FRANKFURT (Reuters) - Financial software group GFT Technologies (DE:GFTG) cut its 2016 profit outlook on Thursday due mainly to the impact of the fall in sterling after Britain's vote to leave the European Union.
But the company, which makes just over a third of its sales in Britain, is optimistic the impact of Brexit on the IT sector will fade by the end of this year and that it may provide opportunities for new business.
GFT said that ahead of the referendum some customers had shifted budgets from Britain to the United States and delayed project decisions. Also, currency effects took 2.4 million euros off its first-half earnings before interest, tax, depreciation and amortisation (EBITDA).
"These two effects are temporary," GFT finance chief Jochen Ruetz told Reuters in an interview.
He said he expected customers to get used to the idea that it would take three more years for any regulatory changes related to Brexit to come into play.
"You can't push back investments for three years. That's why we expect that things will normalise around the middle or end of the second half of the year," he said.
In the longer run, Britain's exit from EU could foster growth in the IT business, Ruetz said, as banks in Britain face new national regulation and new sites in the EU may have to be set up to serve clients there.
"That creates additional IT needs that we would happily support," he said.
GFT's revenues in Britain fell by 9 percent to 73.4 million euros in the first six months of the year and contributed to a slowdown in group revenue growth to about 16 percent from a growth rate of 57 percent in the year-earlier period.
The group cut its guidance for full-year EBITDA to 46.50 million euros from 48.50 million.