Derivatives software house Patsystem is reporting a five-fold increase in losses over the past nine months, from one million pounds last year to £5 million this year, against increased spending on marketing and product development. Revenue almost quadrupled to £1.7 million for the nine-month period, from £427,000 a year earlier.
Patsystems reports five new clients in the third quarter, in line with previous growth rates. "More importantly many of our clients are now starting to sign their own corporate clients, laying the foundations for accelerated end user growth," the company reports.
While billable end users grew 45% in the quarter, from 488 to 709, transactions volumes declined by 5%, a factor attributed to the seasonally slow months of July and August.
Patsystems claims cash reserves of £40 million, giving the company a three-year burn rate at current spending levels. This compares favourably to rival EasyScreen, which also reported losses yesterday, and is seeking further investment to bolster its current cash reserves of £5.6 million.
Both companies are aiming to exploit the move to screen-based trading at the world's largest futures and options exchanges, and are also developing products for retail investors. Patsystems this month introduced a Java-based Internet product for trading new retail oriented contracts such as single stock derivatives.
Patsystems and EasyScreen are both on the radar screens of potential rival, UK-based FfastFill, which made its debut on London's Alternative Investment Market on Tuesday at 120p. The stock closed 18% down yesterday at 102.5p.