Web Site : http://www.finobj.com/

Financial Objects is an international supplier of software solutions to the banking, wealth management and energy sectors.

Banking - Financial Objects provides innovative solutions for the retail and wholesale banking sectors
( http://www.finobj.com/our_solutions/banking_solutions.php )

Wealth Management - Financial Objects is a leading developer and supplier of software solutions to the investment community
( http://www.finobj.com/our_solutions/wealth_management_solutions.php )

Energy energycredit is Financial Objects market leading enterprise-wide energy credit risk management solution
( http://www.finobj.com/our_solutions/energy_solutions.php )


Broker Forecasts : (EVO Buy rating)

2007 PTP 2.8m
2007 EPS 6.2p
2007 DIV 1.2p

2008 PTP 3.2m
2008 EPS 7.0p
2008 DIV 1.4p


Major Shareholders :

Slater Investments Ltd = 10.7%
Paul Fullagar (Director) = 10.6%
BlackRock Investment Mgt. = 8.1%
Roger Foster = 6.2%
Gartmore Investment = 5.4%
Rathbones = 3.8%
Third Advance Value Realisation Company = 3.8%


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Earlier buy tip from SmallCapShares :

Buy Financial Objects at 57.5p

Says Small Cap Shares

Financial Objects (FIO) provides software, and services and support for its software, to the banking, wealth management and energy industries. To compliment its primary software products, the company has several software offerings in other markets including property asset management, document management and financial advisory services. Revenues are derived from licence fees for its software and from ongoing annual maintenance fees which are typically 20% of the licence fee. Additional revenues also come from professional services and support. The company has over 600 customers in 40 countries worldwide that use its software, including blue-chips such as Abbey, Siemens and Lloyds TSB, although around two thirds of revenues come from the UK. Customers are served from regional centres located in Europe, Asia and North America and from the companys development centre based in Bangalore, India.

Financial Objects was founded in 1995 and has a strong history of growth through acquisitions. In 1996 IBIS, the international wholesale banking systems business, was bought and integrated into the company giving the enlarged group banking software and services on two major platforms: IBM iSeries and Microsoft Windows. 1999 saw the acquisition of international retail banking systems supplier, Global Financial Systems which extended Financial Objects range of new generation banking solutions and provided an established retail product to complement its existing product suite. Early in 2000, 9000 Limited was acquired along with its risk management products and later in the year Afrocom Technologies, an Indian company based in Bangalore, specialising in developing technology based around the Microsoft platform joined the group. In 2005, the company acquired Wealth Management Software, a provider of a range of investment, property, healthcare and financial adviser management services, cross-industry document and business management solutions and bespoke service capabilities. The most recent deal, in 2006, saw the addition of Raft International to the portfolio and expanded the range of products into the energy sector. In the same year the Danish subsidiary Financial Objects A/S which was acquired as part of the Raft deal and focused on providing software consultants to banks and financial institutions was disposed of so Financial Objects could focus on its core software business.


Financial recently released an excellent set of results for the year ending 31st December 2006. Revenues were up by 43% to 19.9 million, with operating profits up by 130% to 2.3 million and fully diluted earnings of 5.3p up from a loss of 0.5p in 2005. A dividend of 1p per share was paid. The operating margin for the year increased to 12% compared to 7% in 2005 and in the second half of the year it rose to 14%. The balance sheet was strengthened with net cash up by 8% to 2.8 million.

In the next few years the main drivers of growth for the company should be the wealth management and energy sectors. In wealth management, the company believes that there are several thousand target accounts in the UK, with further opportunities in the Middle East, Europe and the US. With any new contract wins there is the opportunity to supply bolt-on services and support to its customers around the sales of its licences which could potentially double the value of any sale made.

In the energy sector, companies have been increasing their IT budgets which provides a new market opportunity for the company, although this is assuming that budget rises continue. In this sector the companys main competitor is the risk management software provider, ROME corporation although it does not have a specific focus on the energy sector. Encouragingly, Financial Objects recently won the contract with Shell mentioned above large against ROME

Financial Objects has said that it wants to grow its revenues up to 50 million in the next three years and acquisitions in the fragmented market will play the lead part in this strategy, as long as they are complimentary and earning accretive. Cash in the bank of 4.1 million combined with strong cash generation puts the company in a good position should any opportunities arise.

Financial Objectives has done well to recover from the spate of profits warnings that it issued in 2002/3 which resulted in a low point in 2003 of pre-tax losses of 12 million. Revenues have steadily grown over the past two years and the company has managed to keep costs under control by relocating all development work to the development centre in Bangalore diversification and diversifying its product offering beyond its banking software. On the back of new contracts and a strong pipeline of sales supported by investment in sales and marketing we are confident of further revenue growth.

As revenues rise the companys operational gearing will kick in, improving the margins and therefore pre-tax profits. Revenues for the year ending 31st December 2007 should be around 22.4 million with pre-tax profits of 2.8 million. Earnings should be around 6.3p. We do not expect the company to pay tax anytime soon due to 11 million of accumulated tax losses. In 2008, revenues should rise to 24.4 million with pre-tax profits of 3.4 million and earnings of 7.4p. That rates the company on a lowly multiple of 7.8 for the year. On a multiple of 14, which is typical for the software sector, we are setting a 2008 price target of 104p which gives 81% upside. BUY

Key Data

EPIC: FIO
Market: Full List
Mid Price: 57.5p

Another earlier write up :

http://www.cambridge-news.co.uk/business/columnists/2007/07/24/dab2bc6d-33ca-49cb-a295-1b97d23332a2.lpf

Private Punter
IT IS often the case, that stocks building up a head of steam, or possessing good momentum are well worth following. Such a chance could well be beckoning in relation to the shares of this weeks subject, a company by the name of Financial Objects. Although the stock has enjoyed a good run over the last twelve months, jumping from 40p to 75p a recent retraction to the current 62p looks to be a good entry point to me.
While being in the software and computer services sector is typically a highly competitive arena, Financial Objects has already demonstrated its ability to deliver and appears set continue in the right direction.
Although to date, much of the growth that has ignited the shares has been fuelled from acquisitions, importantly there has been some solid organic growth to complement this. One the business front, the company is focused on three core markets, made up of Banking, Energy and Wealth Management. Having been set up as recently as 1995 it is the banking market that was the initial target sector and still makes up the majority of sales. In those early days, the company correctly envisaged the future of banking evolving into more internet-based business and set about developing and producing software solutions and services to meet the future market. As a result, it now has a robust business led by products such as activebank which serves both the retail and wholesale Banking Markets. The products serve a wide global market along with clients that include Abbey Life, Bloomberg and Commercial Union, importantly they meet the ever stringent and changing regulations. While the Banking market has been the main target market and enjoys strong repeat revenue, it is the companies other operations which are now fuelling the growth and thus driving the share price. Here, the Energy market is served by providing risk management products and has been boosted by the acquisition last year of Raft International. That business was acquired via a mix of cash and shares which valued Raft at 4m, that would appear to have been a decent purchase as it has already bedded in well. In fact, the energy team and business is growing rapidly and also boasts some big name clients including Shell and American Electric Power. Prior to the purchase of Raft, Financial Objects also acquired another listed company for 5.5m, in the shape of Wealth Management Software Group. Although that company had been struggling, like Raft it has slotted in well and provides products aimed at Pension providers, Offshore Trusts along with what has been the booming property investment market. Although this arm currently makes up less than 14% of the company turnover, the last set of results anticipated strong growth in the coming years. As for those Preliminary results, which were delivered back in March and covered last year, they made good reading. Turnover was up a solid 43% with operating profit doubling to 2.3m, while the Company announced a return to paying dividends. Along with that good news came the announcement that the sales pipeline was strong, new business had been won and there is a handy 4m in cash on the balance sheet. Broker Evolution Securities has a Buy stance on the shares and forecasts 2007 profits of 2.8m rising to 3.2m and EPS of 7p next year. That puts the shares on a forward PER of circa 9, considerably less than the software sector average of 19. While there are some large Institutional shareholders on the register, it is the name of Slater Investments that interests me. Headed by Jim Slater's son Mark it boasts more than 11% of the company.

For base reference after the last move up just now :

L2 is 2 v 1 @59/63 (Only KBC on the offer at 63p)


On Line Limits are :

BUY 10K @ 62.2p

SELL 25K @ 60.25p


And interim results are due tomorrow (Wed 5th September 2007)

For those that have not seen them, the March 2007 Research Notes (Evolution and Edison) can be downloaded or viewed from the following web folder :

http://www.esnips.com/web/PPOtherStuff


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http://www.investegate.co.uk/Article.aspx?id=200709050701483093D

Financial Objects PLC
05 September 2007
Financial Objects plc

Interim results for the six months to 30 June 2007

Financial Objects plc, an international supplier of software solutions for the
banking, wealth management and energy sectors, reports strong growth in revenue and profit.

2007 2006
000 000 Growth
Revenue 10,645 9,378 14%
Operating profit* 1,418 964 47%
Profit before taxation 1,273 872 46%
Basic earnings per share 2.8p 2.1p 33%
Adjusted earnings per share** 3.3p 2.4p 38%


* excluding amortisation of acquired intangible assets
** excluding income tax and amortisation of acquired intangible assets

Within these results, the Group has adopted IFRS reporting for the first time. The restatement of the 2006 comparatives is shown in note 9.

Highlights for the six months ended June 2007:

Continued sales growth, up 14%
Operating profit margin up to 13% (2006: 10%)
Strong operating cash flow of 1.0 million (2006: negative 0.4 million)100
Encouraging number of new client wins


Commenting on the results, Paul Fullagar, Chairman said:

'In our March statement we highlighted a number of new contracts signed within Wealth Management and Energy. This success has been maintained, resulting in a high level of organic sales growth within these two divisions. Operating margins across the Group have now risen to 13%, and operating cash generation remains strong. We are now focused on maintaining this momentum, with the strengthened management team looking for growth both organically and by acquisition.'

Have started following this stock with a view to purchase. Certainly all the fundamentals look appealing, and the company looks very undervalued. Very surprised to see the sp slide to 49.5p, and can't see any reason apart from the general market sentiment to the Financial Sector, even though Financial objects operate in software.

The latest interims look very encouraging, so hopefully when markets calm down a little I will take advantage of unfair rating.

Couldn't resist any longer, just brought in at 47p, seems far too cheap. Nearly all transactions are buys today, so fingers crossed hopefully the start of a turnaround.

Announcement of a new contract win today - see below

Financial Objects announces new contract win in Wealth Management division

Sand Aire licences activebank Wealth Manager


London, 15 October 2007 - Financial Objects plc, an international supplier of
software solutions for the banking, wealth management and energy sectors, (AIM:
FIO), is pleased to announce that it has won a contract to implement its wealth
management software with Sand Aire, a UK-based multi-client family office
specialising in strategic wealth management for families, trusts and charities.


activebank Wealth Manager will be used by Sand Aire to enhance its portfolio
management and client reporting capabilities. The software provides a scalable,
flexible and cost-effective platform that will support Sand Aire's future growth
plans.


Commenting on this contract win, Gary Linieres, Managing Director, Wealth
Management Division, Financial Objects stated:


'We are delighted to announce this deal which was won due to our industry
expertise, leading software and proven track record. We look forward to working
with Sand Aire and providing them with our high quality service.'


Paul Reynolds, Director, Wealth Management, Sand Aire added:

'Having a robust but flexible system is essential to meet the needs of our
clients. We believe that Financial Objects can deliver this and add to our
unique client proposition.'

The sp gained 1p today to 48.5, hopefully it can start to recover from now. It's strange how the price drifted from 60ish to 46, with no reason that I could make out. I have just re-checked the last interims and finals plus all news, and it all looks very positive to me. Also the fundamentals all look very strong.

The sp has steadied now, but I can't help thinking that they are at a real bargain level looking at a 6 to 12 month view. At 80p they would still be on a forward pe of 12.7.

Does anyone have any thoughts to why sentiment has been against the company.

Association with the "finance sector"........

No doubt it is.......... But banks and wealth sector will still need the software, and Energy sector seems to be holding up very well. Hopefully this is a classic contrarian investment, we will see.

Noticed 2.1m shares sold today at 45p 5% of company, should be an announcement in the next few days. The sp has held firm, which at least is a positive sign.

Another news release today which has seen the sp firm 1p to 48.5. See below.

LONDON (Thomson Financial) - Financial Objects PLC said it is planning to announce further wealth management customer wins in the coming months.

Recent contract wins include Concorde Bank, Sand Aire and Hansabank and this momentum is set to continue in 2008, the software company said in a statement.

The company said it has appointed Mark Measham as operations director and Brent Randall as business strategy director of its wealth management division to exploit the accelerating demand for high net worth investment services.

Good start today with sp ticking up 2.5 to 51p, on strong buying.

Financial Objects PLC
24 October 2007

24 October 2007

Financial Objects PLC (the 'Company')

Directors' Share Dealing

The Company was informed on 23 October 2007 that on 23 October 2007 Paul
Fullagar, Chairman of the Company, bought 2,000,000 ordinary shares of 2p each
in the Company ('Ordinary Shares'), representing 4.50 percent of the Company's
issued ordinary share capital. Further to this, Mr Karim Peermohamed, CEO, and
Mr Peter Youngs, FD, have both bought 50,000 Ordinary Shares each representing
0.11 percent of the Company's issued ordinary share capital. All of the
aforementioned Ordinary Shares were bought from Roger Foster, the previous
Chairman of the Company, at 45p. Roger Foster has confirmed in writing to the
Board of the Company that he has no current intention to dispose of any further
Ordinary Shares.

Following these transactions the interests of Mr Fullagar, Mr Peermohamed, Mr
Youngs and Mr Foster are as follows:-

Number of shares % of Issued Ordinary Share Capital

Mr Fullagar 6,800,000 15.3%
Mr Peermohamed 152,000 0.34%
Mr Youngs 150,000 0.34%
Mr Foster 308,273(1) 0.69%


(1): Of Mr Foster's 308,273 Ordinary Shares, 151,522 Ordinary Shares are held
within his pension scheme

Commenting, Paul Fullagar, Chairman, said:

'This demonstrates the confidence the directors have in the company and its
prospects. Following the recent strengthening of the management team, I believe
the company is well positioned to build on recent successes and to enhance
shareholder value over the next few years.'

http://moneyam.uk-wire.com/cgi-bin/articles/200710241652473121G.html

Read the above RNS.

Paul Fullagar, Chairman of the Company, bought 2,000,000 shares.

Mr Karim Peermohamed, CEO, and
Mr Peter Youngs, FD, have both bought 50,000 shares each.

All of the aforementioned Ordinary Shares were bought from Roger Foster, the previous Chairman of the Company, at 45p. Roger Foster has confirmed in writing to the Board of the Company that he has no current intention to dispose of any further Ordinary Shares.

So that's the seller sorted out, in fact he only has 308,000 shares remaining, half of which are in his pension scheme.

affc21 Thank you for the information, the city seems to like the news with sp up 5.5p now to 54p. This could be the start of a rerating now. imho.