REG - KRM22 PLC - Half Year Trading Update

KRM22Announcement

18/07/2024 07:00

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RNS Number : 8454W  KRM22 PLC  18 July 2024

KRM22 plc

("KRM22", the "Group" or the "Company")

Half Year Trading Update

 

KRM22 plc, (AIM: KRM) the technology and software investment company with a
particular focus on risk management in capital markets, today issues the
following trading update for the six months ended 30 June 2024 (the "Period")
which is in line with management's expectations.

The Company has continued to make good progress in the Period increasing the
value of its Annual Recurring Revenue ("ARR") from £5.4m at the end of FY
2023 to £6.0m at the end of the Period and, as at the date of this
announcement, the Company's ARR has further increased to £6.1m.

The Company expects to report results for the Period in September 2024, and
these are estimated to be:

·             ARR: £6.0m (H1 2022: £5.0m)

·             Total revenue: £3.3m (H1 2023: £2.4m)

·             Adjusted EBITDA: £0.3m (H1 2023: loss of £1.0m)

·             Cash balance as at 30 June 2024: £0.6m (FY 2023:
£0.9m)

·             Net debt at 30 June 2024: £3.9m (FY 2023: £3.6m)

 

A total of £1.1m of new ARR was generated in the Period through both sales to
new customers, new product sales to existing customers and contractual price
increases.  Sales of the Limits Manager product has continued and KRM22 now
has ARR contracts in place for its Limits Manager product with nine Futures
Commission Merchants ("FCMs"), of which four have been signed in the Period,
with two contracts through direct sales, one contract through the distribution
agreement with Trading Technologies International, Inc. ("TT") and one
additional contract which was originally entered into through the TT
distribution agreement and subsequently transferred to KRM22.  The Company
did see customer churn of £0.4m in the Period, primarily from three customers
for the Market Surveillance product, Post-Trade Stress product and one
customer with multiple products who terminated their contract as they were
closing their futures trading desk.

The Company has a strong pipeline of sales opportunities for the Limits
Manager product.  Risk Manager, which combines the legacy At-Trade and
Post-Trade products, together with new functionality, is creating additional
new sales opportunities with both new and existing customers.

As announced in the February 2024 trading update, the Company implemented a
focused cost savings program with annual cost savings of approximately
£1.2m.  This decisive action, together with the increase in total revenue
recognised in the Period compared with H1 2023 and the continued careful
management of the underlying cost base of the business, has contributed to the
Company reporting an adjusted EBITDA profit for the period of £0.3m.  The
Company has benefited from one-off non-recurring revenue being recognised in
the Period meaning that management expectations for the full year outturn
remain unchanged.

The Company's cash balance of £0.6m, together with the availability of
£0.5m, which remains undrawn, under the TT convertible loan, means that the
Company expects to continue to operate within its existing cash and debt
facilities.  However, the Board remains focused on careful cash management as
it enters the second half of the year.

Dan Carter, CEO of KRM22, commented: "KRM22 has had strong first half of 2024
with ARR now at £6.1m and, with a substantial pipeline of sales opportunities
through the remainder of the year and in to 2025, this growth is expected to
continue as we drive towards our target of becoming a £10.0m ARR business."

 

The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.

 

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

Carl Holmes / George Dollemore (Corporate Finance)

Sunila de Silva (ECM)

 

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 www.krm22.com

 

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