Fidessa fattens up dividend as soft pound boosts sales

13th Feb 2017 07:09

(ShareCast News) - With profits strongly boosted by the weak pound, Fidessa declared both a final and a special dividend as the financial software group said the increased headwinds in its markets during the second half of the year had already begun to reduce.For the calendar year, there FTSE 250 group generated £331.9m revenue, up 12% on a reported basis, or 3% when the benefit of sterling weakness is excluded. The £173.6m in the second half was much stronger than the City's £166m consensus estimate.Profit before tax jumped 25% to £48.8m, or just 1% at constant currencies, with diluted earnings per share up 21% to 92.3p.The board plumped up the final dividend 11% to 28.2p per share and also added a 50p special dividend that takes the total 2016 payout to 92.5p per share.Thanks to strong cash generation, even after these payements, the group will still have a healthy £95.2m cash in the bank.Chief executive Chris Aspinwall said a market already being affected by structural and regulatory drivers began to face new business uncertainty from the political environment."For Fidessa, however, although there was some evidence of stress during the second half of the year as firms took stock of the impact of the Brexit decision and the US election, levels of new business activity generally remained high and, when combined with the weakness of sterling, this enabled us to deliver solid growth for the year as a whole."As anticipated in the 2015 preliminary results announcement, we saw an increased headwind in 2016 as a result of consolidations and closures within our customer base, with this having the largest effect in the second half, particularly with regard to our sell-side derivatives business."However, based on what we can currently see, we expect that this headwind will now start to reduce."He said the business still enjoyed structural and regulatory drivers, though in the UK and US still faced some uncertainty.While Europe is still expected to introduce the MiFID II regulations, including in the UK, Donald Trump continues to threaten to tear up the proposed Dodd Frank red-tape tightening.For 2017 the outlook guidance was for currency revenue growth to be around the same levels seen during 2016, with benefits to come from continues weakness of sterling as over 70% of revenue is derived in non-sterling currencies.