Risk management and compliance software supplier Lombard Risk Management moved into profit in the six months to September 2010 thanks to changes in financial regulations.
The interims have been published six weeks after the previous full year figures and less than three weeks after the end of the interim period.
Banks and financial companies have to comply with the Liquidity Reporting and Stress Testing regulatory regime before the end of 2010. LRM has been working for customers in this area for at least a year but the revenues only started to be recognised in the latest six months. That helped revenues rise by one-third to £5.8m. Annualised recurring revenues are running at more than £4.4m.
A loss of £820,000 was turned into a profit of £154,000. Things could have been even better without the additional cost of moving office in London. Admin costs will fall in the second half.
There is plenty of other legislation that will provide further demand for LRMís software. The customer base is broad with the largest five customers accounting for 22% of revenues.
The balance sheet is strong with net cash of £1.31m at the end of September 2010. That cash pile will have given customersí confidence in the financial stability of LRM and may have helped to win some of its recent business.
At 4.375p a share, LRM is valued at £9.05m.
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