Tuesday, 16 September 2008

Phoenix, Fidessa and the Lehman effect

Following on from the article above discussing the effects of the Lehman collapse on the larger, global players and the wider UK SITS market, two of the UK's smaller players were directly affected.

Phoenix IT issued a trading statement yesterday (See Hemscott Phoenix IT says trading cntract with large investmement bank continues ) which may be the first directly related to the Lehman collapse. They have a disaster recovery contractwith an unnamed "large investment bank" - paid until Nov 2008. If it is with Lehman and there doesn't get renewed, that's £4m of revenue gone/to be replaced. Phoenix IT shares lost 8% yesrerday.

George O'Connor (Panmure Gordon) pointed out in his morning note that "Lehmans was 2% of Fidessa revenue. Management, which presented to Panmure sales on 20 August, reiterated that trading was unchanged when we spoke to them yesterday. As customers pay in advance, we are not concerned that Fidessa will be looking for payment for services already provided. Fidessa has many revenue drivers, which remain intact. However we have long argued that IT is late stage - not immune - to the credit crunch and investors need to be mindful of 2009E forecasts more than 2008E."

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