24 August 2017
Visit http://response.ncr.com

Markit posts double-digit growth in revenue and earnings

11 February 2015  |  2139 views  |  0 Source: Markit

Markit Ltd. (MRKT), a leading global diversified provider of financial information services, today announced financial results under International Financial Reporting Standards (IFRS) for the fourth quarter and full year ended December 31st 2014.

Financial highlights in fourth quarter and full year 2014

Revenue for the fourth quarter 2014 increased 11.3% to $271.4 million, on a constant currency basis up 12.4% comprising organic revenue growth of 8.9% and acquisition related revenue growth of 3.5%
Revenue for the full year 2014 increased 12.4% to $1.065 billion, on a constant currency basis up 10.9% comprising organic revenue growth of 7.8% and acquisition related revenue growth of 3.1%
Adjusted EBITDA grew 15.0% to $124.7 million for the fourth quarter 2014, and grew 15.9% to $488.2 million for the full year 2014
Adjusted EBITDA margin was 46.3% for the fourth quarter and 46.0% for the full year 2014
Adjusted earnings per share, diluted was $0.37 for the fourth quarter 2014, and up 7.1% to $1.51 for the full year 2014

“I am pleased with our strong performance in 2014,” said Lance Uggla, chairman and chief executive officer of Markit. “Our results reflect Markit’s success in helping customers achieve operational efficiencies, comply with changing regulatory and reporting requirements, and manage risk associated with operating in global financial markets. I am particularly pleased by our strong customer retention and our ability to attract new customers in significant numbers.” Mr. Uggla added, "Looking ahead, we will continue to invest in innovative products and service enhancements for our customers, while maintaining a disciplined approach to acquisitions. We believe demand for our products and services will continue to provide us with significant opportunities for profitable longterm growth."

Revenue

Revenue increased by $27.6 million, or 11.3%, to $271.4 million for the three months ended December 31, 2014, from $243.8 million for the three months ended December 31, 2013. On a constant currency basis, our revenue growth was 12.4%, or $30.2 million, for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013.

Organic revenue growth accounted for $21.6 million, or 8.9% of the 11.3% increase in revenue. This was driven by new business wins across our Solutions and Information segments, and increased volumes in our Processing segment during the fourth quarter of 2014.

Acquisitions contributed $8.6 million to revenue growth, or 3.5% of the 11.3% increase in revenue, associated with the acquisitions in our Solutions segment of Markit Corporate Actions, thinkFolio, and CTI, which were acquired in July 2013, January 2014, and July 2014 respectively.

We experienced an adverse movement in exchange rates period-over-period, which decreased our revenue growth by $2.6 million, or 1.1% of the 11.3% increase in revenue.

Operating Expenses

Operating expenses increased by $3.9 million, or 2.9%, to $139.3 million for the three months ended December 31, 2014, from $135.4 million for the three months ended December 31, 2013. As a percentage of revenue, operating expenses decreased from 55.5% for the three months ended December 31, 2013 to 51.3% for the three months ended December 31, 2014. This was largely driven by increased revenue as described above, as well as lower technology costs following the closure of Credit Centre and a small reduction in other expenses.

Exceptional Items

Exceptional costs for the three months ended December 31, 2014 were $33.1 million and included $31.5 million of impairment charges principally related to Markit Analytics within our Solutions segment.

Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA increased 15.0% to $124.7 million for the three months ended December 31, 2014, from $108.4 million for the three months ended December 31, 2013 reflecting growth across all three segments. Adjusted EBITDA in the fourth quarter 2014 also includes Markit’s share of the loss in our KYC joint venture, which is included within our Solutions segment. Adjusted EBITDA margin increased to 46.3% compared to 44.5% for the three months ended December 31, 2013.

Income tax expense

Income tax expense was $19.7 million for the three months ended December 31, 2014, compared to $11.6 million for the three months ended December 31, 2013, an increase of $8.1 million, or 69.8%. Our effective tax rate was 55.6% for the three months ended December 31, 2014, compared to 80.0% for the three months ended December 31, 2013. The decrease in the effective tax rate principally reflects the difference in the exceptional impairment charges in the three months ended December 31, 2014 compared to the three months ended December 31, 2013 which are not deductible for tax purposes.

Adjusted Earnings and Adjusted earnings per share, diluted

Adjusted Earnings for the three months ended December 31, 2014 increased $3.7 million, or 5.7%, to $69.1 million from $65.4 million for the three months ended December 31, 2013. Adjusted Earnings was impacted in the fourth quarter 2014 by an increased tax charge and higher depreciation and amortisation charges related to continued investment in product development and a $1.4 million accelerated amortisation charge associated with changes to the estimated life of certain assets.

Adjusted earnings per share, diluted was unchanged at $0.37 compared to the prior year period. Adjusted earnings per share, diluted was affected by a higher weighted average number of shares, primarily due to option exercises during the period and an increase in the share price compared to the fourth quarter of 2013.

Full year 2014 results

Revenue

Revenue increased by $117.2 million, or 12.4%, to $1,065.1 million for the year ended December 31, 2014, from $947.9 million for the year ended December 31, 2013. On a constant currency basis, our revenue growth was 10.9%, or $102.6 million.

Organic revenue growth accounted for $73.4 million, or 7.8% of the 12.4% increase. This was driven by growth across all our segments, most notably within our Solutions and Information segments due to new business wins.

Acquisitions contributed $29.2 million to revenue growth, or 3.1% of the 12.4% increase in revenue, in relation to the acquisitions in our Solutions segment of Markit Corporate Actions, thinkFolio and CTI, which were acquired in July 2013, January 2014, and July 2014 respectively.

We experienced a favourable movement in exchange rates period-over-period, which increased our revenue growth by $14.6 million, or 1.5% of the 12.4% increase in revenue.

Operating Expenses

Operating expenses increased by $54.1 million, or 10.5%, to $569.2 million for the year ended December 31, 2014, from $515.1 million for the year ended December 31, 2013. As a percentage of revenue, operating expenses decreased to 53.4% for the year ended December 31, 2014 compared to 54.3% for the year ended December 31, 2013.

Exceptional items

Exceptional items for the full year 2014 were $84.9 million, and principally related to $39.5 million of costs associated with our initial public offering in June 2014 and $39.8 million of impairment charges related to Markit Analytics and Credit Centre.

Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA of $488.2 million for the year ended December 31, 2014 increased by $66.9 million, or 15.9%, from $421.3 million for the year ended December 31, 2013 due to increases in Adjusted EBITDA across all of our segments. In addition, the increase in Adjusted EBITDA reflects a net reduction in non-controlling interest of $10.8 million, following the acquisition of the remaining interest in our subsidiary MarkitSERV, LLC in April 2013, offset by an increase in the non-controlling interest related to CTI following its acquisition in July 2014. Adjusted EBITDA margin increased to 46.0% compared to 45.6% for the full year 2013.

Income tax expense

Income tax expense was $56.5 million for the year ended December 31, 2014, compared to $63.7 million for the year ended December 31, 2013, a decrease of $7.2 million, or 11.3%. Our effective tax rate was 25.6% for the year ended December 31, 2014, compared to 30.2% for the year ended December 31, 2013. This decrease in effective tax rate in 2014 primarily reflects the impact of acquisition related deferred tax accounting adjustments.

Adjusted Earnings and Adjusted earnings per share, diluted

Adjusted Earnings for the year ended December 31, 2014, increased $30.6 million, or 12.3%, to $279.0 million from $248.4 million for the year ended December 31, 2013. This was due to the improved financial performance discussed above, partially offset by an increase in non-acquisition-related intangible asset amortisation, reflecting the continued investment in the development of new products and services and an increase in the tax charge, including a $7.5 million tax charge associated with the out of period deferred tax adjustment.

Adjusted earnings per share, diluted increased 7.1% to $1.51 compared to $1.41 for the full year 2013. Adjusted earnings per share for the full year 2014 was impacted by an increase in the weighted average number of shares primarily due to option exercises during the period and reflecting an increase in the share price when compared to the full year 2013.

Fourth quarter 2014 segment results

Information

Revenue in our Information segment grew by $6.3 million, or 5.4%, to $123.2 million for the three months ended December 31, 2014, compared to $116.9 million for the three months ended December 31, 2013, driven by new business wins within the Pricing and Reference Data sub-division offset by the adverse impact of foreign exchange movements across the segment. Organic revenue growth contributed 6.8% of the 5.4% increase in revenue. Adverse movements in exchange rates period-over-period offset this growth and reduced Information revenue growth by 1.4%.

Processing

Revenue in our Processing segment increased by $3.5 million, or 5.4%, to $68.5 million for the three months ended December 31, 2014, from $65.0 million for the three months ended December 31, 2013. This reflects increased revenue in our derivatives processing product, partially offset by a reduction in our loans processing product and the impact of adverse foreign exchange movements. Organic revenue growth comprised 6.2% of the 5.4% increase in revenue. Adverse movements in exchange rates period-over-period reduced Processing revenue growth by 0.8%.

Solutions

Revenue in our Solutions segment increased by $17.8 million, or 28.8%, to $79.7 million for the three months ended December 31, 2014, from $61.9 million for the three months ended December 31, 2013. Revenue growth was driven by new business wins across both the Enterprise Software and Managed Services sub-divisions, in addition to the acquisitions of Markit Corporate Actions, thinkFolio and CTI.

Constant currency revenue growth contributed 29.6% of the 28.8% increase in revenue. Organic revenue growth contributed 15.7% and acquisitions contributed 13.9% of the 28.8% increase in revenue, as a result of the acquisitions of Markit Corporate Actions, thinkFolio and CTI in July 2013, January 2014 and July 2014 respectively. Adverse movements in exchange rates period-over-period reduced by 0.8% the increase in revenue.

Full year 2014 segment results

Information

Revenue in our Information segment increased by $26.9 million, or 5.9%, to $486.5 million for the year ended December 31, 2014, compared to $459.6 million for the year ended December 31, 2013. The revenue increase was largely driven by new business wins within the Pricing and Reference Data sub-division, and the positive impact of foreign exchange movements across the segment. Organic revenue growth contributed 4.4% of the 5.9% increase in revenue. Favourable movements in exchange rates period-over-period contributed 1.5% of the 5.9% increase in revenue.

Processing

Revenue in our Processing segment increased by $19.6 million, or 7.4%, to $284.9 million for the year ended December 31, 2014, from $265.3 million for the year ended December 31, 2013. This reflects higher activity levels in our loans processing and derivatives processing product, as well as favourable foreign exchange movements during the period. Organic revenue growth contributed 5.1% of the 7.4% increase in revenue. Favourable movements in exchange rates period-over-period contributed 2.3% of the 7.4% increase in revenue.

Solutions

Revenue in our Solutions segment increased by $70.7 million, or 31.7%, to $293.7 million for the year ended December 31, 2014, from $223.0 million for the year ended December 31, 2013. Revenue growth was driven by new business wins across both the Enterprise Software and Managed Services sub-divisions, and increased revenue linked to assets under management in the loan market, in addition to the acquisitions of Markit Corporate Actions, thinkFolio and CTI.

Constant currency revenue growth comprised 30.9% of the 31.7% increase in revenue. Organic revenue growth contributed 17.8% and acquisitions contributed 13.1% of the 31.7% increase in revenue, as a result of the acquisitions of Markit Corporate Actions, thinkFolio and CTI in July 2013, January 2014 and July 2014 respectively. Favourable movements in exchange rates period-over-period contributed 0.8% of the 31.7% increase in revenue.

Comments: (0)

Comment on this story (membership required)

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.worldpaymentsreport.comdownload the paper now

Top topics

Most viewed Most shared
Rabobank constructs physical model to understand IT architectureRabobank constructs physical model to unde...
23028 views comments | 48 tweets | 92 linkedin
Barclays pairs banking data with third party apps for SmartBusiness DashboardBarclays pairs banking data with third par...
12221 views comments | 22 tweets | 35 linkedin
Australia regulates digital currenciesAustralia regulates digital currencies
11730 views comments | 21 tweets | 35 linkedin
RBS to bring Silicon Valley to EdinburghRBS to bring Silicon Valley to Edinburgh
11444 views comments | 10 tweets | 8 linkedin
hands typing furiouslyWhy Is Risk Analytics Important?
11007 views 0 | 7 tweets | 1 linkedin