AIM-listed market data services provider Knowledge Technology Solutions PLC (KTS) says it made a group loss before tax of £580,283 on turnover of £555,884 in 2006.
The company says it is pursuing a new growth strategy, including developing MiFID and MarketTerminal ON-SITE services. It has raised £1.8 million from share placings to fund these moves.
“We have responded to the continued challenges in the highly competitive financial information subscription services market by implementing a new growth strategy complementing our Market Terminal data service with Market Terminal ON-SITE for institutional clients and by addressing the opportunities arising out of the introduction of MiFID,” says Dr Marc Pinter-Krainer, Chief Executive of Knowledge Technology Solutions.” Although it is early days, we have been encouraged by the response our new strategy and products have generated from prospective customers.”
The new strteagy is intended to reduce the company’s dependence on revenues derived solely from its market data subscription service, MarketTerminal, which addresses an increasingly competitive marketplace.
The comoany says intense competition among vendors of UK market data display applications has exerted pressure on turnover and profit margins for its market data subscription service. As almost all revenues during the period were derived from the Market Termina lmarket data subscription service, the continued competitive environment contributed to an increase in losses of £580,283 (2005: 547,447) and a fall inturnover to £555,884 (2006: 720,278).
The company is continuing to market its Market Terminal service with new sales initiatives, but has discontinued overseas exchange coverage with effect from 1 January 2007. The associated reduction in data costs has already started to take effect in the current half of this financial year. Following negotiations with data suppliers, data cost reductions are expected to generate an estimated net saving in excess of £220,000 per annum.
As part of the new strategy, a recent initiative has been the creation of specific services which address the requirements directly arising from the planned introduction of MiFID.
These services, which are currently being specified and developed, are designed to assist market participants with specific MiFID compliance issues.
A further, separate part of the new strategy aims to leverage the company’s application technology via the introduction of Market Terminal ON-SITE, which enables users to create and deploy their own customised viewing applications.
MarketTerminal ON-SITE uses the same proprietary technology platform as MarketTerminal and can be integrated with a bank’s existing infrastructure.
It is designed to improve the interface between a bank’s internally-originated and derived information and the external data and prices sourced from a plethora of third party suppliers. It is aimed at major international investment banks operating in the City of London.
“We have received encouraging feedback from a number of global investment banks in response to Market Terminal ON-SITE,” says the company in a statement. “The banks have recognised its ability to allow them control of their own data viewing application. It also enables them to benefit from the flexibility, reliability and potentially significant cost reduction which can be achieved when a tailored version of our Market Terminal data display application is deployed within their organisation. We are currently engaged in the evaluation and sales process with several large institutions, including a global investment bank for which we have successfully completed a ‘proof of concept’ initial installation of MarketTerminal ON-SITE.”
The company recently appointed two additional board directors: Richard Last as Chairman and Louise Barton as a non-executive director.