KRM22 managing risk in 2020 through focus on organic growth

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What KRM22 does

KRM22 PLC (LON:KRM), which floated in May 2018, is a software and technology firm that provides risk management products to capital markets companies.

The group’s portfolio of applications covers market, regulatory, technology and operations risk.

 

What it owns

The company currently owns:

Irisium – provides analytics and contextual surveillance tools that help capital market firms identify and manage risks of market abuse, fraud and operational issues as well as meet regulatory compliance

ProOpticus – a real-time, multi-asset class, post-trade portfolio risk management system for hedge funds, financial institutions and traders. The system provides analysis from the micro to macro levels of granularity

• Object+ – a risk management and post-trade services firm focused on capital markets

 

How it is doing

In its interim results statement for the six months to June 30, 2020, the firm included total revenue of £2.3mln, up from £1.8mln in the same period last year, with organic revenue growth at 19%.

Adjusted underlying earnings (EBITDA) in the first half was marked as a £0.3mln loss, while the loss before tax narrowed significantly to £1.2mln from £4.4mln in 2019.

KRM22 also noted that the group’s ‘undisputed annualised recurring revenue (ARR) – which represents the value of contracted software-as-a-service (SaaS) revenue normalised over a year – amounted to £4mln during the period, and since then has improved to £4.3mln.

The company had some £800,000 of cash at the end of June, 2020.

In a separate statement, the group said the a new £3mln debt facility will be drawn down immediately and it replaces the company’s existing debt facility, which was provided by Harbert European Growth Capital Fund II.

Outstanding debts and charges attached to the Harbert facility are intended to be paid early also, using the proceeds, the company added.

Earlier in August the group also announced that it had secured a major customer contract for a suite of risk management products worth £1.2mln over four years.

 

What the boss says – executive chairman and chief executive Keith Todd

“The first half has naturally been impacted by the effects of COVID-19, with extending sales cycles and delays in decision making but we remain encouraged by our customer engagement and the pipeline remains strong which we are looking to convert in the second half of the year,”

“We have managed through these recent turbulent times and are on track to deliver full-year market expectations. The outlook for the second half of the year continues to be positive with a broad engagement of prospects in Europe, Asia and North America.”

 

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