Fidessa margins flatten out in 'difficult' market

Source: Fidessa

Fidessa group plc (LSE: FDSA), provider of high-performance trading, investment management and information solutions for the world's financial community, is releasing its interim management statement for the period from 1st January 2011 to date.

The challenges of uncertain regulation, macroeconomic environment and structural pressure remain within the financial community. However, the quality of Fidessa's products and its leading position in the market have enabled it to continue to sign significant new orders whilst also maintaining existing customers through helping them to manage their costs. These strengths have enabled Fidessa to continue to record good growth since the start of the year.

The recent tragic events in Japan led to the deployment of Fidessa's business continuity plan for its Tokyo operations. Fidessa's data centres have remained fully operational throughout and customers have been supported from interconnected offices in Osaka and Hong Kong. Whilst it is still early in the recovery process, at this point in time the events are not expected to have a material impact on the results for the year.

Overall, markets are still expected to remain difficult for 2011, but Fidessa continues to believe that the constant currency growth in 2011 is likely to be at similar levels to that seen in 2010. However, if the recent relative strength of Sterling continues it is likely to have a small adverse affect on the absolute growth rate. In the preliminary announcement it was noted that a cautious increase in development spending was starting which would result in a slight reduction in the margin in 2011. However, the recruitment market has proven to be more competitive than anticipated and to date hiring has progressed at a slower rate than expected. Therefore, the margin in the first half of 2011 is expected to be similar to that achieved in 2010. The group continues to have a strong balance sheet with strong reserves, no debt, strong cash generation and substantial levels of recurring revenue.

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