Raft cuts losses, doubles license fee revenue

Raft cuts losses, doubles license fee revenue

UK financial software house Raft International is reporting a 55% drop in first half operating losses to £0.5 million from £1.2 million a year ago, doubling the number of contract wins from three to six and increasing turnover by 23% to £4.2 million.

The vendor, which has been striving to diversify from its reliance on the cash-strapped investment banking market, says all but one of its new license sales this year has come from the strategically important sectors of operational risk management in banking and credit risk management in the energy markets. Margins have risen by eight per cent to 40% as a result of the increase in license sales.

Introducing the results, Raft chairman David Priestlety says one-third of revenues were generated from operational and credit risk sales.

"The proportion of license fee revenue has more than doubled to 20% compared with the equivalent period last year and it is management's aim to raise this to over 50% in the medium term," he says. "We have, however, managed to retain the revenue contribution from the investment banking sector largely because of our success in selling professional services into that market."

Raft opened an office in Houston in October to market its credit risk management product to the energy market and earlier this month further broadened its channels to market through a partnership agreement with SunGard Energy Systems.

Priestley says the company is selectively hiring into both sales and delivery groups to build on the "encouraging results" of the past six months.

Raft shares were up two per cent in early trading to 12.5 pence.

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