Neonet announces new financial objective

12/10/2009 6:56 AM EST

Neonet’s revenues consist of transaction revenues from securities trading and license revenues from technology sales. Unlike transaction revenues, the contracted and regularly recurring license revenues do not depend on trading volumes.

“The potential represented by Neonet’s technology offering is considerable and this is a strength because the margin on these services is high. We are of the opinion that our license revenues will rise at least threefold in a few years’ time and will successively cover our fixed cost base. With the support of increased license revenues, Neonet will stand stronger and more stable, even when market conditions are weak,” comments Neonet’s CEO Simon Nathanson.

“Transaction revenues remain a very important revenue stream and our aim here is to further increase the margin. Neonet’s business model, in which increased trading volumes are directly reflected in higher transaction revenues, generates leverage. Institutional clients are moving from being underweighted in equities to becoming more active, which we interpret as a sign that volumes will increase in the future. I am optimistic concerning the future,” Nathanson continues.

The prospects for Neonet remain very favorable, despite the negative effect of the recent market trend. Neonet’s mission is to simplify global trading to enable the company’s clients to capitalize on the increased number of marketplaces and new technical opportunities. Neonet achieves its mission by offering access to the most liquid marketplaces and through technical solutions that make global trading more efficient. Neonet enables Best Execution regardless of marketplace. Demand for the sophisticated technology and trading tools provided by Neonet is expected to increase with respect to both execution services and the Neonet XG software services.

Neonet’s new objective replaces the company’s previous aims of at least doubling operating revenues from the 2007 level (which then amounted to SEK 689 m) and attaining pretax earnings of about SEK 400 m not later than 2011.

“Although we are positioned to achieve our previous objective of pretax earnings of approximately SEK 400 m, it is difficult to specify a distinct time frame for this in the current market climate,” concludes Simon Nathanson.

Neonet discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act.