Lombard Risk Management plc (AIM: LRM), a leading provider of integrated collateral management and regulatory reporting solutions for the financial services industry, today provides an update on trading for the Company’s financial year ended on 31 March 2016.
The Company is pleased to announce that revenues for the year will be slightly ahead of current market forecasts, primarily as a result of strong revenue growth in the Company’s Regulatory Compliance division.
The year ended 31 March 2016 has been one of substantial change for the Company, with changes in the leadership team and a renewed focus on its core offerings of collateral management and regulatory reporting software. These changes have inevitably come at a price and Lombard Risk has incurred some significant non-recurring additional costs. These costs amount to approximately £2.5m, of which approximately £1.7m relate to non-cash items, including further impairment charges and other provisions. Other costs incurred relate to the transition of the executive leadership team; a full rebranding of the Company’s products and corporate presence; and significant investment in hiring new talent for the sales and product development teams in particular.
The Company expects to report a year-end cash balance of £3.3m and a statutory loss, stated after the non-recurring items referred to above, in region of £2.1m to £2.3m.
Philip Crawford, Chairman of Lombard Risk, commented: “The Board has renewed confidence in the outlook for the Company following the changes that have been implemented throughout the last financial year. This confidence is supported by the signing of a number of significant contracts for new modules of the Company’s COLLINE® product that enable clients to comply with forthcoming regulatory requirements, including IOSCO, together with the formalisation of the Company’s partnership with Oracle to sell AgileREPORTER alongside Oracle’s OFSAA platform. These initiatives will require continued investment into the new financial year as the Company positions itself to take advantage of these and other opportunities.
“The Board looks forward to strong revenue growth in the years ending 31 March 2017 and 31 March 2018 on the back of this targeted investment, but acknowledges that these investments will impact profitability in the short term.”
The Company’s results for the year to 31 March 2016 will be released on 26 May 2016.