Interim Results

First Derivatives PLC
22 September 2005



First Derivatives plc (FDP)

Interim results for the six months ended 31st August 2005


22nd September 2005


The principal activities of FDP are the provision of a range of support services
to the investment banking market and the derivatives technology industry and the
provision of its own range of e-business applications.


Financial Highlights

     •   Turnover £2.744 million (2004: £1.722 million) + 59%

     •   Reported Profit before tax £0.651 million (2004: £0.308 million) + 111%

     •   Normalised Profit before tax and amortisation £0.741million (2004:
         £0.398 million) + 86%

     •   Normalised Earnings per share 4.4p (2004: 2.6p) + 69%

Business Highlights

     •    Continued upturn in activity in the first half of the year

     •    Increased staff utilisation in capital markets activities

     •    Further Kx sales to existing and new customers

     •    Momentum carrying forward in the second half of the year


David Anderson, Chairman of FDP commented:

'The growth in business experienced in the second half of the last financial
year continued in the first half of the current year and the outlook for the
full year is extremely encouraging.'

For further information please contact:

First Derivatives       Corporate Synergy      Parkgreen Communications
Brian Conlon            Luke Ahern             Justine Howarth / Victoria Thomas
Managing Director       T: 020 7448 4430       T: 020 7493 3713
T: 028 3025 2242

www.firstderivatives.com




First Derivatives plc (FDP)

Interim results for the six months ended 31st August 2005


CHAIRMAN'S STATEMENT


The Company announces an increased interim pre-tax profit of £0.651 million
compared with £0.308 million in the corresponding period of the previous year.
Revenues were £2.744 million (2004: £1.722 million) and earnings per share
increased by 105% to 3.7p (2004: 1.8p).  Profit before tax and amortisation was
£0.741 million compared with £0.398 million in the corresponding period of the
previous year.

The Board has decided to continue its policy for the time being of only paying a
final dividend.  If trading in the second half reflects the experience in the
first half the Board would anticipate paying a final dividend at an increased
rate to the previous year.

There has been a further increase in our capital markets activity and with the
greater utilisation of staff this has led to a further increase in
profitability. We have recently announced a number of new contracts including
EDS from which we should start to benefit in the second half of the year and
other contracts are currently under negotiation.

The relationship with Kx is strong and there has been a further increase in
sales of Kx products to both existing and new customers.  The Company has a
healthy sales pipeline and it continues to benefit from consultancy work
generated on the back of sales of Kx products.  Further partnership arrangements
are under discussion which if successfully concluded should benefit the Company
in the future.

The e-Business activity has continued at a low level and whilst profitable it is
not anticipated it will be a major profit contributor in the current financial
year.

Other points worth noting which give us confidence in our position include:

  • Significant recurring revenue streams which gives us earnings visibility
  • Strong balance sheet
  • Generation of significant cashflow from our operations
  • In-house R&D is close to commercial exploitation
  • Investing in property to house employees based on site in London and New
    York, in lieu of paying for hotels, helps further strengthen the balance
    sheet

The growth in business experienced in the second half of the last financial year
continued in the first half of the current financial year and the outlook for
the full year is extremely encouraging.


Profit and Loss Account (unaudited)

For the period ended 31 August 2004
                                                  6 months ended 31    6 months ended 31    12 months ended 28
                                                        August 2005          August 2004         February 2005
                                                              £'000                £'000                 £'000

Turnover                                                      2,744                1,722                 3,793

Cost of sales                                               (1,747)              (1,183)               (2,411)

Gross profit/(loss)                                             997                  539                 1,382

Administrative expenses                                       (297)                (255)                 (560)

Other income                                                     23                   45                    55

Operating profit - continuing operations                        723                  329                   877

Interest receivable                                               1                    6                     8

Interest payable and other similar charges                     (73)                 (27)                  (74)

Profit on ordinary activities before taxation                   651                  308                   811

Tax on profit on ordinary activities                          (193)                 (83)                 (242)

Profit on ordinary activities after taxation                    458                  225                   569

Retained profit brought forward                               1,265                  877                   877

                                                              1,560                1,102                 1,446

Dividends paid                                                    -                    -                 (181)
                                                                                           
Transfer from reserves                                            -                    -                     -

Retained profit carried forward                               1,723                1,102                 1,265

                                                              Pence                Pence                 Pence

Earnings per Share
Basic                                                           3.7                  1.8                   4.6




Balance Sheet (unaudited)

As at 31 August 2004
                                                     6 months ended       6 months ended       12 months ended
                                                     31 August 2005       31 August 2004      28 February 2005
                                                              £'000                £'000                 £'000

Fixed Assets
Intangible assets                                               450                  630                   540
Tangible assets                                               2,641                2,191                 2,143
                                                              3,091                2,821                 2,683
Current Assets
Debtors                                                       1,098                  987                 1,046
Cash at bank and in hand                                      1,161                  323                   788
                                                              2,259                1,310                 1,834
Creditors
Amounts falling due within one year                         (1,491)                (863)               (1,109)

Net current assets                                              768                  447                   725

Total assets less current liabilities                         3,859                3,268                 3,408

Creditors
Amounts falling due after more than one year                (1,253)              (1,340)               (1,289)

Provision for liabilities and charges                           (3)                  (5)                   (3)

Net assets                                                    2,604                1,923                 2,116

Share capital and reserves
Called up share capital                                          62                   62                    62
Share premium                                                   819                  759                   789
Profit and loss account                                       1,723                1,102                 1,265

Equity Shareholders' funds                                    2,604                1,923                 2,116




Cash Flow Statement (unaudited)

For the period ended 31 August 2004
                                                  6 months ended 31    6 months ended 31    12 months ended 28
                                                        August 2005          August 2004         February 2005
                                                              £'000                £'000                 £'000

Cash inflow from operating activities                         1,043                 (43)                   617

Return on investment and servicing of finance                  (72)                 (21)                  (66)
Taxation                                                          -                    -                 (160)
Capital expenditure                                           (579)                (297)               (1,318)
Equity dividend                                                   -                (136)                     -

Cash inflow/(outflow) before financing                          392                (497)                 (927)

Financing                                                      (19)                 (28)                   867


Increase/(decrease) in cash in the period                       373                (525)                  (60)




Reconciliation of net cash flow to movement in net debt (unaudited)

For the period ended 31 August 2004
                                                  6 months ended 31    6 months ended 31    12 months ended 28
                                                        August 2005          August 2004         February 2005
                                                              £'000                £'000                 £'000

Increase/(Decrease) in cash in the period                       373                (525)                  (60)
(Increase)/Decrease in debt                                      36                 (79)                    93

Change in net debt resulting from cash flows                    409                (604)                    33
Long term loan                                                    -                (933)                 (932)

Movement in net funds/(debt) in the period                      409              (1,537)                 (899)
Net debt at start of the period                               (622)                  277                   277

Net debt at end of the period                                 (213)              (1,260)                 (622)




Notes to the Interim Results

1.         Basis of Preparation

The results for the six months ended 31st August 2005 are unaudited and have not
been reviewed by the auditors. They have been prepared on accounting bases and
policies that are consistent with those used in the preparation of the financial
statements of the company for the period ended 28th February 2005.

The financial statements contained in this report do not constitute statutory
accounts within the meaning of Section 248 of the Companies (Northern Ireland)
Order 1986 (as amended by Article 12 of the Companies (Northern Ireland) Order
1990). The results for the period ended 28th February 2005 were reported on by
the auditors and received an unqualified audit report. Full accounts for the
period ended 28th February 2005 have been delivered to the Registrar of
Companies.

2.         Dividends

No dividend is proposed for the period ended 31st August 2005.

3.         Earnings per Share

The earnings per share for the six months ended 31 August 2005 has been
calculated on the basis of the profit after taxation.  The calculation of
earnings per share is based on the profit on ordinary activities.   Earnings per
share has been calculated based on 12,390,620 shares outstanding.



4.         Reconciliation of operating profit to net cash inflow from operating
           activities


                                                       6 months ended 31      6 months ended 31       12 months ended
                                                             August 2005            August 2004      28 February 2005
                                                                   £'000                  £'000                 £'000

Operating profit                                                     723                    308                   877
Depreciation on tangible fixed assets                                 42                     19                    69
Amortisation of intangible asset                                      90                     90                   180
Decrease/(increase) in debtors                                      (52)                  (381)                 (445)
(Decrease)/increase in creditors                                     240                   (87)                  (66)
Issue of in the money share options                                    -                      -                     2


Net cash inflow/(outflow) from operating activities                1,043                   (43)                   617



5.         Analysis of net changes in debt during the period


                                                    6 months ended 31       6 months ended 31      12 months ended 28
                                                          August 2005             August 2004           February 2005
                                                                £'000                   £'000                   £'000

            Cash in hand and bank                               1,161                     323                     788
             Bank overdraft                                         -                       -                       -
             Debt due within one year                           (121)                   (234)                   (121)
             Debt due after one year                          (1,253)                 (1,349)                  (1289)

                                                                (213)                 (1,260)                   (622)




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