REG - KRM22 PLC - Final Results
19/05/2025 07:00
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RNS Number : 1185J KRM22 PLC 19 May 2025
KRM22 plc
("KRM22", the "Group" and the "Company")
AUDITED RESULTS STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2024
KRM22 plc (AIM: KRM.L), the technology and software company focused on risk
management in capital markets, announces its audited results for the year
ended 31 December 2024 ("2024", the "Year").
Financial highlights
· Annualised Recurring Revenue (ARR)(( 1 )) as at 31 December 2024 of
£6.6m (2024: £5.4m) - growth of 22.2%
o New contracted ARR in 2024 of £1.7m (2023: £1.1m)
o Total ARR attributable to the relationship with Trading Technologies
International, Inc. ("TT") of £0.9m (2023: £0.4m)
· Total revenue recognised of £6.8m (2023: £5.3m) - growth of 28.3%
· Adjusted EBITDA profit(( 2 )) of £1.0m (2023: loss of £1.4m) - a
maiden reported adjusted EBITDA profit since the Company's inception
· Loss before tax of £1.4m (2023: loss of £4.9m)
· Gross cash as at 31 December 2024 of £1.0m (2023: £0.9m)
Operational highlights
· 12 new ARR contracts signed in the year including 6 new customers
· 44 institutional customers as at 31 December 2024
· Launch of Risk Manager application, with first sales and ARR
generated from this application
· Group restructure and rationalisation to implement a focused cost
savings programme, with annual cost savings of £1.2m delivered
· Board changes with the appointment of Dan Carter as CEO and Garry
Jones as Non-Executive Chairman, replacing Stephen Casner and Keith Todd
respectively, with Keith Todd remaining on the Board as Executive Director
Post year-end events
· Growth in ARR to £7.4m as at the date of this report at current FX
rates
· New contractual ARR in 2025 generated from three cross sales
opportunities to existing customers for the Limits Manager and Risk Manager
applications
· Amendments to the Convertible Loan with Trading Technologies
International, Inc ("TT") to defer all interest payments until June 2026
Garry Jones, Non-Executive Chairman of KRM22, commented: "These 2024 results
demonstrate continued strong growth with significant increases in ARR, in-year
recognised revenue and a maiden year of adjusted EBITDA. We have had a
strong start to 2025 and have never been in a better position, in terms of
momentum and client satisfaction. Our risk management technology and
services are even more essential to our clients in these volatile times, as we
look to expand further in terms of geographical focus and asset class
coverage."
For further information please contact:
KRM22 plc
InvestorRelations@krm22.com
Garry Jones, Non-Executive Chairman
Dan Carter, CEO
Kim Suter, CFO
Cavendish Capital Markets Limited (Nominated Adviser and Broker)
+44 (0)20 7220 0500
Stephen Keys / Isaac Hooper (Corporate Finance)
Sunila de Silva (ECM)
The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 as amended. With the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
About KRM22 plc
KRM22 is a closed-ended investment company which listed on AIM on 30 April
2018. The Company has been established with the objective of creating value
for its investors through the investment in, and subsequent growth and
development of, target companies in the technology and software sector, with a
focus on risk management in capital markets.
Through its investments and the Global Risk Platform, KRM22 helps capital
market companies reduce the cost and complexity of risk management. The
Global Risk Platform provides applications to help address firms' trading and
corporate risk challenges and to manage their entire enterprise risk profile.
Capital markets companies' partner with KRM22 to optimise risk management
systems and processes, improving profitability and expanding opportunities to
increase portfolio returns by leveraging risk as alpha.
KRM22 plc is listed on AIM and the Group is headquartered in London, with
offices in several of the world's major financial centres.
See more about KRM22 at KRM22.com (https://www.krm22.com/) .
CHAIRMAN'S STATEMENT
At the start of 2024, we implemented a focused cost savings programme and also
made changes to the Board with the appointment of Dan Carter and myself as CEO
and Non-Executive Chairman respectively. I am pleased to report that these
changes have led to a marked improvement in financial and operational
performance as we progressed through 2024, with a maiden reported adjusted
EBITDA profit since the Company's inception, and which we continue to progress
in 2025.
We remain focused on continuing to grow our core business, with a substantial
increase in Annualised Recurring Revenue ("ARR") and expansion of services to
new and existing customers being delivered during the year. Our customer
base covers many of the largest banks and brokers in the world as well as
regulators and buy side companies. We are continuing to invest in harvesting
new customers across the market spectrum and we now look forward to broadening
and accelerating our market coverage into new asset classes such as equities,
FX and digital currencies.
The management team of KRM22, under the leadership of CEO Dan Carter and CFO
Kim Suter, has performed in an exemplary fashion, in extremely challenging
markets, and pleasingly our customer satisfaction is at an all-time high.
The Board and I wish to thank our loyal customers and shareholders for their
continued commitment to our long-term vision of delivering high quality
applications and services to the capital markets and derivatives risk
community. The quality of our customers and their importance to the traded
markets gives us much confidence that we are providing much needed solutions
and hitting the mark with industry professionals, who rely on KRM22's
applications and services to add value to their business.
I also want to congratulate the entire KRM22 team globally for another year of
progress, and to recognise their continued hard work and loyalty to the
Company. I look forward to further growth and continued increase in ARR in
2025.
Volatility in the financial system continues to increase, and the new normal
sees an ever-growing focus on risk management. KRM22's applications, which
can add value, transparency and security in uncertain times, are ideally
placed to meet our customers need for state of the art and scalable risk
management systems.
KRM22 has never been in a better position as we progress through 2025 and
beyond and our pipeline of sales opportunities gives us confidence in our
expectations for the year and full year outturn.
Garry Jones
Non-Executive Chairman
CEO'S REPORT
As I reflect on my first year as CEO of KRM22, I do so with great pride,
especially considering what has been a record-breaking year for the Company
with 22.2% growth in Annual Recurring Revenue ("ARR"). We have remained
focused on executing our business strategy, with a continued emphasis on
delivering for our customers and building a new industry-standard set of
applications. This commitment has contributed to our unprecedented growth, a
true testament to our team's dedication and strategic vision. At the same
time, we took decisive steps to optimise our cost structure, ensuring
long-term efficiency and sustainability. These structural enhancements
position us for continued success while enabling us to reinvest in key areas
of the business. Additionally, we have built a robust sales pipeline,
strengthening our foundation for future expansion. KRM22 is positioning
itself as a market leader in Risk Management in capital markets, and we are
excited to continue our growth and achieve our strategic goals of becoming a
cash-generative and profitable business.
Strong revenue growth
KRM22 delivered impressive growth in 2024, achieving a record ARR of £6.6m as
of 31 December 2024, representing a 22.2% increase from £5.4m twelve months
earlier. This growth was driven by £1.7m in new contracted ARR, a
significant rise from £1.1m in the previous year. Notably, £1.2m of this
new ARR was generated through direct sales, while £0.5m resulted from the
continued and strengthening relationship with Trading Technologies
International, Inc. ("TT"). These achievements reflect KRM22's strategic
focus and the value driven by our Global Risk Platform delivering integrated
Risk Management to capital markets firms.
We launched the Risk Manager application at the start of 2024 and new ARR
generated from this application accounted for 48% of our total new ARR in the
year. Meanwhile, Limits Manager and Market Surveillance continued to
experience strength growth with contributions to total new ARR of 31% and 19%
respectively, driven by both new customer acquisitions and existing customers
expanding their engagement with our services.
Our sales pipeline continues to strengthen, led by the seamless integration of
the Limits Manager and Risk Manager applications. This powerful combination
is resonating with both new and existing clients, as they recognise the
enhanced value of a unified risk and limit management solution. New
customers are attracted by the comprehensive functionality and efficiency
gains, while existing customers are expanding their engagement by adopting
both applications to streamline their risk operations and enhance their audit
capabilities. This momentum is creating significant opportunities for
growth, reinforcing our position as a trusted partner for risk management
solutions.
Our Market Surveillance application sales pipeline is gaining momentum through
our strategic partnership with TT. Following the successful completion of
development work in the latter half of 2024, we are now leveraging TT's
extensive market reach to drive adoption among their global client base.
This collaboration enhances our visibility and provides a strong channel for
expanding our customer footprint. With seamless integration into the TT
platform, we are well-positioned to accelerate sales growth and deliver
best-in-class surveillance capabilities to a broader audience.
Cost saving programme
At the start of 2024, we undertook a comprehensive group restructure, an
initiative to drive greater operational efficiency and long-term
sustainability. As part of this effort, we implemented a focused cost
savings programme, streamlining our organisational structure and optimising
resources to enhance productivity. These strategic actions resulted in
annual cost savings of £1.2m, primarily through a reduction in workforce,
reinforcing our commitment to maintaining a lean and agile business while
continuing to invest in growth opportunities. This disciplined approach
ensures we remain well-positioned to deliver value to our stakeholders while
strengthening our financial foundations.
KRM22 risk applications
In 2024 we made significant strides across our application suite, advancing
our mission to deliver risk management solutions that are robust and
adaptive. Risk Manager progressed from proof-of-concept to full production,
now delivering real-time P&L exchange margin, parametrised stress scenario
analysis and integration with the Portfolio Science Risk API for Value at Risk
("VaR"). Limits Manager, having been launched and matured in 2022 and 2023
respectively, saw expanded Exchange Traded Derivative ("ETD") connectivity and
major enhancements to workflow automation - enabling firms to automate limit
changes based on their own risk thresholds. Live risk metrics from Risk
Manager are now directly integrated into Limits Manager, with full audit trail
support, thus allowing for firms to not only see who and what was changed at
any time, but also the standing of the account at the time the change was
approved.
Within Market Surveillance, we completed development of our API layer,
enabling us to embark on a project to build a new web-based GUI and add AI
functionality focussed on monitoring near misses, and this will be launched in
2025. The API layer has also allowed a strategic integration with TT's own
surveillance application enabling TT, in partnership with KRM22, to launch a
best-in-class surveillance solution at the end of 2024 which will drive future
revenue for KRM22 via a revenue share model. The Risk Cockpit saw important
enhancements to incident management, including automated PDF reporting to
improve communication and documentation of risk events.
Looking ahead, we are focused on broadening asset class coverage, particularly
within the Risk Manager and Limits Manager applications, to match the
multi-asset design already present in the Market Surveillance application.
Wider capital markets trends
The broader macro trends in the capital markets industry have seen a
significant shift in focus over the past 15 years. In the ten years that
followed the 2008 financial crisis, regulatory reporting underwent significant
changes, with the goal of enhancing transparency, reducing risk and improving
the stability of the financial system. As a result, capital markets firms
were primarily engaged in ensuring compliance with the regulatory changes.
This was followed by the disruption of the Covid pandemic in 2020 and 2021,
which brought new challenges and operational complexities for businesses. In
a post-pandemic world, we are now seeing firms take a more proactive approach
to risk management, reassessing their processes and systems to ensure they
have best-in-class technology solutions in place.
There is a growing recognition that legacy systems are no longer sufficient in
managing today's dynamic risk landscape. At the same time, regulatory
scrutiny remains high, with fines being issued for errors in risk management
and process failures. This heightened regulatory pressure is driving firms
to refine their procedures, with technology playing a critical role in
enabling greater accuracy, efficiency, and compliance. As a result, the
demand for modern, integrated risk management solutions has never been
stronger, reinforcing the need for continuous innovation in the space and the
benefits that KRM22's applications bring to capital markets firms.
Globally, firms spend approximately £6.0 billion annually on
Software-as-a-Service ("SaaS") risk management software. Even if the total
addressable market for KRM22 is a fraction of this £6.0 billion annual spend,
there is significant opportunity for KRM22's growth, both within existing
asset classes that KRM22 already supports, and within new asset classes that
we are looking to expand into as outlined above.
Outlook
KRM22 delivered an outstanding 22.2% growth in ARR in 2024, reinforcing our
strong market position and momentum toward becoming a cash generative and
profitable business. Limits Manager and Risk Manager are rapidly becoming
the industry standard for risk management, driving increased adoption across
both new and existing clients. Additionally, our partnership with TT has
successfully launched a best-in-class Market Surveillance offering, setting
the stage for significant revenue growth in 2025. With a dedicated team and
a clear strategic vision, we remain focused on innovation, excellence, and
delivering value to our customers. These are truly exciting times for KRM22,
and we are well-positioned for continued success in 2025 and beyond, as
demonstrated by the growth in ARR to £7.4m at the date of this report, with a
strong sales pipeline that underpins our confidence in this year's management
expectations.
Dan Carter
CEO
CFO'S REPORT
From a financial performance perspective, 2024 was the most successful year
since KRM22's IPO in 2018 with significant growth and improvements in all key
financial performance metrics including total revenue recognised, ARR,
adjusted EBITDA and net cash position.
There was growth of 28.3% in total revenue recognised to £6.8m from £5.3m
reported for the year ended 31 December 2023. Growth in ARR continued with a
net increase of £1.2m to end the year at £6.6m from £5.4m at 31 December
2023 - a year-on-year increase of 22.2%. Following the group restructure and
rationalisation programme executed in early in 2024, with annual cost savings
of £1.2m, KRM22 has reported an adjusted EBITDA profit for the year of £1.0m
- the first time it has reported an adjusted EBITDA profit since its
inception. All of this contributed to a closing cash balance of £1.0m
(2023: £0.9m).
Profit and Loss
Total revenue
Revenue recognised for the year to 31 December 2024 was £6.8m (2023: £5.3m),
an increase of 28.3% compared with the prior year, with 92.2% (2023: 90.6%) of
total revenue generated from recurring customer contracts. Non-recurring
revenue for the year ended 31 December 2024 totalled £0.5m (2023: £0.5m) and
related principally to customer implementations, product development and proof
of concept work.
Recurring revenue
ARR is a key metric and KPI for KRM22 and as at 31 December 2024, ARR had
increased by 22.2% to £6.6m (2023: a net increase of 17.4% to £5.4m), a net
increase of £1.2m (2023: net increase of £0.8m).
New contracted ARR in the year totalled £1.7m (2023: £1.1m) of which £0.7m
(2023: £0.6m) was from six new customers, primarily for the Limits Manager
and Risk Manager applications, and £1.0m (2023: £0.6m) was generated from
existing customers. Of the £1.0m of new ARR generated from existing
customers, £0.8m was derived from existing customers purchasing additional
applications and £0.2m was contractual renewals for existing applications,
with increases in ARR value and extensions of contractual length.
The amount of ARR generated through partner products and services, primarily
through data and news feeds, with minimal margin to KRM22, accounted for 4.2%
(2023: 4.6%).
Total churn in ARR for the year was £0.5m of which £0.4m was from three
institutional customers, which included one customer closing downs its
operations. The second customer churn was from a Market Surveillance
customer who, following a public RFP process, decided to contract with an
alternative supplier whilst the third customer was a specific user case that
could not be delivered.
Gross profit
Gross profit for the year to 31 December 2024 was £5.6m (2023: £4.1m).
There was a small increase in gross profit margin to 83% compared to the prior
year margin of 78%.
Capitalised development
A total of £1.1m (2023: £1.1m) of development was capitalised in the year to
31 December 2024. Capitalised development is amortised over three years.
Adjusted EBITDA
Adjusted EBITDA is the key metric that the Company considers in order to
understand the cash-profitability of the business. This is due in particular
to the non-cash items that impact the Income Statement under IFRS accounting,
such as non-cash share-based payment charges and one-off cash items such as
Group reorganisation costs.
Adjusted EBITDA for the year to 31 December 2024 was a profit of £1.0m (2023:
loss of £1.4m). The adjusted EBITDA reported for the year was a significant
improvement on the prior year; driven by the increase in underlying total
revenue recognised in the year, together with the Group restructure plan
actioned at the start of 2024 which implemented a focused cost savings
programme, primarily through a reduction in workforce, with annual cost
savings of £1.2m.
A reconciliation of Adjusted EBITDA profit/(loss) to the reported operating
loss is provided as follows:
2024 2023
£'m £'m
Adjusted EBITDA profit/(loss) 1.0 (1.4)
Depreciation and amortisation (1.2) (1.3)
Impairment of intangible assets - (1.6)
Unrealised foreign exchange loss 0.0 (0.5)
Deferred consideration write back - 0.1
Gain on extinguishment of debt - 0.1
Group restructure costs (0.6) -
Shared-based payment (expense)/credit (0.1) 0.1
Operating loss (0.9) (4.5)
Operating loss
Reported operating loss for the year to 31 December 2024 was £0.9m (2023:
loss of £4.5m) and included one-off costs of £0.6m relating to Group
restructure costs covering redundancy and separation costs associated with the
cost savings programme implemented in January 2024 and separation costs
associated with the Executive changes announced in March 2024.
Finance charges
Net finance expense in the year was £0.5m (2023: £0.4m) and primarily
related to loan interest paid on the TT Convertible Loan.
Taxation
The tax credit in the year was £0.1m (2023: credit of £0.3m) which includes
a £0.1m (2023: £0.2m) R&D tax credit received.
Financial position
Assets
The cash balance as at 31 December 2024 was £1.0m (2023: £0.9m).
Current assets at 31 December 2024 include trade and other receivables of
£0.7m (2023: £1.1m).
Non-current assets were £5.6m (2023: £5.8m) relating principally to: £4.0m
for goodwill and assets acquired (2023: £4.2m) and £1.6m (2023: £1.4m) for
capitalised development costs.
Liabilities
As at 31 December 2024, KRM22's principal liabilities were:
· £4.5m convertible loan owed to TT plus accrued interest of £0.8m.
· £2.8m of deferred revenue; contracted and paid services that will be
released in a future period.
· £0.5m (US$0.6m) deferred consideration for earn out payments for the
acquisition of Object+. The deferred consideration can be satisfied in
either cash or Company Ordinary Shares in KRM22 at the Company's discretion.
· £0.2m (US$0.3m) for the right of use assets relating to all future
payments of leased-office rentals under IFRS16 'Leases' whereby such lease
payments are provided for at today's value. At 31 December 2024, KRM22 did
not have any leased-office rentals remaining under IFRS16 however the
liability relates to an office lease that expired in 2022.
Investors
As an AIM quoted business, a large proportion of KRM22's shareholders are
professional investment funds. In addition, the Directors together owned
3,876,543 shares at the year end, representing 10.8% of the Company's issued
share capital.
Funding
At 31 December 2024, the Company had a £5.0m convertible loan facility (the
"TT Convertible Loan") with TT, the Company's largest shareholder, of which
KRM22 had drawn down £4.5m of the total facility amount. The interest rate
payable on the TT Convertible Loan is the average 90 day Secured Overnight
Financing Rate ("SOFR") and a margin of 5.5%, subject to a minimum aggregate
percentage rate per annum of 9.25%. Interest is payable quarterly in arrears
however KRM22 had the ability to defer interest payments in the initial 18
months (the "Initial Interest Period"), with the total deferred interest in
the Initial Interest Period being due on the calendar quarter ending after the
21(st) month anniversary of the facility, i.e. 31 March 2025. TT can convert
the TT Convertible Loan into new ordinary shares at any time at a conversion
price of £0.46. TT has the right to prevent any conversion which would
trigger a Rule 9 event under the Takeover Code.
The TT Convertible Loan is secured on certain KRM22 assets and includes
covenants based on the Group's financial performance including ARR, revenue
recognition and solvency.
Since the year end, the Company has amended the terms of the TT Convertible
Loan to reduce the total facility to £4.5m, i.e. the value of the loan that
had been drawn down at 31 December 2024, and defer all interest payments in
the initial three year term until the three year maturity date in June 2026.
The deferral of the interest payments conserves cash for the Group over the
next 12 months
Use of cash in the year
Net cash inflow from operating activities in the year was £1.4m, with £1.1m
used for capitalised development.
Going concern
The financial statements have been prepared on a going concern basis based on
a range of cashflow forecasts and scenarios covering a period of at least
twelve months from the date of this report. The time to close new customers
and the value of each customer, which are deemed individually as high value
and low volume in nature, is key to the forecast being achieved. Even if the
forecast is achieved, KRM22 is required to operate within the financial
covenants associated with the TT Convertible Loan. Further analysis of
KRM22's going concern position is detailed in note 2 (notes to the financial
information).
Shareholdings and Earnings per share
As at 31 December 2024, KRM22 had 35,960,729 shares in issue and this was also
the undiluted weighted average number of shares for the period. The
resulting Earning per Share ("EPS") is a 3.6p loss per share (2023: loss of
13.0p). Due to the loss made by the Company in the year, the diluted EPS is
the same as EPS.
Conclusion
The financial performance of KRM22 in 2024, both in terms of the increase in
total revenue recognised by 28.3% and the movement to an adjusted EBITDA
profit of £1.0m from adjusted EBITDA loss position of £1.3m in 2023
demonstrates that KRM22 has made significant progress in moving towards
becoming a profitable business. The growth in ARR to £6.6m at 31 December
2024 which, at the date of this report, has further increased to £7.4m,
together with the significant sales pipeline opportunities, both from direct
selling opportunities and through the TT distribution agreement, puts KRM22 in
a solid position to continue this strong financial performance in 2025 and
beyond as it becomes a cash generative and profitable business.
Kim Suter
CFO
Consolidated income statement and statement of comprehensive income
for the year ended 31 December 2024
Note 2024 2023
£'000 £'000
Revenue 3 6,769 5,266
Cost of sales
(1,167) (1,145)
Gross profit 5,602 4,121
Other operating income 84 142
Administrative expenses (6,566) (8,788)
Operating profit/(loss) before interest, taxation, depreciation, amortisation, 976 (1,399)
share based payment and exceptional items ('Adjusted EBITDA')
Depreciation and amortisation (1,225) (1,298)
Impairment of intangible assets - (1,593)
Group reorganisation costs (561) -
Deferred consideration write back - 115
Gain on extinguishment of debt (net) - 127
Unrealised foreign exchange loss (13) (539)
Acquisition, funding and debt related expenses - (38)
Share based payment (charge)/credit (57) 100
Operating loss (880) (4,525)
Finance charge (net) (547) (353)
Loss before taxation (1,427) (4,878)
Taxation 133 259
credit
Loss for the year (1,294) (4,619)
Loss for the year attributable to:
Equity shareholders of the parent (1,294) (4,619)
(1,294) (4,619)
Other comprehensive income
Item that may be reclassified subsequently to profit and loss:
Exchange (loss)/gain on translation of foreign operations (145) 334
Total comprehensive loss for the year (1,439) (4,285)
Total comprehensive loss for the year attributable to:
Equity shareholders of the parent (1,439) (4,285)
(1,439) (4,285)
Loss per ordinary share
Basic losses per share (3.6p) (13.0p)
4
Diluted losses per share (3.6p) (13.0p)
4
Consolidated statement of financial position
at 31 December 2024
Note 2024 2023
£'000 £'000
Non-current assets
Goodwill 3,485 3,516
5
Other intangible assets 2,128 2,105
5
Property, plant and equipment 19 21
Right of use assets - 136
5,632 5,778
Current assets
Trade and other receivables 773 1,142
Cash and cash equivalents 1,035 886
1,768 2,028
Total assets 7,400 7,806
Current liabilities
Trade and other payables 4,218 3,900
Lease liabilities 249 369
Loans and borrowings 774 391
Derivative financial liability 209 196
5,450 4,856
Net current liabilities (3,682) (2,828)
Non-current liabilities
Loans and borrowings 4,039 3,887
Deferred tax liability 145 164
4,184 4,051
Total liabilities 9,634 8,907
Net liabilities (2,234) (1,101)
Equity
Share capital 3,596 3,567
Share premium 20,737 20,517
Merger reserve (190) (190)
Convertible debt reserve 327 327
Foreign exchange reserve (259) (114)
Share-based payment reserve 2,723 2,945
Retained deficit (29,168) (28,153)
Total equity (2,234) (1,101)
Consolidated statement of cash flows
for the year ended 31 December 2024
2024 2023
£'000 £'000
Cash flows from operating activities
Loss for the year (1,294) (4,619)
Adjustments for:
Tax credit (133) (259)
Net finance expense 547 353
Amortisation of intangible assets 1,081 1,059
Depreciation of property, plant and equipment and right of use assets 144 239
Impairment of intangible assets - 1,593
Deferred consideration write back - (115)
Gain on extinguishment of debt - (127)
Unrealised loss on non-GBP denominated loans 13 539
Equity-settled Share-based payment charge/(credit) 57 (100)
Income taxes received 97 186
512 (1,251)
Decrease in trade and other receivables 409 320
Increase in trade and other payables 502 52
Net cash flows from/(used in) operating activities 1,423 (879)
Cash flows from investing activities
Acquisition deferred consideration payment - (43)
Purchase of intangible assets (1,148) (1,105)
Purchase of property, plant and equipment (7) (16)
Net cash used in investing activities (1,155) (1,164)
Cash flows from financing activities
Lease payments principal (119) (232)
Lease payments interest (3) (18)
Receipts from borrowings - 4,500
Interest paid - (208)
Repayments of borrowings - (3,000)
Net cash (used in)/from financing activities (122) 1,042
Net increase/(decrease) in cash and cash equivalents 146 (1,001)
Cash and cash equivalents at beginning of year 886 1,900
Effect of foreign exchange rate changes 3 (13)
Cash and cash equivalents at end of year 1,035 886
Consolidated statement of changes in equity
for the year ended 31 December 2024
Ordinary Share premium Merger Convertible debt reserve Foreign exchange reserve Share based payment reserve Retained Total equity
shares
reserve
losses
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 3,567 20,517 (190) 224 (448) 3,045 (23,534) 3,181
Loss for the year - - - - - - (4,619) (4,619)
Other comprehensive gain - - - - 334 - - 334
Total comprehensive gain/(loss) - - - - 334 - (4,619) (4,285)
Convertible debt option - - - 103 - - - 103
Share-based payments - - - - - (100) - (100)
At 31 December 2023 3,567 20,517 (190) 327 (114) 2,945 (28,153) (1,101)
Loss for the year - - - - - - (1,294) (1,294)
Other comprehensive loss - - - - (145) - - (145)
Total comprehensive loss - - - - (145) - (1,294) (1,439)
Allotment of share capital 29 220 - - - - - 249
Share-based payments - - - - - (222) 279 57
At 31 December 2024 3,596 20,737 (190) 327 (259) 2,723 (29,168) (2,234)
Notes to the financial information
1. Accounting basis
The financial information set out in this document does not constitute the
Group's statutory accounts for the years ended 31 December 2023 or 2024.
Statutory accounts for the years ended 31 December 2023 and 31 December 2024,
which were approved by the Directors on 16 May 2025, have been reported on by
the Independent Auditors. The Independent Auditor's Reports on the Annual
Report and Financial Statements for each of 2023 and 2024 were unqualified,
did draw attention to a matter by way of emphasis, being going concern and
did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2023 have been filed with
the Registrar of Companies. The statutory accounts for the year ended 31
December 2024 will be delivered to the Registrar of Companies in due
course and will be posted to shareholders shortly, and thereafter will be
available from the Company's registered office at 8(th) Floor, Capital House,
84 - 86 King William Street, London, EC4N 7BL and from the Company's website:
https://krm22.com/investors/ (https://krm22.com/investors/) .
The financial information set out in these results has been prepared using the
recognition and measurement principles of International Accounting Standards,
International Financial Reporting Standards and Interpretations in conformity
with the requirements of the Companies Act 2006. The accounting policies
adopted in these results have been consistently applied to all the years
presented and are consistent with the policies used in the preparation of the
financial statements for the year ended 31 December 2024, except for those
that relate to new standards and interpretations effective for the first time
for periods beginning on (or after) 1 January 2023. There are deemed to be
no new standards, amendments and interpretations to existing standards, which
have been adopted by the Group, that have had a material impact on the
financial statements.
The Group's financial information has been presented in Pounds Sterling
(GBP). Amounts are rounded to the nearest thousand, unless otherwise stated.
2. Going concern
These financial statements have been prepared on the going concern basis.
The Directors have reviewed KRM22's going concern position taking into account
of its current business activities, budgeted performance and the factors
likely to affect its future development, which are set out in this Annual
Report, and include KRM22's objectives, policies and processes for managing
its capital, its financial risk management objectives and its exposure to
credit and liquidity risks.
The Directors have undertaken a significant assessment of the cashflow
forecast covering a period of at least twelve months from the date of approval
of the financial statements. Cashflow forecasts have been prepared based on
a range of scenarios including, but not limited to, existing customer churn at
different churn rates, no new contracted sales revenue, delayed sales and a
combination of these different scenarios.
Having assessed the sensitivity analysis on cashflows, the key risks to KRM22
remaining a going concern and not being in breach of the financial covenants
associated with the TT Convertible Loan is existing customers paying on
payment terms and within 45 days of invoice, customer churn or up to 10%,
conversion of some of the sales opportunities that are currently at contract
negotiation stage and maintaining control of the cost base.
The time to close new customers and the value of each customer, which are
deemed individually as high value and low volume in nature, is key to the
forecast being achieved and KRM22 continuing to operate within its existing
facilities. However, even if the forecast is achieved, there remains a
material uncertainty around KRM22 operating within the financial covenants
associated with TT Convertible Loan. The TT Convertible Loan includes
financial covenants, reported at the end of each quarter, based on the Group's
financial performance and there is a risk that KRM22 breaches the Cash
Covenant, which requires KRM22 to retain a minimum amount of cash, on the 31
December 2025 and 31 March 2026 measurement dates. Failure to comply with a
financial covenant will result in an Event of Default which may result in TT
withdrawing the TT Convertible Loan with all accrued amounts becoming
immediately due and payable which would result in KRM22 becoming insolvent.
TT have previously been very supportive of KRM22 in amending the terms of the
TT Convertible Loan, as demonstrated by the revisions agreed in December 2024,
March 2025 and April 2025, to ensure that KRM22 did not breach the Cash
Covenants. Past practice provides no guarantee that TT would be amenable to
making future changes however KRM22 and TT are in early discussion on the
longer-term plans for the TT Convertible Loan, noting that the three year term
of the facility ends in June 2026. As part of these discussions, and where
there is a risk to the Cash Covenant, amendments could include, but are not
limited to, reducing the value of the Cash Covenant at each measurement date
so that KRM22's cash exceeds the minimum cash requirement on each measurement
date, conversion of the TT Convertible Loan or refinancing the TT Convertible
Loan with a new debt facility. If the TT Convertible Loan was not amended,
converted or a debt refinance is not completed, KRM22 would be obliged to seek
alternative resolution including implementing extensive cost reduction
measures, and in addition the Group is reliant upon the ability to raise
additional funds to ensure it could meet its future liabilities as they fall
due.
The Directors have concluded that the circumstances set forth above indicates
the existence of a material uncertainty that may cast significant doubt on
KRM22's ability to continue as a going concern. However, given KRM22's
forecast, visible sales pipeline, working capital needs and continued support
and open dialogue with TT, the Directors have considered it appropriate to
prepare the financial statements on a going concern basis and the financial
statements do not include the adjustments that would be required if KRM22 were
unable to continue as a going concern.
3. Segmental reporting
The Board of Directors, as the chief operating decision maker in accordance
with IFRS 8 Operating Segments, has determined that KRM22 have identified two
areas of risk management as operating segments, together with a third segment
where the two areas of risk management are not easily separable, however for
reporting purposes into a single global business unit and operates as a single
operating segment, as the nature of services delivered are common.
The internal management accounting information has been prepared in accordance
with IFRS but has a non-GAAP 'Adjusted EBITDA' as a profit measure for the
overall group. This amount is reported on the face of the income statement.
KRM22's revenue from external customers and information about its non-current
assets, excluding deferred tax, by geography is detailed below:
Non-current Non-current
Revenue assets Revenue assets
2024 2024 2023 2023
£'000 £'000 £'000 £'000
UK 2,418 2,200 1,906 2,109
Europe 692 1,333 792 1,466
USA 3,315 2,099 2,215 2,203
Rest of world 344 - 353 -
Total 6,769 5,632 5,266 5,778
The Directors consider that the business has two areas of risk management:
Trading Risk and Corporate Risk as is described in the Strategic Report.
Within these segments, there are two revenue streams with different
characteristics, which are generated from the same assets and cost base.
One customer generated more than 10% of total revenue recognised during the
year ended 31 December 2024. The total revenue received from this customer
was £1.2m (2023: £0.7m) and is included within the USA segment. No
customer generated more than 10% of revenue in the year ended 31 December
2023.
Non-current assets include goodwill and intangible assets recognised on
consolidation and are classified by reference to the geographical location of
the KRM22 group company which initially acquired the acquiree.
Recurring revenue is recognised over the period of time and non-recurring
revenue is recognised at a point in time.
2024 2023
£'000 £'000
Recurring revenue 6,239 4,769
Non-recurring revenue 530 497
Total revenue 6,769 5,266
2024 2023
£'000 £'000
Trading Risk 3,359 2,487
Corporate Risk 3,002 2,593
Multiple Risk 60 72
TT platform 348 114
Total 6,769 5,266
4. Loss per share
Basic earnings per share is calculated by dividing the loss attributable to
the equity holders of KRM22 by the basic weighted average number of shares in
issue during the year.
KRM22 has dilutive ordinary shares, this being warrants, restricted stock
awards and share options granted to employees. As KRM22 has incurred a loss
in the year, the diluted loss per share is the same as the basic earnings per
share as the loss has an anti-dilutive effect.
2024 2023
£'000 £'000
Loss for the year attributable to equity holders of the parent (1,294) (4,619)
Basic weighted average number of shares in issue 35,815,256 35,666,336
Diluted weighted average number of shares in issue 46,318,047 46,492,491
Basic and diluted loss per share (3.6p) (13.0p)
5. Intangible assets
Acquired
software & Capitalised
Goodwill on related assets development
consolidation £'000 costs Total
£'000 £'000 £'000
Cost
At 1 January 2024 7,807 2,887 4,649 15,343
Additions - - 1,148 1,148
Foreign exchange movements
(35) (7) (284) (326)
At 31 December 2024 7,772 2,880 5,513 16,165
Accumulated amortisation
At 1 January 2024 4,291 2,223 3,208 9,722
Amortisation for the year - 126 957 1,083
Foreign exchange movements
(4) 35 (284) (253)
At 31 December 2024 4,287 2,384 3,881 10,552
At 31 December 2023 3,516 664 1,441 5,621
At 31 December 2024 3,485 496 1,632 5,613
6. Events after the reporting date
On 10 January 2025, the Company issued 70,093 new ordinary shares of 10 pence
each in the Company and on 21 March 2025, the Company issued a further 70,093
new ordinary shares of 10 pence each in the Company. Both share issue
transactions were at a price of 85 pence per Ordinary Share and were as
consideration for a partial settlement of the deferred consideration payable
in respect of the historical acquisition of Object+ Holding B.V.
On 31 March 2025, the Company amended the terms of the TT Convertible Loan to
defer the interest payment that was due for payment on that date to 30 April
2025. On 28 April 2025, the terms of the TT Convertible Loan were further
amended to reduce the total facility amount from £5.0m to £4.5m, marginally
increase the interest rate by 0.25% rising from 5.5% to 5.75% over SOFR, and
resulting in a minimum aggregate rate of 9.5% (previously 9.25%), and defer
all interest payments until 30 June 2026.
7. Cautionary statement
This document contains certain forward-looking statements relating to KRM22.
KRM22 considers any statements that are not historical facts as
"forward-looking statements". They relate to events and trends that are
subject to risk and uncertainty that may cause actual results and the
financial performance of the Company to differ materially from those contained
in any forward-looking statement. These statements are made by the Directors
in good faith based on information available to them and such statements
should be treated with caution due to the inherent uncertainties, including
both economic and business risk factors, underlying any such forward-looking
information.
1 Annualised Recurring Revenue (ARR) is the value of contracted
Software-as-a-Service (SaaS) revenue normalised to a one year period and
excludes one-time fees.
2 Adjusted EBITDA is the reported profit/(loss) for the year, adjusted for
recurring non-monetary costs including depreciation, amortisation, unrealised
foreign exchange (loss)/gain and share-based payment charge/(credit) and
non-recurring costs, both monetary and non-monetary, including Company
reorganisation costs, impairment of intangible assets, profit on disposal of
tangible/intangible assets and acquisition, deferred consideration write back,
gain on extinguishment of debt and acquisition, funding and debt related
costs.
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