Patsystems is issuing a trading update for the year ending 31st December 2010.
In our interim statement for the six months ended 30th June 2010 we reported that we had commenced the deployment of our global Application Service Provision ("ASP") solution branded as Patsystem's XConnect and on the 1st November 2010 we announced that an agreement had been signed with Interactive Data 7ticks for connectivity services to our Patsystem's XConnect hub in Chicago.
A number of existing customers have signed contracts to convert to our ASP solution in the second half of the year and there is a high level of interest from both existing and new clients to move to Patsystem's XConnect in 2011.
Further details on our XConnect strategy, the associated capital investment to deploy our global offering, and the expected increase in our recurring revenue base in future years will be reported in our results for the year ending 31st December 2010.
Trading systems revenues are anticipated to be in line with our expectations for the financial year.
As previously announced the Mercado a Término de Buenos Aires ("MATba") has signed a contract to support its strategy of growing business volumes within Argentina and to establish MATba's global presence.
In order to maximise the long term value of new Exchange business contracts, we have altered our fee structure so that we will earn revenue in line with the customer's business success and their future volume growth instead of an upfront one-off licence fee. We fully expect that our revenues over the term of our customer contracts will be materially higher as a consequence of this change.
We also expect to conclude a further Exchange Systems contract and deployment before the year end and for Exchange Systems revenues to be in line with our expectations for the financial year. Exchange Systems revenues would have been ahead of our expectations if we had not decided to change our commercial model.
In our Interim Statement we reported a strong sales pipeline for Risk Informer. However, a combination of the extended decision time customers are taking before concluding their procurement decisions, and a re-prioritisation of projects within investment banks, has led to a number of the opportunities that we were expecting to conclude within 2010 either being deferred to 2011 or cancelled.
We do, however, expect to conclude a Risk Informer deployment with a global investment bank before the conclusion of the financial year but our risk system revenues will be below our previous expectations for the year.
Due to the lower than expected Risk Informer licence revenue in 2010 the Board now expects the adjusted profit for the financial year ending 31st December 2010 to be broadly in line with the result reported for the year ended 31st December 2009.
We expect cash generation to continue to be in line with operating performance and therefore underpin our dividend growth strategy.