Lombard Risk Management plc
Lombard Risk Management plc, a company
providing regulatory, risk management and valuation software
for the financial sector, wishes to provide an update on trading
for the year ended 31 March 2007 and on its current prospects.
With regard to the year to March 2007, there was an expectation
set in the chairman’s statement in the interims that
the software business of the Group would revert to profitability
in the second half of the financial year. Although revenue
rose by almost 50% against the previous year, profitability
in the software business was not achieved, and the software
business lost slightly in excess of £400k in the second
half of the year. Substantially all of this loss can be attributed
to the delay in revenue recognition on two signed contracts
which caused a deferral of around £370k of revenue.
The delay on one of these was almost entirely due to regulatory
delays and the other to client issues outside the company’s
control. The revenue from these projects should be recognized
in the current financial year, so the issue is one of revenue
recognition between accounting periods.
The overall trading prospects for the Group in the current
financial year continue to be favourable, in particular the
impact from Basel 2 and the requirement for regulatory reporting
upgrades. We have announced previously that the Group’s
STB Systems subsidiary will be an appreciable beneficiary
of the Basel 2 changes in banking and securities firms’
regulatory reporting requirements to the FSA and other regulators
due to come in during 2008. The Board is now pleased to announce
that, as expected, good and very tangible progress is being
made with its order book for upgrading its customers for Basel
2, as well as winning new business from firms upgrading systems
as a result of Basel 2.
We have for some time been talking about the spin-out of the
independent valuation business. This process continues and
we are in discussions with a number of interested trade buyers.
We will update the market as we have more information.
The Board is confident that based on current prospects and
activity the software business will return to profitability
in the current financial year helped by STB Systems gaining
revenue from Basel 2 and continued growth from the firm’s
Colline product for collateral management. As well as building
on its strong organic revenue growth, which should continue
this year, the Group continues actively to identify and pursue
accretive acquisition opportunities.
Enquires:
John Wisbey
Chairman and CEO
Tel : +44 (0)20 7384 5000
Noble & Company (Nominated Advisors)
Matthew Hall, Director
Tel: +44 20 7763 2200
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