LONDON Feb 12 Britain's Royalblue Group Plc
RYB.L, a developer of software for equities trading, posted a
27 percent rise in annual pretax profit and said it intended to
change its name to Fidessa at April's annual general meeting.
The company said on Monday it expected strong growth this
year and may make a large acquisition, although the strength of
sterling could hit results -- 40 percent of Royalblue's revenue
comes from the United States.
The high value of sterling versus the U.S. dollar knocked 4
percent off the company's growth in 2006, Royalblue said.
Royalblue's software provides investment banks and smaller
stockbrokers with share data, broker notes, live pricing and
automation of deals from order to execution.
The firm, which is proposing changing its name the name of
its core trading platform, reported a jump in pretax profit to
14.3 million pounds ($27.9 million) for the year to Dec. 31, in
line with analysts' expectations.
"All of our customers know the Fidessa brand more than they
know the Royalblue brand," said Chief Executive Chris Aspinall
by telephone on Monday.
Revenue increased 27 percent to 94.6 million pounds as the
number of customers increased 50 percent and the user base of
Total Fidessa rose above 10,000.
Royalblue's cash balance increased 54 percent to 40.1
million pounds last year, money it intends to use for
reinvestment and acquisitions, the company said.
It could make a large acquisition, Aspinall said, and is
looking for companies focused on other financial instruments and
with software that could improve existing buy-side functions.
Royalblue also intends to invest to improve derivatives,
buy-side and execution functions.
An outstanding legal dispute with Lava Trading Inc., which
has cost Royalblue 1.5 million pounds, is going back to the
lower courts after the U.S. Court of Appeals said an early
hearing incorrectly interpreted the technical terms.
Lava's claim relates to the concept of displaying prices
from more than one source on a single screen in the United
Aspinall said patent challenges were the cost of doing
business in the U.S. but that the return to the lower courts
after three years was "extremely frustrating".
Royalblue proposed a dividend of 13.1 pence for the period,
up 27 percent from a year ago.
"Its high rating at almost 30 times December 2007 earnings
reflects its unchallenged position as a provider of
best-in-class software," said broker Bridgewell Securities.
But Bridgewell said it preferred British information
technology engineer Aveva (AVV.L), trading at broadly similar
levels, because it is more likely to see near-term upgrades to
Shares in Royalblue were flat at 1087 pence, valuing the
company around 364.7 million pounds.