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Royalblue To Change Name, Looking For Acquisitions

Britain's Royalblue, a developer of software for equities trading, posted a 27% rise in annual pretax profit and said it intended to change its name to Fidessa at April's annual general meeting.

The company said on Monday it expected strong growth this year and may make a large acquisition, although the strength of sterling could hit results - 40% of Royalblue's revenue comes from the United States.

The high value of sterling versus the U.S. dollar knocked 4% off the company's growth in 2006, Royalblue said.

Royalblue's software provides investment banks and smaller stockbrokers with share data, broker notes, live pricing and automation of deals from order to execution.

The firm, which is proposing changing its name the name of its core trading platform, reported a jump in pretax profit to 14.3 million pounds ($27.9 million) for the year to Dec. 31, in line with analysts' expectations.

"All of our customers know the Fidessa brand more than they know the Royalblue brand," said Chief Executive Chris Aspinall by telephone on Monday.

Revenue increased 27% to 94.6 million pounds as the number of customers increased 50% and the user base of Total Fidessa rose above 10,000.

Royalblue's cash balance increased 54% to 40.1 million pounds last year, money it intends to use for reinvestment and acquisitions, the company said.

ACQUISITION POSSIBLE

It could make a large acquisition, Aspinall said, and is looking for companies focused on other financial instruments and with software that could improve existing buy-side functions.

Royalblue also intends to invest to improve derivatives, buy-side and execution functions.

An outstanding legal dispute with Lava Trading, which has cost Royalblue 1.5 million pounds, is going back to the lower courts after the U.S. Court of Appeals said an early hearing incorrectly interpreted the technical terms.

Lava's claim relates to the concept of displaying prices from more than one source on a single screen in the United States.

Aspinall said patent challenges were the cost of doing business in the U.S. but that the return to the lower courts after three years was "extremely frustrating".

Royalblue proposed a dividend of 13.1 pence for the period, up 27% from a year ago.

"Its high rating at almost 30 times December 2007 earnings reflects its unchallenged position as a provider of best-in-class software," said broker Bridgewell Securities.

But Bridgewell said it preferred British information technology engineer Aveva, trading at broadly similar levels, because it is more likely to see near-term upgrades to forecasts.

Shares in Royalblue were flat at 1087 pence, valuing the company around 364.7 million pounds.