Financial technology company NEX Group PLC (NXG.LN) said Thursday that its third-quarter revenue for financial 2018 rose from the year before, as a boost to its services business outweighed lower market activity.
NEX said its revenue for the three months to Dec. 31 was up 5% on a reported basis, and 3% in constant currencies.
Chief Executive Michael Spencer said a 10% slump in market revenue was caused by low volatility compared with the prior year's volumes in the wake of the U.S. presidential election, but there was a 10% rise in revenue for NEX Optimisation, the post-trade and risk-mitigation unit.
Mr. Spencer said markets have been "noticeably more active" since the beginning of January as foreign exchange volatility increases from historic lows, but said it is too early to assume subdued market conditions have come to an end. The chief executive said the company is on-track to deliver improvement in the NEX Optimisation unit.
The company said that in January it launched its regulatory reporting product for the European Union's updated Markets in Financial Instruments Directive (Mifid II) and has signed more than 380 new contracts, with annualized revenue of more than GBP10 million.
NEX also said that its effective tax rate is expected to fall to between 22% and 24% in its next financial year, down from 26% to 28% in the current year, in the wake of U.S. tax changes. The tax law passed by Congress late last year and signed by President Donald Trump on Dec. 22 includes a reduction of the corporate-tax rate to 21% from 35% and limits the deductibility of corporate interest payments.
Shares at 0829 GMT were up 49 pence, or 8.3%, at 642 pence.