Charges against staff cuts push FMC into the red

Charges against staff cuts push FMC into the red

Canadian investment technology firm Financial Models Company has narrowed net losses for the year to $0.5 million, from $2 million a year earlier, as an increase in recurring revenues offset a decline in new license sales.

Fourth quarter net earnings showed a loss of $0.1 million as the company incurred a $0.9 million charge for severance costs relating to the lay-off of 25 staff, or five percent of the total workforce. Revenues for the quarter and year ending 28 February remained broadly in line with the previous year's tally at $19.9 million (Q$ 2002: $19.8 million) and $76.3 million (2002: $76.2 million) respectively.

The company experienced an increase in recurring revenue from application services and licence maintenance of 14.1% to $55.9 million from $49.0 million.

"Recurring revenue now represents 73.2% of total revenues," says Stamos Katotakis, president and chief executive officer of FMC. "However, continued declines in worldwide equity markets throughout the year led to decreases in the spending on software and services by the investment management industry."

Non-recurring revenues from licence sales and associated professional services decreased to $20.4 million from $27.2 million.

The company expects overall revenues for the first quarter in the range of $18.0 million to $18.5 million with recurring revenue continuing at current levels.

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