Highlights for the year ended 31st December 2013:
Improving conditions in all customer markets.
Multi-asset revenue more than doubled as derivatives programme bears fruit.
Good base of new derivatives signings including two large banks.
Increased interest in service-based solutions on both the buy-side and the sell-side.
Good international spread, with 57% of total revenue now accounted for outside of Europe.
Growth in recurring revenues, now accounting for 85% of total revenues.
Normal strong cash generation, with £73.0 million cash balance after dividend payments of £30.5 million
Commenting on these results, Chris Aspinwall, Chief Executive, said:
"2013 has seen the first real improvement in the trading conditions faced by our customers since the start of the financial crisis over five years ago. As reported with the interim results, and consistent with the duration and depth of the downturn, this improvement has been somewhat uneven and means that many of our customers are still not able to make investment decisions with confidence. As a result, during 2013 we continued to see some attrition and price pressure although this was at a lower level than that seen during the previous year. Despite this pressure, we have sustained and increased our investment programme, expanding our capabilities across asset classes, services and regions, and continued to win new business. Our success in taking market share has allowed us to grow our important recurring revenues whilst our customers' tight focus on managing discretionary spending has meant that we have seen a reduction in consultancy revenue. As predicted in the interim results, the increase in our investment programme, particularly around our derivatives initiative as we build out our functional offering and roll out our first global platforms, has had a small impact on margin."
Commenting on current trading, Chris Aspinwall continued:
"Coming into 2014, we are seeing continued improvement across the markets in which we operate and this is reflected in our current deal pipeline. As this improvement starts to take effect, it should gradually result in a reduction in the headwinds we face, allowing the growth we are generating through sales of our derivatives platforms, our service-based platforms and our regional expansion to flow through into overall revenue growth rather than being masked by the decline in equities. Whilst we expect to see a positive effect from this in 2014, our recurring revenue model has the effect that some of the impact from the attrition in 2013 will flow through into 2014, and this means that we expect modest constant currency growth in 2014.
Looking further ahead, we believe that as stability and opportunity return to the markets, the headwind reduction, coupled with further openings as our multi-asset initiative gains momentum, will enable us to return to growth levels closer to those we have seen in the past. We remain excited by the potential of our service-based offerings across all asset classes and segments of our market and believe that we will continue to play an important role as customers focus on efficiency, transparency, compliance and performance."
