News blog
FfastFill
- BY: Andrew Hore |
- POSTED: 29/05/2009 |
Trading systems provider FfastFill fared relatively well in 2008-09 given the turmoil in the financial markets.
Contracts were delayed but revenues continued to grow. Executive chairman Keith Todd says that the development phase of the business has been completed but FfastFill will continue to invest in developing its system. Customers have been lost in the past year but when some staff move to new businesses they ask for FfastFill’s systems. The systems can be deployed quickly and new customers generating revenues in a short time period.
FfastFill has developed a system for traders in exchange-traded derivatives. This uses a Software as a Service platform and has been built up through internal development and acquisition. The system covers the front, middle and back offices of traders.
FfastFill reported a loss in the year to March 2009, but that was after the exceptional costs related to cost cutting. Pre-exceptional profits dipped from £231,000 to £202,000 on revenues 27% higher at £14.4m. The amortisation charge for capitalised development costs rose from £493,000 to £834,000.
Existing customers are spending more during the year. The top 20 increased their average spending from £438,000 to £561,000.
Cash generation was less than previous year because a payment of £700,000 was not received until the beginning of April. Net cash fell from £2.32m to £1.66m at the end of March 2009 even though £1m was raised at 6.5p a share in November 2008. This cash is being used to invest in building up the Asian operations. FfastFill capitalised £1.75m of spending on developing its software platform. Next year the figure will be around £1.5m and it should be similar to the amortisation charge.
The 12 month order book is worth £14.2m. That is predominantly revenues from SaaS contracts so it represents a steady flow of regular revenues. Annualised cost savings of £1.5m will show through in the second half of this financial year.
Profits of £1.5m are forecast for the year to March 2010. That puts the shares on a prospective multiple of 14. That could fall to eight if the profits rise to £2.8m in 2010-11.
The business is cash generative even though it is still investing in software development. This could enable FfastFill to pay a dividend in the future. The company will seek approval at the AGM to cancel its share premium account and create distributable reserves which can be used to buy back shares or pay a dividend. Todd did not want to confirm that a dividend will be paid but he appreciates this might attract additional investors and improve liquidity in the shares.
At5.5p a share, FfastFill is valued at £21.8m.
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