Revenues continue to fall at Financial Objects

Revenues continue to fall at Financial Objects

Banking systems vendor Financial Objects is reporting a 16 per cent fall in turnover for H1 2003, with group revenues falling to £5.7 million from £6.8 million in the same period last year.

Financial Objects made a pre-tax loss of £1.2m in the first six months this year, compared to £1.1m for H1 2002, and a loss per share of 4.44 pence, compared to 2.37 pence a year ago. The firm also recorded an operating loss (before amortisation of goodwill and exceptional items) of £750K.

In a statement, Roger Foster, chairman, Financial Objects, said: "The market conditions which have affected trading over the last few years continued in the first half of this year, resulting in a disappointing financial performance."

Financial Objects issued a statement in June warning of a continued slump in sales of ActiveBank, its component-based retail banking product. ActiveBank revenues declined from £3.2 million in the first half of 2002 to £2.6 million in H1 2003. The company anticipates the decline to continue for the second half of the year.

The vendor's legacy business Ibis also saw a fall in revenues, from £3.6 million for the first half of 2002 to £3.0 million for the first half of 2003. However, the vendor claims that, based on its current order book, this decline should be halted in the second half of the year. Financial Objects says its has won two 'major' contracts for Ibis, together worth nearly £2 million over the next 18 months.

Financial Objects admits that its short term trading outlook for the second half of the year and the first half of 2004 is gloomy, but maintains that its strategy of investing £1.5 million of additional funds over the next 12 months at its ActiveBank division will help build the business longer term. In the meantime, the company will be supported by its Ibis business which it says represents 50 per cent of its revenues.

The group still has considerable cash balances raised from its flotation and says it is able to fund the investment in ActiveBank from its own resources.

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