Trading equipment specialist is a pioneer

By Joanne Hart for The Mail on Sunday
Updated: 12:20 EDT, 9 March 2011

There was a time, not that long ago, when financial markets really did bear some resemblance to street markets.

Traders congregated in a large room, or exchange, and made deals with each other. Communication was fast, loud and face-to-face.

Today's financial markets are very different. Communication is almost always electronic and, even when traders do talk to each other before doing a deal, the trades themselves are consummated electronically.

In this environment, having the right technology is paramount. Large banks and broking firms will handle millions of trades a day, many of them generated by sophisticated computer systems that buy and sell shares or derivatives automatically.

Over the past few years, financial firms have responded to this environment by spending enormous sums of money on their own kit, as well as special data rooms filled with dedicated servers to try and make sure all their trading activity is efficient, effective and as good as everyone else's.

But times are changing – again. As anyone who owns a computer knows, they can be hugely expensive, they go wrong rather a lot and it costs a fortune to repair them.

The latest way round this issue is something called software as a service or SAAS, which allows large companies to use only as much software as they need from a specialist provider.

In the same way as most people who use electricity do not own their own generator, SAAS offers users access to incredibly sophisticated systems without having to own servers and data rooms themselves.

The service is catching on, slowly, and one of the pioneers in the field is Ffastfill.

Ffastfill

Ticker: FFA (aim market)

Contact: 0203 002 1900 or ffastfill.com

Ffastfill offers SAAS to traders around the world, particularly those involved in complex derivatives products where timing and precision are even more essential than in ordinary trades.

Its customers include HSBC, the London Metal Exchange and US banking giant JP Morgan.

Ffastfill is chaired by Keith Todd, who ran the computer group ICL in the late 1990s, transforming the business before it was sold to Fujitsu.

Chief executive is Hamish Purdey, who has spent the past 11 years at Ffastfill, doing a variety of jobs in London, Asia and America.

Electronic trading: Ffastfill is a pioneer in the SAAS field

The company spent several years perfecting its service and, just as it was really making progress, the financial crisis erupted.

Now, however, the group is back on track, gaining new customers and offering more services to existing ones.

In the year to March 2009, Ffastfill made a £400,000 loss. Last year, it turned in a profit of £1.2 million and this year, it is expected to make more than £2.2 million, rising to nearly £3 million in 2012.

It can take time for the company to persuade potential customers that SAAS works as well, if not better, than owning all the technology in-house.

But momentum is building as SAAS is invariably cheaper and more effective than alternatives. Maintenance and after-care are speedy and efficient too, which can be hugely appealing for businesses whose very livelihood depends on their IT being fully functional day in, day out.

Midas verdict: Ffastfill's name is, admittedly, irritating but the company is offering banks a clever new way of managing the technology associated with electronic trading.

The group should grow considerably over the next few years and the shares, currently 10p, should go higher. Buy.