Despite achieving growth during Q1, the signs are that Fidessa’s growth will slow during 2012, having already experienced slower growth during 2011 compared to the prior year. Challenging financial market conditions continue to act as a drag, which is to be expected. But they will not only impact new sales, they are likely to take out some of Fidessa’s smaller customers through closure or consolidation.
The company took a hit when MF Global, which represented 1.3% of Fidessa’s revenues, went out of business last year. We feel it cannot absorb too many similar experiences without seeing a material effect. Derivatives software-trading company Patsystems ended up being acquired and delisted from AIM in part because of the closure of MF Global (see MF Global adds insult to Patsystems’ injury).
Fidessa is in a stronger position than Patsystems was however. It is extending its derivatives presence and making more use of its infrastructure to deliver more value to the larger customers it is becoming more dependent upon. Both actions are designed to ...