REG - KRM22 PLC - Trading Update

KRM22Announcement

31/01/2022 07:00

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RNS Number : 0366A  KRM22 PLC  31 January 2022

KRM22 plc

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

Trading Update

Notice of Results

 

KRM22 plc, (AIM: KRM) the technology and software investment company that
focuses on risk management for capital markets, today announces the following
trading update for the 12 month period to 31 December 2021 ("FY2021").

Financial Highlights

·          Gross cash as at 31 December 2021 of £5.4m (FY2020:
£2.0m)

·          ARR at 31 December 2021 of £3.8m (FY2020: £4.1m)

o  New contracted ARR in the year of £0.7m (FY2020: £0.8m)

·          Total revenue recognised of approximately £4.1m (FY2020:
£4.6m)

·          Adjusted EBITDA loss of £0.8m (FY2020: loss of £0.3m)

 

FY2021 has seen KRM22 successfully sign multi-year contracts with new
customers as well as transitioning customers, inherited from legacy
acquisitions, on to new multi-year contracts.  However, this progress was
more than offset by churn from a subset of those legacy customers.  In
addition, a new contract with a global "tier one" bank, expected to be signed
in the fourth quarter of FY2021, has been delayed to 2022.  The Company's
cost base increased in FY2021 compared to the prior year due to the
reinstatement of salaries in order to ensure retention of key staff, expand
the Global Risk Platform and the extension of the Company's risk management
products.  This all resulted in lower revenue recognised and an increase in
adjusted EBITDA loss compared to FY2020 and overall results  slightly  lower
than current market expectations.

Following the completion of the subscription for 25 per cent of the enlarged
share capital of KRM22 by Trading Technologies International, Inc ("TT") in
December, the Company has a strong balance sheet with cash at 31 December 2021
of £5.4m, providing a stable platform to pursue the opportunity within risk
management which the Board feels remain firmly in place.  The Company also
has a list of sales prospects which, combined with the new distribution
agreement with TT, will underpin future growth.  2022 will be a transitional
year and the Company expects to add sales, marketing, and development resource
to support both its direct sales efforts and the TT distribution agreement,
but the pace of this investment will need to be considered against the
prevailing challenging business environment.

Financial expectations noted above are preliminary, and subject to year-end
financial close and audit review processes.  Full year results will be
announced on 2 March 2022.

Keith Todd CBE, Executive Chairman at KRM22 commented: "The 2021 financial
performance masks the significant progress the Company has made strategically,
with significant expansion of offerings on the Global Risk Platform and the
continued migration of many customers to new multi-year contracts as well as
new revenue contract wins.  The recently signed distribution agreement with
Trading Technologies will expand the Companies' growth opportunities under
Stephen Casner's leadership as CEO."

 

For further information please contact:

 

KRM22
plc
InvestorRelations@krm22.com

 

Keith Todd CBE, Executive Chairman

Stephen Casner, CEO

Kim Suter, CFO

 

finnCap Ltd (Nominated Adviser and Sole
Broker)                  +44 (0)20 7220 0500

Carl Holmes / Kate Bannatyne

Alice Lane / Sunila de Silva (ECM)

 

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

 

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' market,
compliance, operations and technology 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 (http://www.krm22.com) .

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