Lombard Risk Management Plc ('the Company')
30th November 2004

Lombard Risk Management plc (“the Group” or “LRM”) today announces its interim results for the period ended 30 September 2004.

Highlights

• Revenues for the half year £ 2.29 million (2003 : £ 2.33 million)
• Loss before tax narrowed to £ 0.38 million (2003 : £ 0.57 million)
• Initial Public Offering completed on London AIM market (London Stock Exchange ticker LRM)

Chairman’s Statement

Summary
The successful IPO of Lombard Risk Management plc on the London AIM market in September 2004 made this a particularly significant period for the Group.

The pre-tax loss narrowed appreciably as a result of tight cost controls, with revenues being comparable to the previous year.

Significant progress was made in two key areas. A development partnership was established to expand the Firmament Credit software product to handle collateralised debt obligations (CDOs). In addition, the Independent Valuation Services initiative was developed using a combination of our software and our data to provide clients with a derivative position valuation service.

Several strategic appointments were made during the period, including a new Director of Sales, which will assist in the execution of the strategic plan for the Group.

Trading
The Group’s revenues were £2.29 million for the half year against £2.33 million in the previous year and £4.53 million in the full year to March 2004. The pre-tax loss narrowed to £0.38 million against £0.57 million in the previous year and £1.21 million for the full year to March 2004. Before exceptional items, the pre-tax operating loss narrowed to £0.19 million. In calculating profitability, R&D was again fully expensed as incurred, as in previous years.

The Oberon software product continued to be profitable, as was the Valuspread managed service. Firmament, the company’s new flagship software product, has initial functionality for credit trading, equity trading and collateral management and will soon also have fixed income capability. Firmament shows promising signs of creating a major recurring revenue stream for the Group.

Software Products
Oberon, the Group’s core software product, recorded its 15th year of profitability, maintaining its position as a cashflow provider for LRM’s other product initiatives. By the beginning of the period the entire customer base had been upgraded to Oberon 5 allowing the support function to be streamlined. In addition, extra functionality was added to Oberon for emerging market bonds and derivatives, increasing the potential new customer base.

Firmament has made further progress from its credit trading base, with an equity module now installed at its first customer site. Initially handling credit default swaps and default baskets, Firmament Credit Trading is now being extended to handle CDOs and other correlation products, and is building up a useful sales pipeline. Firmament Collateral is also attracting a lot of customer interest.

Managed Services and Data
The Valuation Services division continued to build its client base for the Valuspread managed service for credit derivative price verification. This showed a significant increase in the volume of data being managed, and has moved from being a weekly to a daily service. Even the largest banks have difficulty in verifying their traders’ prices, and this service meets many of their regulatory, auditing and line management needs. Valuspread’s client list includes most of the largest trading firms in the credit derivatives market, including JP Morgan Chase, Deutsche Bank, Goldman Sachs, Citigroup, Lehman Brothers, Morgan Stanley and BNP Paribas.

Sales of the resulting data to third parties have continued to grow rapidly, with a 30% increase in the number of credits being made available for public use. Finally, we made headway with services to provide independent third party valuations by combining our credit derivative data and our Firmament software. We believe this has considerable commercial potential for the years ahead.

Investments
The company has a stake of over 3% (5.6 million shares) in its former subsidiary IDOX plc, which is also quoted on AIM. Shares in IDOX have traded in the range 9p – 13p in the last twelve months. The board sees little if any strategic value in retaining this holding, and consequently the board will retain or dispose of the holding based on investment considerations alone.

Financing
The Group raised £1.25 million in the IPO, or £0.99 million after costs of the issue, at a price of 8p per share.

In late November 2004, the Group raised a further £1.1 million at 9p per share from Putnam Lovell NBF, through its parent National Bank Financial Inc. (NBF), a subsidiary of National Bank of Canada. Putnam Lovell is an investment bank that has made other strategic investments in firms that sell to hedge funds or to investors in hedge funds, and the board believes that the association with Putnam Lovell and its network of contacts will bring significant additional benefits to the Group, particularly as it seeks to expand its North American customer base.

Prospects and Conclusion
The directors are encouraged by the build-up in sales pipeline since the sales team was strengthened in the summer and by the increasing interest in our new product offerings. We are cautiously optimistic that the second half of the current financial year will show appreciable revenue growth over the first half and over the comparable period in the previous financial year. Inevitably the investments made as a result of the IPO have also increased the cost base, but our objective is to return to regular monthly profitability within the next 12 months.

Our employees worked very hard over the past year in a period where costs had been cut, and their efforts in helping us achieve our IPO are much appreciated. It was also gratifying that around 40% of our employees decided to invest personally in our shares at the IPO. All employees are being rewarded with share options at strikes of 9p -11p. Our thanks are also due to our customers and suppliers, our advisors and our investors.

It is exciting now to be in position to take the company to the next stage in its development. The growth of the hedge fund market and the credit derivative market, and the need for more infrastructure as both these markets become more mature, should all work in our favour at a time that we have more funds available to invest.

John Wisbey
Chairman & CEO

Consolidated Profit and Loss Account
For the six months ended 30 September 2004

Consolidated Balance Sheet
At 30 September 2004

Consolidated Cash Flow Statement
For the six months ended 30 September 2004

Notes to the Interim Statement

1. Basis of preparation
   The interim results have been prepared under the historical cost convention and in accordance with applicable United Kingdom accounting standards.
2. Interim financial statements
   The above financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The six month figures use the same accounting policies for the period ended 31 March 2004 and have not been audited by the Company’s auditors. The figures for the period ended 31 March 2004 are based upon the latest statutory accounts which have been delivered to the Registrar of Companies. The report of the auditors on these accounts was unqualified and did not contain a statement under Section 237 (2) of (3) of the Companies Act 1985.
3. Dividends
   The Directors do not propose to pay an interim dividend at this time.

Enquiries:

Lombard Risk Management plc:
John Wisbey, Chairman and CEO
Tel : +44 (0)20 7384 5000

Click here to email Lombard Risk's Investor Relations team

Noble & Company Ltd:
Matthew Hall
Tel: +44 (0)20 7763 2200