FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) announces its results for the six months ended 31 August 2023.
Strategic progress across the Group led by KX advancing its opportunity in AI
We will host an investor and analyst event in London on 29 November that will detail the AI growth opportunity for KX.
In May 2021 the Board implemented, alongside its accelerated growth strategy, a change in Group structure to enable each of our business units to communicate its value proposition and maximise its growth opportunity. This strategy has been effective and the Group now comprises strong businesses with good competitive positions in large and growing markets. Each has a distinct investment proposition, resulting from their differing operating models, and therefore capital allocation requirements. In light of this, the Board has decided to undertake a preliminary review of the optimal organisational structure and allocation of capital to best position the Group to drive value for shareholders. The review is at an early stage and the Board anticipates the result of this review will be communicated to shareholders not later than publication of the Group’s FY24 results.
Seamus Keating, CEO of FD Technologies, commented: “We have continued to drive strategic progress across the Group in the first half, with KX highlights including the launch of KDB.AI and strong progress with our global partners. We delivered a resilient performance in First Derivative and MRP despite weaker customer demand in their respective markets and will continue to manage these businesses to protect margins while ensuring they are well positioned to grow as demand improves.
In May 2021 we set out plans for additional investment in KX accompanied by ambitious targets that called for rapid acceleration in ARR. Having exceeded these targets in each of the past two years, we stated in May 2023 our belief that additional investment in KX could further accelerate our annual growth rates to 45% plus. The breadth and scale of opportunities within KX, resulting in rapid growth in our pipeline, has convinced the Board that now is the right time to make this additional investment in both product and go-to-market. This investment is a statement of confidence in the prospects for KX and is accompanied by targets that would create significant value for shareholders.”
|Six months to end August||2023||2022||Change|
|(Loss)/profit before tax||(£4.5m)||£1.1m||N/A|
|Reported diluted (LPS)/EPS||(22.2p)||2.9p||N/A|
|Adjusted performance measures|
|Adjusted diluted (LPS)/EPS||(4.3p)||14.2p||N/A|
The Group delivered a resilient performance in H1, with good progress in KX and challenging market conditions in First Derivative and MRP. The growth in our KX pipeline, driven by our partnerships with CSPs and the recent launch of KDB.AI, provide confidence in achieving our target of at least 35% growth in ARR for the full year. In First Derivative, we anticipate similar market conditions through H2 with the efficiency measures taken to date mitigating the impact on adjusted EBITDA, resulting in an H2 revenue and EBITDA performance similar to H1. In MRP we continue to expect to deliver an adjusted EBITDA similar to last year.
At the Group level we expect FY24 revenue to be in the range of £285m to £295m. The additional investment in KX announced today is expected to result in a £9-10m impact to adjusted EBITDA in H2, resulting in FY24 adjusted EBITDA in the range of £24m to £26m.
Looking beyond the current year, we are pleased with the progress and momentum across the Group, particularly in KX where the partnerships with CSPs and launch of KDB.AI provide confidence in the medium-term outlook to accelerate our industry-leading growth rates.
|FD Technologies plc||+44(0)28 3025 2242|
|Seamus Keating, Chief Executive Officer||www.fdtechnologies.com|
|Ryan Preston, Chief Financial Officer|
|Ian Mitchell, Head of Investor Relations|
|Investec Bank plc||+44 (0)20 7597 5970|
|(Nominated Adviser and Broker)|
|Goodbody (Euronext Growth Adviser and Broker)||+353 1 667 0420|
|J.P. Morgan Cazenove (Broker)||+44 (0)20 3493 8000|
|James A. Kelly|
|FTI Consulting||+44 (0)20 3727 1000|
FD Technologies is a group of data-driven businesses that unlock the value of insight, hindsight and foresight to drive organisations forward. The Group comprises KX, which provides software to accelerate AI-driven innovation; First Derivative, providing consulting services which drive digital transformation in financial services and capital markets; and MRP, which provides technology-enabled services for enterprise demand generation. FD Technologies operates from 14 locations across Europe, North America and Asia Pacific, and employs 2,800 people worldwide.
A presentation for analysts will be held at FTI Consulting at 9.30am today, following which a recording of the presentation will be available on the Group’s website.