|
The Board of FFastFill plc (LSE: FFA), the leading provider of Software as a Service (“SaaS”) to the global derivatives community, provides the following update on trading for the period ended 30 September 2011.
At the half year, total revenue will be slightly ahead of the prior year. However, operating costs will be higher than initially expected due to increased investment in growth opportunities and current back office installations, and operating profit for the first half will be broadly breakeven.
The Group continues to win new business and has made good progress in replacing revenue lost in the last financial year due to the well documented structural changes in the financial services sector. Headline SaaS growth is expected to be approximately 8% at the half year. During the first half, we are pleased to have won and contracted with two new significant customers and have reached agreement with four additional customers which are now proceeding through contract negotiations.
The Board took a decision during the first half to invest in additional infrastructure and expand the Group’s sales and marketing activity in support of growth opportunities in particular outside the UK. We have also incurred additional costs in support of three back office implementations which are now expected to pass customer acceptance before the end of the calendar year. The associated costs have not been offset by additional revenue within the period and, as a consequence, operating profit for the first half will be broadly break-even.
Management expects to meet its full year revenue expectation. Whilst the additional investment in support of identified growth opportunities is expected to add additional revenue in the medium term, we do not expect to see the full revenue benefit of this in the current financial year due to the nature of SaaS revenue recognition. As a result of the additional investment, operating costs for the full year are expected to be approximately £700k higher than initially expected.
We shall report a net cash outflow in the half resulting from the increased investment in support of growth opportunities, working capital outflows resulting from the timing of some customers’ annual payments and increased working capital tied up in back office implementation projects. Net cash at the end of 30 September 2011 was £1.1m (30 Sept 2010: £1.4m) and we expect to be operating cash generative in the second half of the current financial year.
The integration of Spread Intelligence, acquired by FFastFill during the first half, into our front end trading platform is progressing well and the market reaction to the purchase has been very positive. We anticipate first orders from customers later this financial year. In addition the partnership announced in the first half with WTD Consulting has been well received in the market. The first integrated product deployment is underway.
Our pipeline of prospects is encouraging and we expect additional contract wins in the second half.
The Board expects to report the Group’s half year results on 22 November 2011.
Keith Todd Executive Chairmen said:
“We have continued to compete strongly and win new business, which is a testament to the quality and breadth of our SaaS offering. We have taken the decision to continue to increase our investment globally in order to maximise our medium term growth opportunities. This has had a short term effect on profitability but we are confident of delivering profitable growth for the remainder of the current financial year and believe the investments made in the first half will increase shareholder value in the medium term.”
For further information please contact:
FFastFill plc +44 (0)20 3002 1900
Keith Todd, Executive Chairman
Hamish Purdey, Chief Executive Officer
Mark Carlisle, Chief Financial Officer
FTI Consulting
+44 (0)20 7831 3113
James Melville-Ross / Matt Dixon / Emma Appleton
Canaccord Genuity
+44 (0)20 7050 6500
Simon Bridges / Cameron Duncan
finnCap
+44 (0)20 7600 1658
Tom Jenkins / Charles Cunningham
|
