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The continuing uncertainties and difficult trading conditions in financial markets around the world have put a dent in the growth of Fidessa, although it was in its home territory of the UK that the software player found the going toughest. Shares are down 6% in early trading this morning.
We’d been warned that market conditions would hit Fidessa’s performance during 2012 (see Fidessa warns of lower growth), and so it has proved. H1 revenues of £141.3m were up 3% (or just 2% at constant currency). That compares to 9% and 11% growth in the first halves of 2011 and 2010 respectively. EBIT was up 4%, meaning Fidessa’s EBIT margin edged up very slightly from 15.1% in H1 2011 to 15.3%. Fidessa said it expects the full-year margin "to be slightly below that seen in recent years”.
The big hit came from the UK, where H1 revenues fell by 6%. That compares to 6% growth in the first half of 2011. Other geographies managed to grow, including an 18% revenue rise in Asia. But clearly the UK financial services landscape is suffering particularly acutely from the effects of consolidation and business failures among smaller financial firms, meaning dependent suppliers like Fidessa stand to suffer as well. Management say they see “stability and opportunity returning to the markets” beyond the end of this year. Given that market turmoil has already lasted much longer than anyone expected and appears to be nowhere near a resolution, you have to hope Chief Executive Chris Aspinwall and his team also have a plan B, just in case such stability and opportunity fail to materialise.
