SaaS revenues bolster Ffastfill
05 October 2010 | 2034 views | 0
The Board of FFastFill plc (LSE: FFA), the leading provider of Software as a Service ("SaaS") to the global derivatives community, provides the following update in respect of trading for the six months ended 30 September 2010.
FFastFill expects to report a slightly increased operating profit in the first half compared to the prior comparative period. (H1 10: operating profit £0.5m). This year on year increase is despite the previously announced £0.7m reduction in income resulting from our then largest customer withdrawing from the client futures broking business.
Underlying SaaS revenue has continued to show strong growth both from new and existing customers and has more than offset this reduction. In line with our strategy, we have continued to reduce the amount of low margin third party licence work FFastFill carries out, resulting in improved overall gross margins.
At 30 September 2010 FFastFill's net cash position stood at £1.4m (31 March 2010: £2.4m). The reduced cash balance reflects some recent changes to working capital components. These changes include some amendments to customer payment terms which have seen some customers pay less in the way of 'up front' fees than has previously been the case. Going forward, it is expected that this effect will be cash neutral and the Board remains comfortable with the Group's working capital position given the cash generative nature of the SaaS based model.
Market conditions appear to have further stabilised following the turbulence seen during the financial crisis and we have continued to see the return of decision making which provides optimism. In addition, there has been an increase in new business bid activity and FFastFill has won ten new contracts during the first half which further underpin its financial performance. FFastFill's Asian infrastructure investments have continued to bear fruit with contracts signed in the region for front end trading as well as middle and back office services. Infrastructure rollouts have continued in the region with the successful launch of the Sydney data centre facility.
FFastFill also continues to expect to benefit significantly over the long term from the well documented regulatory shiftsory shifts to central clearing of OTC products and believes this provides an exciting medium to long term growth opportunity for the Company.
As stated at the time of our final results announcement in May our performance is expected to be stronger in the second half. We enter the second half of the year with confidence that we can continue the improvement in our financial performance and management expectations for the full year remain unchanged.
Hamish Purdey, Chief Executive Officer, FFastFill plc commented:
"We are pleased with the considerable progress FFastFill has made during the first half. With market conditions further stabilising, our Asian investments bearing fruit and a healthy pipeline of new business, we enter the second half of the year with confidence as we seek to continue the improvement in our financial performance."
FFastFill will announce its half year results on 24 November 2010.