The accounts for the first quarter of 2005 show us to be almost exactly on budget for sales, costs and cash. Although, as expected, there is a loss for the quarter, sales are up 16% on the first quarter of 2004 and costs are almost identical with the first quarter of 2004, so that the loss is much reduced. These costs are also very closely in line with the estimates that we made in November 2004, which speaks well of the degree of control that management have established.
More importantly, our budget for the remainder of 2005 shows own-account costs falling in line with the estimates we provided in November 2004. Own-account operating costs should be approximately Â£3 million for the second quarter of 2005, close to those for the second quarter of 2004, which supports expectations of a small âtrading profitâ (profit before exceptional items, amortisation of goodwill, interest and taxation) for the second quarter of 2005.
With much reduced TradeMark costs, we expect the pre-tax result for the second quarter of 2005 to be roughly break-even. This would be an improvement, at the trading profit level, of nearly Â£0.5 million for the second quarter of 2005 over the second quarter of 2004 and nearly Â£800,000 at the pre-tax profit level. This improvement in results is due in part to completing the core engineering phase of the TradeMark platform: we are installing the final beta test version of TradeMark in the first week of May. We are soon rolling out the first products from the Trademark programme: Pro-Mark, the premium front-end that we developed to complement our new platform, is ready to be added to our current platform. Indeed, we are confident that we can deliver wider product capability to our customers because, in addition, we have successfully designed, tested and introduced Reflector, our proprietary market depth technology that has been added to J-Trader as well as Pro-Mark. We have also added performance and resilience enhancements to our current platform and extended our global reach through recent connections to the International Petroleum Exchange (IPE) and the New York Mercantile Exchange (Nymex), giving us a strong foothold in the energy sector.
Other developments include our first customer proposal involving the new TradeMark platform, which we hope will lead to the progressive introduction of TradeMark across our market, and the generation of long-term revenues. The contract with the Tokyo Grain Exchange (TGE), announced in February, and other prospects for new business (both Exchange Systems and Trading Systems), bode well for 2005 and 2006. With the steady start to 2005 and our commitment to contain own-account costs, we look forward to the future with quiet confidence.