REG - FD Technologies PLC - FY23 trading update

FD TechnologiesAnnouncement

04/04/2023 07:00

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RNS Number : 2186V  FD Technologies PLC  04 April 2023

 

 

4 April 2023

FD Technologies plc

("FD Technologies" or the "Group")

 

FY23 trading update

 

FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) announces a trading
update for the year ended 28 February 2023 ahead of full year results expected
to be announced on 23 May 2023.

 

Our progress was led by KX and First Derivative. As the engine for real-time
analytics in the cloud, KX continues to experience significant, growing
momentum. We are excited by the opportunities arising from its market
position, enabled by the investments made in product and go-to-market.

 

Seamus Keating, Group CEO, said: "KX and First Derivative have performed
strongly, with both revenue and EBITDA ahead of our expectations, as each
business strengthened its market position.

 

KX in particular has made strong commercial and strategic progress, driven by
our market-leading ability to deliver 100x the performance at one tenth of the
cost of alternative solutions. These advantages are particularly compelling
for hyperscale cloud providers, resulting in a range of initiatives which we
are progressing with our partners that provide further confidence in our
outlook.

 

First Derivative also performed strongly and continued to deliver impressive
revenue growth of 18% for the period. We continue to see multi-year strategic
growth drivers that will underpin demand for our services.

 

We have set ourselves ambitious but sustainable growth targets for the years
ahead which will ensure we are focused on driving high-quality recurring
revenue growth from an expanding list of customers across a wide range of
industries, while generating long term value for shareholders."

 

Highlights

 

 ·         Group revenue is expected to be approximately £296m, representing growth of
           12%, despite the strengthening of the dollar against sterling in H2.
 ·         Group EBITDA is expected to be approximately £35m, with strong performances
           at KX and First Derivative offset by a weak demand environment at MRP.
 ·         Strong cash management in H2 resulted in a net cash position at the year end
           of £0.4m, compared to net debt of £7.4m at end August 2022.
 ·         KX delivered a strong performance, ahead of guidance, with revenue of
           approximately £80m and ARR* of £65m, a 39% increase on the prior year.
 ·         Recent KX successes include the general availability of kdb Insights
           Enterprise on Microsoft Azure, the industry's first Data Timehouse, together
           with new customer wins including Syneos Health and PSE, the Polish national
           electricity transmission system operator.
 ·         First Derivative delivered revenue of approximately £174m, representing
           growth of 18%, ahead of our guidance for the year; MRP revenue was
           approximately £41m, a decline of 19%, primarily due to macro-economic
           conditions.

 

Business unit performance

 

KX made significant strategic progress during the year, meeting or beating
every key performance indicator, and increasing our confidence in its
sustainable growth prospects. Over the last year, incremental annual contract
value (ACV)** almost doubled to £19m and ARR grew by 39%, highlighting our
sales success during the period. We broadened and deepened our strategic
partner base, added significant new customers across our target markets,
continued to make kdb easier to adopt and use - driving improved time-to-value
to attract new customers - and made significant enhancements to our
go-to-market strategy.

 

Throughout the year, we have seen an increasing proportion of new bookings
from our initiatives with our partners, particularly the hyperscale cloud
vendors. We also recently announced the general availability of kdb Insights
Enterprise on Microsoft Azure, a watershed moment in our strategic partnership
with Microsoft, as we work to enable companies in all sectors to access the
power of kdb for enhanced operational and commercial outcomes.

 

First Derivative had another strong year with both revenue and EBITDA ahead of
our expectations. We believe that the business is well-positioned to deliver
sustainable double-digit revenue growth and margin improvement.

 

MRP, which represents 14% of our revenue, continued to experience a weaker
demand environment through the year. We took further action to align the cost
base during H2, which will benefit the current year.

 

Outlook

 

Our mission in KX is to accelerate the speed of data and AI-driven business
innovation across all enterprises through real-time analytics, with kdb as the
engine that enables the processing and analysis of time series and machine
data for smarter decision making wherever that is a critical business
requirement.

 

To deliver this goal we are engaged in multiple discussions with existing and
potential new partners and customers on commercial opportunities. The breadth
of these discussions and our confidence in our prospects underpins our FY24
guidance for KX to achieve ARR growth of at least 35%.

 

First Derivative continues to perform well, with revenue growth in excess of
10% expected combined with a meaningful improvement towards our three-year
target of a 15% EBITDA margin. At MRP we expect the lower cost base to deliver
an improvement in EBITDA for the year.

 

*ARR is the value at the period end of recurring software revenue to be
recognised in the next twelve months, formerly defined as 'exit annual
recurring revenue'

**ACV is the sum of customer contracts signed during the period divided by the
number of years in the contract

 

 

Enquiries

For further information please contact:

 

 FD Technologies plc                               +44(0)28 3025 2242

 Seamus Keating, Chief Executive Officer           www.fdtechnologies.com (http://www.firstderivatives.com)

 Ryan Preston, Chief Financial Officer

 Ian Mitchell, Head of Investor Relations

 Investec Bank plc (Nominated Adviser and Broker)  +44 (0) 20 7597 5970

 Carlton Nelson

 Virginia Bull

 Goodbody (Euronext Growth Adviser and Broker)     +353 1 667 0420

 David Kearney

 Don Harrington

 Finbarr Griffin

 J.P. Morgan Cazenove (Broker)                     +44 (0) 203 493 8000

 James A. Kelly

 Mose Adigun

 FTI Consulting LLP (Financial PR)                 +44 (0) 20 3727 1000

 Dwight Burden                                     FDtechnologies@fticonsulting.com

 Victoria Caton

 

About FD Technologies

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, the leading technology for real-time continuous intelligence;
First Derivative, which provides technology-led services in capital markets;
and MRP, the only enterprise-class, predictive Accounts Based Marketing
solution. FD Technologies operates from 14 locations across Europe, North
America and Asia Pacific, and employs more than 3,100 people worldwide.

 

For further information, please visit www.fdtechnologies.com
(http://www.fdtechnologies.com) and www.kx.com (http://www.kx.com)

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