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For the full RNS announcement visit the London Stock Exchange website: RNS number 9166Q17

See coverage on the Financial Times website

LONDON, UK –  26^th October, 2011: Lombard Risk Management plc (LSE: LRM) (“Lombard Risk”), a leading provider of integrated collateral management, liquidity and regulatory reporting solutions for the financial services industry, is pleased to announce its interim results for the six months ended 30 September 2011.

Highlights

• Revenue up 10% on same period last year at £6.4m (2010: £5.8m)
• Significant increase in profit before tax to £1.8m (2010: £0.2m)
• Cash at end of period £1.3m (2010: £1.3m) with no debt (2010: £nil)
• Profitability achieved by both the Regulatory and the Trading and Risk businesses with a particularly strong advance by the Risk business
• Contract for global application of COLLINE® at Société Générale
• Launched latest web-enabled version of regulatory product
• Maiden dividend of 0.03 pence per ordinary share of 0.5p (“Ordinary Share”) paid; interim dividend of 0.02 pence per Ordinary Share approved by the Board in respect of the half year to 30 September 2011 and to be paid on 14 November to shareholders on the register as at 11 November 2011.

Current trading and outlook

• Ongoing demand for COLLINE®: COLLINE® Collateral Management and Clearing software is now the product of choice for two Tier 1 banks with interest shown by a wide range of other banks and financial organisations. 
• Regulatory requirements imposed on financial organisations continue to expand: Significant additional regulatory reform such as Basel III, the Dodd-Frank Act and Solvency 2 should benefit the Company appreciably over the next few years.
• Strong balance sheet: The combination of £1.3m cash position, no debt and good recurring revenues is a solid platform for future organic growth.

Report of Philip Crawford, Non-executive Chairman: ” The rise in profitability in the period is a good outcome, with a particularly strong performance by the collateral and clearing business. The Board continues to see considerable opportunities over the next few years from the areas in which the Company is operating, with the move to clearing of derivatives opening up new revenue streams. In addition, multiple regulatory initiatives, together with a complete refresh of our regulatory technology, offer us significant growth potential. The clear goal is that Lombard Risk will over the next few years be operating in growing markets and at the same time win an increasing market share of those markets.”

Report of John Wisbey, Chief Executive Officer:“I am pleased to report a 10% rise in revenues and a significant rise in profitability for the six month period, as well as a net cash position of over £1.3m at the end of the period. The collateral management business performed particularly well. The rise in revenue was despite the fact that this financial year is a year of comparatively little regulatory change in the UK.

In the collateral and clearing software business, we continued to win contracts for our COLLINE® software both from existing and new customers. Some of the initiatives in this field, such as the move towards central clearing of derivatives and the integration by more banks of their collateral business with their repo and securities lending business, are proving beneficial to the Company. We signed two major deals for our COLLINE® software in the period, one with Société Générale and the other for clearing with the same major Tier 1 German bank with which we announced a contract in April 2009. These contracts together are worth £3.0 million in revenue to the Company in the first two years. We won several other contracts in the period including a large Austrian bank and a life insurance company in the United States, both for COLLINE®, a major European bank for Chinese regulatory reporting and a major US bank for Irish regulatory reporting.

In July the Board was required to make a public statement following an article in a London newspaper that a competitor had approached the Company with an offer valuing it at £40.0m or 20p per share. In the event, while no offer was formally made, it did highlight the fact that at that time the Company’s shares were valued at well below 2 x revenues, whereas M&A activity in our sector has taken place at above 4 x revenues.

The Board considers that the Company’s products are well placed in the current and foreseeable market with an emphasis on collateral and clearing, liquidity and regulatory compliance and related management reporting. The sales pipeline is strong and we have continued to win large deals in Europe despite the troubles of Greece and the Eurozone and the possible need for a number of our customers to raise additional capital to accommodate asset write downs.”

For the full RNS announcement visit the London Stock Exchange website: RNS number 9166Q17

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For more information please contact Rebecca Bond, Group Marketing Director, Lombard Risk: Rebecca.Bond@LombardRisk.com