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Lombard Risk Management

  • BY: Andrew Hore |
  • POSTED: 14/05/2013 |

Lombard Risk Management managed to achieve expectations even though the European Banking Authority delayed new regulatory reporting requirements.

These reporting requirements will need to be satisfied during the coming year and recurring revenues already provide a strong base for 2013-14.

A strong second half meant that revenues increased 31% to £16.8m in the year to March 2013. Pre-tax profit rose from £2.49m to £3.9m and the tax charge was low. There are still tax losses available.

Consolidated development spending, net of amortisation edged up from £2.96m to £3.14m. Cash generated from operations more than covered this spending and £470,000 of deferred consideration for a past acquisition. Net debt of £1.87m at the end of 2011-12 was turned into net cash of £194,000 at the end of March 2013. This was helped by share issues raising £1.5m but there was underlying cash generation. The final dividend has been increased from 0.035p a share to 0.04p a share.

There is a record order book and potential revenues of nearly £14m for this year before additional software sales. Lombard is looking for partners to help it enter additional markets and it has appointed a director to focus on this.

“We have more opportunities than we can afford to fund”, says chief executive John Wisbey. The European regulatory reporting requirements will contribute this year, as will the proposal that UK banks should have to comply with FINREP. Transactional reporting software sales will be expanded into Asia. There are also plans to sell additional modules for the COLLINE collateral management software.

At 11p a share, up 0.88p, Lombard is value at £25.6m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2013_44.pdf

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