FFastFill (LSE: FFA), the leading provider of Software as a Service (“SaaS”) to the global derivatives community, is pleased to announce interim results for the six months ended 30 September 2010.

Financial Highlights

Operational Highlights

Commenting on the results Keith Todd, Executive Chairman of FFastFill said:

“I am pleased to be able to report a creditable performance in the half year to 30 September 2010. These results reflect the competitive strength of our enhanced SaaS offering, breadth of our geographic reach and operational focus. Following an encouraging first half and looking at our strong order book, we expect to continue to grow and make further progress in the second half and beyond.”

For further information please contact:

FFastFill plc  +44 (0)20 3002 1900
Keith Todd, Executive Chairman
Hamish Purdey, Chief Executive Officer

CanaccordGenuity Limited  +44 (0)20 7050 6500
Simon Bridges

FinnCap  +44 (0)20 7600 1658
Tom Jenkins
Charles Cunningham

Financial Dynamics (Financial PR)  +44 (0)20 7831 3113
James Melville-Ross
Matt Dixon
Emma Appleton

Chairman’s Statement

I am pleased to announce further momentum during the half year, most notably demonstrated by continuing growth in our core SaaS revenues. We have delivered good growth in operating profit and revenue, in spite of the previously announced reduction in income from our then largest customer's decision to withdraw from the client futures broking business. 

The strength of our offering was very much in evidence during the period enabling us to achieve 10 new wins during the half. We also saw good progress in extending our relationships within existing customers, including the recently announced global ABN Amro middle office contract, thereby vindicating our cross selling strategy. I am particularly pleased to note two important wins in Asia during the period including a competitive back office win. Our success in ABN Amro was also due to our ability to offer a global solution including Asia. It is now two years since we announced our Asia strategy so we are delighted to see continued momentum in this region. 

The mix of our business continues to evolve and we have persisted with our strategy to reduce third party licence revenue to focus our attentions on our robust SaaS-led offering. This is having a continued positive impact on our gross margin.

We have continued to invest in expanding our service offering as well as our reach adding a number of new exchanges and clearing houses to our global SaaS infrastructure. This will result in additional revenue opportunities within existing customers as well as provide opportunities to win new customers.

The strategic development of the market is moving in our favour. The well documented shift from Over The Counter (“OTC”) to centrally cleared trading is crystallising. The regulatory environment is becoming clearer and this is opening up medium-term opportunities working with clearing houses and global sell-side institutions, which we are well positioned to take advantage of. In a further sign of the market's evolution, it is interesting to note that we are increasingly approached by Exchanges in emerging markets who see our offering as a means to connect to international markets. 

Following an encouraging first half and looking at our strong order book, we expect to continue to grow and make further progress in the second half and beyond.

Keith Todd CBE
Executive Chairman

Chief Executive Officer’s Review

Introduction
The Company has continued to make good progress in the six months to 30 September 2010. Despite significant structural changes within the customer base, operating profit increased to £0.7m from £0.5m in the comparative period on revenue of £7.3m (2009: £7.0m). Top line SaaS revenue continued to grow, increasing by 8% to £5.5m (2009: £5.1m). Most pleasing was that underlying SaaS growth grew by more than 20%, after removing the effect of a reduction in income resulting from our then largest customer withdrawing from the client futures broking business. The 10 new wins during the period underpin our growth expectations for the current year.

Contract Wins
The Company continued to win good business during the period. In the front office Trade Execution Services (TES) business we won contracts with Bank of Nova Scotia, Societe Generale, Bell Potter and Mitsui Bevan. These wins range in geography, asset classes and locations traded.

In the Middle Office we extended the contract with ABN Amro to further cover additional functionality and geography underlining the benefit of the SaaS based approach and the benefit of the business model. This is also a good example of being able to cross sell regionally within an institution.

In the PTP back office business wins also occurred with Global Prime Partners, Schroders and others. We also extended our customer coverage with cross selling within ProSpreads as well as at First Prudential Markets.

The contract wins in Asia validate our continued investment in our Asian infrastructure during the past 18 months and emphasise the importance of the acquisition of Exchange Technology in June 2007. Looking ahead, we continue to believe that we are well placed to benefit from the growth in the Asian market.

Product Development
We continue to invest heavily in the product and service delivery and feel very ready for the challenges provided by increased volume and additional trading locations.

Front Office
We have added additional connectivity during the period to Singapore Mercantile Exchange, Hong Kong, and in partnership with NewEdge Citic, Chinese markets. We have partnered with Progress Apama on the algorithmic trading side to offer more advanced solutions to customers. We have also extended the geographical reach of the systems to global participants who can connect locally and trade globally using our platforms with very efficient use of global bandwidth. We have also added additional SPAN risk management functionality to the front end trading platform for customers to better manage risk of their client and house positions. We have looked to reduce our third party revenue, rather focusing on our high margin SaaS revenue.

Middle Office
The SEALS platform continues to be very competitively strong. The win at ABN Amro reinforces this as does further load testing done internally and in conjunction with customers. We have tested the system to millions of trade lines per day and the system has handled the demands well. We have continued to expand the geographical coverage and the global deployment alongside that in the front office.

Back Office
The Eclipse product continues to develop and the Over-The-Counter (OTC) opportunity is starting to take regulatory and industry shape. The opportunity will still be a medium term one, however, it potentially significantly expands the addressable market for this product. The recent legislation in the United States along with regulatory moves in Europe indicates that this change will start to have impact on our market. Our equities back office product SAM, continues to expand in functionality and connectivity and the Euroclear single settlement initiative is one specific area that we think will be attractive to new and existing customers.

Operational Priorities
From an operational perspective, the Company continues to invest in its service delivery mechanisms working closely with suppliers to optimise the platform. We are especially focused on power and data centre optimisation alongside redundancy and failover capability. We have invested heavily in all layers of the delivery platform to provide the highest uptime possible from the application all the way down to the physical network. Co-location and proximity solutions from the exchanges and trading venues continue to provide latency improvements for the industry and we continue to monitor these developments. We aim to obtain SAS70 certification during calendar 2011 which will further reinforce our service delivery credentials. SAS70 is a widely recognised auditing standard which represents that a service organisation has had external auditing of its service controls and procedures.

Staff
I would like to thank the staff for their hard work and dedication during the period. This creditable result would not have been achieved without their efforts.

Summary
The competitive strength of our SaaS offering, breadth of geographic reach and operational focus place us in a strong position to continue to grow profitably.

Hamish Purdey
Chief Executive Officer

Financial Review

Total revenue during the period grew by 4% to £7.3m (H1 2009/10: £7.0m). Core SaaS revenue grew by 8% (SaaS growth excluding the reduction in income resulting from our then largest customer withdrawing from the client futures broking business was greater than 20%). Third party revenue fell by £0.4m as planned, which led to a better margin. Revenue from SaaS related work accounted for 75% of total revenue (H1 2009/10: 77%), underpinning the high quality of our recurring revenue base. Our twelve month order book now stands at £14.5m (H1 2009/10: £13.7m), with our SaaS Order Book increasing to £11.8m (H1 2009/19 £10.5m).

Our top 20 customers now account for 68% of total revenue (H1 2009/10: 76%) representing an annualised average for these customers of £0.5m per customer. No single customer was greater than 10% of revenue in the period.

EBITDA for the period was £1.5m (H1 2009/10: £1.5m). The Company recorded an operating profit £0.7m (H1 2009/10: £0.5m). The increase in profitability was achieved through growth in revenue, increased margin and a one-time net benefit of £0.15m of a sale of an investment.

The total operating expenses in the period were £4.9m (H1 2009/10: £4.4m), including an increase in operating investment in the Asia Pacific region of £0.3m. This included communications, data centres and other operating costs.

Amortisation and depreciation remained constant at £1.0m (H1 2009/10: £1.0m). Capital expenditure stood at £1.3m (H1 2009/10: £1.3m) included infrastructure refurbishment, capital spend in Asia and capitalised development.

At 30 September 2010 FFastFill’s net cash position stood at £1.4m (31 March 2010: £2.4m). The reduced cash balance reflects some recent changes to working capital components. These changes include some amendments to customer payment terms which have seen some customers pay less in the way of ‘up front’ fees than has previously been the case. Going forward, it is expected that this effect will be cash neutral and the Board remains comfortable with the Group’s working capital position given the cash generative nature of the SaaS based model.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2010

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for te period ending 30 September 2010

Share premium Account

On 16 September 2009, the Company received a high court approval for the cancellation of its share premium account as the Company had an accumulated deficit on its profit and loss account. The absence of distributable profits meant that the Company was unable to pay dividends. The Resolution, which was proposed as a special resolution, approved the cancellation of the Company`s share premium account, which as at 31 March 2009 amounted to £32,544,145.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for te period ending 30 September 2010

Share premium Account

On 16 September 2009, the Company received a high court approval for the cancellation of its share premium account as the Company had an accumulated deficit on its profit and loss account. The absence of distributable profits meant that the Company was unable to pay dividends. The Resolution, which was proposed as a special resolution, approved the cancellation of the Company`s share premium account, which as at 31 March 2009 amounted to £32,544,145.

A. Reconciliation of net loss to net cash flow from operating activities

2. Significant Accounting Policies

Revenue

Share-based payments

Internally generated intangible assets – software development expenditure

The group considers that the regulatory, technical and market uncertainties inherent in the development of new products and technologies means that the internal software development costs should not be capitalised as intangible assets until the commercial viability of a project is demonstrable and appropriate resources are in place to launch the product. Research and development expenditure prior to this point in time is expensed as incurred.

An intangible asset arising from development is only recognised if all of the following conditions are met:

• The intangible asset is considered to be technically feasible and the project to create it is sufficiently resourced to be capable of completion.
• There is an intention to complete the asset and both the intention and ability to sell it.
• It is reasonably expected that the asset is likely to generate net future economic benefits
• Development costs in relation to the asset can be reliably measured. Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred.

Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses. The expenditure capitalised includes the cost of materials and direct labour. Amortisation is charged to the statement of comprehensive income on a straight-line basis over the estimated useful lives of the products concerned. The amortisation period for development costs incurred on the Group’s development is five years.

3. Segmental Information

Geographical segment

No one customer accounted for more than 10% of the total revenue in the year.

5. Finance costs

6. Exceptional items

The exceptional item including in the half yearly accounts for period ending 30 September 2010, related to one off costs for the restructuring of the management team.

The exceptional item included in the half yearly accounts for period ending 30 September 2009 and year ended 31 March 2010, relates to costs of integrating the two London offices. 

7. Taxation

9. Called up share capital

10. Financial information

The financial information set out in this half yearly report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the six month periods ended 30 September 2010 and 2009 is neither audited nor reviewed. Information relating to the year ended 31 March 2010 is derived from the statutory accounts for that period, which have been reported on by the company’s auditors and delivered to the Registrar of Companies. The auditors’ report on those accounts was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

11. Half yearly dividend

The directors do not intend to declare a half yearly dividend.