Shares of financial software and consulting company First Derivatives are lower today after the firm issued its Trading Update. Traders are reacting to an announcement from the firm that a disputed debt has arisen from its 2010 purchase of Cognotec. Cognotec, which had provided software to the FX industry fell victim to bankruptcy in 2010 after key customers ceased using the firm’s products. As a result, shares are 6.1% lower to 577.50p.
For First Derivatives, the firm stated that it is “ robustly pursuing the contracted Payments due, but believes that a significant provision against this debtor in the accounts for the year to 28 February 2013 is prudent at this time. There are no other legacy issues surrounding the business of Cognotec. “ At the time, Cognotec was purchased by First Derivatives for $4.7 million.
In other parts of its report, First Derivatives announced that it had achieved a significant contract in 2012 which is currently in the status of being delivered. The also added "Prospects for the business remain positive and the Company has made a strong start to the new financial year. Further details will be published when the Company reports its results for the year to 28 February 2013, which will be announced on Tuesday 18 June 2013."
