First Derivatives plc announces full year results for the year ended 28 February 2021
FD (AIM: FDP.L, Euronext Growth: FDP.I) today announces its results for the year ended 28 February 2021.
Financial Highlights
| Year to end February | 2021 | 2020 | Change |
| Revenue | £237.9m | £237.8m | – |
| Gross profit | £101.0m | £101.1m | – |
| Profit before tax | £11.1m | £18.3m | 39% |
| Reported diluted EPS | 32.0p | 54.2p | 41% |
| Dividend per share | 0.0 | 8.5p | 100% |
| Net debt** | £9.9m | £49.4m | 80% |
| Key performance measures | |||
| Adjusted EBITDA** | £40.5m | £45.5m | 11% |
| Adjusted diluted EPS | 59.0p | 77.4p | 24% |
*Excluding lease obligations
**Adjusted for share-based payments and acquisition and non-operational costs
Business Highlights
- Delivered robust performance despite impact of COVID-19, in line with market expectations, underpinned by the strength of our customer propositions and enabled by high levels of customer retention
- Continued to invest in technology, product and people, reflecting our confidence in our business and the market opportunity
- Strengthened the leadership team across the business, providing the capability to scale the business and capitalize on growing market opportunities
- Momentum increased towards the end of the financial year and continued into FY22 with contract wins across the Group and substantially strengthened pipeline
- Launched KX Insights for cloud-native streaming analytics, generating positive customer reaction and early commercial traction, with major sales campaigns planned during the current year
- Multiple new contracts won in key target markets, with examples across automotive (Williams Racing), energy (major US gas and electricity utility), manufacturing (semiconductor manufacturer), telecoms (leading North American telco) and FinTech (MUFG).
Acceleration of growth strategy and change in Group structure
- New Group structure and focus: Proposed renaming of the Group as FD Technologies plc, comprising three businesses – KX, First Derivative and MRP – to enable each brand to communicate its distinct value proposition for its respective market and maximize its growth opportunity
- Accelerated growth strategy based on growing demand for real-time continuous intelligence and increased ability to deliver following advances in our technology, leadership and commercialization capabilities
- KX at the heart of our propositions: KX will be the focus of investment and our goal is to enable KX to become the market-leading technology for real-time streaming analytics, which represents a $39bn addressable market by 2025 growing at 30% per annum
- Targeting growth in KX exit annual recurring revenue (ARR)* of at least 25% for the current financial year
- Greater focus in First Derivative: First Derivative, which comprises our managed services and consulting business plus elements of our software services revenue, will benefit from sharper focus on target markets where it has the greatest in-depth expertise, and which are areas of key focus for our clients
- Targeting 10% revenue growth for the current financial year
- Driving returns in MRP: MRP will seek to consolidate its position as a market leading digital platform in Account Based Marketing offering the only enterprise class, predictive ABM solution
- Targeting 20% growth in platform revenue for the current financial year
- Strategic investment: Increased investment in the coming years focused on KX, funded through internally generated cash, to accelerate our technology development, increase sales and marketing spend and scale the Group
- Rationale: This evolution of the Group strategy will maximize the potential opportunity addressed by each division and significantly accelerate our growth potential over the medium term, targeting a doubling of revenue by FY25 with a significant bias in growth to recurring software revenue.
Current trading and outlook
- The Board is providing guidance for the current financial year which reflects the improved momentum across the Group’s business units, as well as the cost impact of the investment to accelerate growth
- The Board anticipates that revenue for the year will be in the range of £255m to £260m, with adjusted EBITDA in the range of £31m – £33m.
Donna Troy, Chairman of FD, commented: “Following a detailed review by the Board, informed by growing market opportunities resulting from the increasing capabilities of our technology, we have concluded that now is the time for targeted investment that will accelerate our growth and establish KX as a world-leading horizontal technology for realtime streaming analytics. We are excited to announce this acceleration of our strategy and look forward to delivering enhanced value for our customers and shareholders.”
Seamus Keating, CEO of FD, commented: “Using streaming analytics to inform and automate operational decisions is one of the most important growth areas in technology today, and KX enables this for our customers. During the past year we have positioned the business to scale rapidly to address this opportunity, by accelerating our technology roadmap, strengthening our leadership, developing our commercial strategy and putting in place enhanced systems and processes to scale the Group. By increasing our investment in the business we unlock the potential for rapid growth and for KX to become a key part of tomorrow’s technology ecosystem.”
* Exit annual recurring revenue (ARR) is the value at the end of the accounting period of the software and subscription recurring revenue to be recognized over the proceeding twelve months
For further information, please contact:
First Derivatives plc
Seamus Keating, Chief Executive Officer
Ryan Preston, Chief Financial Officer
Ian Mitchell, Head of Investor Relations
+44(0)28 3025 2242
www.fdtechnologies.com
Investec Bank plc
(Nominated Adviser and Broker)
Andrew Pinder
Carlton Nelson
Sebastian Lawrence
+44 (0)20 7597 5970
Goodbody (Euronext Growth Adviser and Broker)
David Kearney
Don Harrington
Finbarr Griffin
+353 1 667 0420
FTI Consulting
Matt Dixon
Dwight Burden
Darius Alexander
Elena Kalinskaya
+44 (0)20 3727 1000
About FD
FD is a group of data-driven businesses that unlock the value of insight, hindsight and foresight to drive organizations forward. The Group comprises KX, the leading technology for real-time continuous intelligence; First Derivative, a provider of technology-led services in capital markets; and MRP, the only enterprise-class, predictive Accounts Based Marketing solution. FD operates from 15 offices across Europe, North America and Asia Pacific, and employs more than 2,500 people worldwide.
For further information, please visit www.fdtechnologies.com and www.kx.com
Results presentation
FD will publish a pre-recorded presentation today at 07.05 BST on its website at https://fdtechnologies.com/investor-relations/news-results/presentations/. The Group will also host a live results Q&A session for analysts at 09.30 BST today. Further details can be obtained by contacting FTI Consulting
