Fidessa’s juggling act of 2012 has continued into the first quarter of 2013, causing the company to warn that growth will be “challenging”. Headwinds from market conditions in the equities space, along with customer attrition and pricing pressure, are offsetting growth in its derivatives and service-based platforms and regional expansion. Combine these factors with continued investment as it shifts to SaaS model, and the net result is that FY13 performance is expected to be similar to 2012 – which was essentially flat compared to FY11 (see here).
Given the level of decline in the equities market – a 20% drop in trading last year – plus what should be the short term effect of the SaaS shift, the provider of high-performance trading, investment management and information solutions to the financial community is doing quite well to maintain flat performance and this is due to its moves to diversify the business. However, the current outlook does not provide much room for manoeuvre and despite seeing a positive flow of funds into equities in Q1, management thinks the equities market still has further to fall. It is hopeful that the sector market will bottom out during 2013 but even if it does happen, the company does not think it will occur in time to have a material effect on FY13 performance. The juggling is set for the rest of the year.