NEX Group, a financial technology company, grew its group revenue 3% on a constant currency basis, or 5% on a reported basis, in the third quarter ended 31 December.
NEX Markets revenue decreased by 10% on a constant currency basis (9% on a reported basis) as the comparable period included the increased volatility following the US election and the phasing of the CFETS contract revenue recognition.
NEX Optimisation revenue increased by 10% on a constant currency basis (13% on a reported basis). This was underpinned by a strong performance from both the triReduce compression service and the triResolve reconciliation solution, which was partly offset by ongoing trading pressure from Reset as the current interest rate environment continues to deliver low short dated interest rate volatility.
The MiFID II regulatory reporting solution went live on 3 January with more than 380 new contracts with an annualised revenue value of more than £10 million.
The US has enacted a major overhaul of its tax code which includes a reduction in the federal tax rate. Based on preliminary interpretation of the new legislation, NEX's effective tax rate is expected to fall to 22-24% next year from 26-28% this year.
Michael Spencer, group chief executive officer of NEX, said: "Market volatility was low during the quarter in contrast with last year when volumes picked up in the aftermath of the US presidential election. Nevertheless we are making headway with our transformation programme as we continue to reshape NEX for tomorrow's financial markets and reduce costs.
"Since the beginning of January, our markets have been noticeably more active as FX volatility has increased from historic lows. However, it is still too early to assume with any confidence that the previous and prolonged period of subdued market conditions has come to an end. We are meanwhile on track to deliver the expected improvement in NEX Optimisation's operating margin in the second half of the year and these two factors give us confidence in the outlook for the current year."
At 8:31am: (LON:NXG) NEX Group Plc share price was +48.25p at 641.25p