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