The chief executive of FD Technologies, previously known as First Derivatives, claims it’s been a “tough” last trading year for the Newry-based company as it closed the books on its 2024 fiscal year.
Seamus Keating was speaking as the AIM-listed firm reported annual revenues of £248.9 million, which was 2% lower than the previous year’s figure of £296 million, while the company’s losses before taxes broadened to £7.7 million.
A trading update in March had revealed that the group’s revenue performance had been impacted by prevailing macro-economic conditions and some short-term challenges in its industry-leading KX, which is used by F1 teams among others.
That came just weeks after the company, founded by the late Brian Conlon, confirmed that it has embarked on a major restructuring which will see the business broken into three separate firms.
That process has already started, with marketing technology division MRP, the smallest part of the overall FD operation, having merged with CONTENTgine, a US-based provider of B2B technology buyer insights and lead generation, and where FD Technologies will be a minority shareholder at 49%.
The next stage of the planned restructuring will be sale of First Derivative consulting arm, while the main focus will turn to the KX side of the business, which has cemented its position as the world’s best technology in terms of the volume, variety and velocity of data.
No timetable has been set for the completion of the restructure.
According to the company’s latest results in the year to February 29, the KX division saw revenue growth of 12% to £79 million. Recurring revenue also increased by 19% and now represents 86% of KX revenue, up from 81% in the previous year.
The company highlighted that the performance of the KX division was impacted by lower pipeline conversion rates and lengthened sales cycles with “fewer repeatable use cases in newer markets and macroeconomic headwinds.”
Despite the marginal revenue decline, the gross profit of the company was largely on a par with last year £105.7m but its loss per share plummeted from 14.4p to 145.2p. The company’s debts also increased to £14.4m from £3.7m.
The adjusted EBITDA of FD Technologies also went down by 31% to £23 million, due to accelerated investment in KX and lower revenue in First Derivative.
Mr Keating said: “Yes, admittedly it’s been a tough last year, with huge challenged for the business.
“But we made significant strategic progress, and we enter the new year with clarity and focus on the exciting opportunities ahead.”
The company says it expects KX to achieve an annual contract value in the range of £16m to £18m in the ongoing fiscal year.
Mr Keating added: “Looking to FY25, the conclusion of the structure review provides a clear path to value creation for shareholders while the operational improvements, focus on repeatable use cases, and growing opportunity in AI provide confidence that KX will deliver stronger, sustainable growth.”
One of the few homegrown AI players, FD is born out of Northern Ireland and has been a heavy-hitting technological pillar to some of the world’s largest banks and financial institutions for more than 25 years.
The group has 2,600 people at 15 locations across the world, with 1,000 on the island of Ireland, of whom 350 are officed in Newry.
