit of approximately £0.4 million that principally arose from the cancellation of future property lease obligations. The company says that it expects to return to profitability in the second half, but warns: "At this point the board has seen little evidence that trading conditions within the financial services software market have improved."

The cash position has strengthened and balances amounted to £16.6 million as at 28th June 2002. The company is assessing a proposal to return surplus cash to shareholders and proposes to make a further announcement on this at the time of the publication of the half-yearly report in August.

Shares in the company rose marginally by 2.5% on the news to 41 pence, but continue to hover around a year low of 38 pence.

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