FD
Technologies (LSE: FDP) reported today (Tuesday) a 7% decline in revenue to
£118.2 million for the first half of fiscal year 2025 (H1 FY25), highlighting
ongoing challenges in its business transformation journey. The company’s
financial results revealed mounting pressures on profitability despite stable
gross margins.
FD Technologies Reports
Revenue Decline amid Transformation Efforts
The
technology firm’s adjusted EBITDA dropped 26% to £10.5 million, while net debt
increased significantly to £19.8 million, up 84% from the previous year’s £10.8
million. The company’s bottom line showed a widening loss before tax from
continuing operations of £11.1 million, compared to a £1.6 million loss in the
same period last year.
Despite the
revenue headwinds, FD Technologies maintained its gross profit relatively
stable at £52.1 million, demonstrating resilience in its core business margins.
The company acknowledged an expected churn rate of 8-10% in the current fiscal
year, with improvements anticipated in FY26 and beyond.
The
financial results reflect the company’s ongoing strategic repositioning, with
reported diluted loss per share increasing to 54.6 pence, compared to 22.2
pence in the previous year. Adjusted earnings metrics also showed pressure,
with adjusted diluted loss per share at 8.1 pence, down from a positive 4.4
pence in the comparative period.
Revenue of the Sold First
Derivative Also Declines
FD
Technologies recently announced
plan to sell its First Derivative business to EPAM Systems for £230
million. The transaction, expected to close before year-end, is part of the
company’s strategic move to concentrate on its high-growth KX division, which
specializes in real-time analytics and AI-driven solutions.
First
Derivative’s revenue declined 2% year-over-year to £78.8 million during the
reporting period.
“We have
made significant strategic and operational progress in the first half, with the
divestment of First Derivative and strong execution in KX,” Seamus Keating, the
CEO of FD Technolgoies, commented. “Following the completion of the sale of
First Derivative, we expect to return cash to shareholders, in line with our
disciplined approach to capital allocation, and KX will be a pure-play,
high-growth software.”
Meanwhile,
the KX division saw a 5% revenue growth, reaching £39.5 million. Its annual
contract value (ACV) also increased to £7.4 million, aligning with the
company’s forecasted range of £6–8 million.
Regarding the fiscal year 2024, FD Technologies reported total revenue of
£248.9 million. The KX division showcased robust performance, with revenue
increasing by 12% in constant currencies to £79 million. Recurring revenue
emerged as a key growth driver for KX, rising 19% year-over-year. This
recurring component now represents 86% of the division’s total revenue, up from
81% in the previous fiscal period, underscoring the division’s growing reliance
on stable, long-term revenue streams.
This article was written by Damian Chmiel at www.financemagnates.com.
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