15th Mar 2010 15:39
LOMBARD RISK MANAGEMENT
Trading update and new contract wins
London, 15th March 2010
Lombard Risk Management plc ("Lombard Risk" or the "Company"), the global provider of specialised software solutions that improve the management of collateralised trading, liquidity and regulatory compliance, announces the following Trading Update and information on new contracts:
Recognised Revenue
Recognised revenue over the last 6 months has been lower than the Board had expected. This is due firstly to the postponement by a few months of the FSA's regulatory deadlines for liquidity reporting referred to in the Interim Report and banks' consequent delayed uptake, and secondly to the loss of a substantial deal which was at a very advanced stage. Delays in business also obviously affect timing of cash received, and have caused cash outflows, but the Board is confident that taking into account its recurrent revenues from existing customers, and the recently contracted and committed business described below, that this cash position will be materially improved within the next few months. In addition there is an encouraging sales pipeline of unsigned business.
New business
The Company has won new business comprising 12 new contracts, orders and agreed deals since 1st January 2010 with a first year value of over £2.1m. This follows the £0.7m of contract wins announced in January, giving a total of contracts or orders of £2.8m in the last four months. These include the following :
·; Contracts or orders worth £1m for Colline. This includes a new licence to a major French banking group for Colline.
·; Eight further contracts or orders for UK liquidity reporting and/or liquidity stress testing in addition to the six contracts announced on 13th January 2010.
·; Significant contracts for regulatory reporting in Singapore with two new customers, one with a top US investment bank and one with a major Japanese bank.
·; Licence extensions by two customers of their Oberon contract.
Owing to the Company's revenue recognition policy it is anticipated that most of the revenues arising from these deals will not be recognized in the current financial year ending 31st March 2010. This will result in revenues for the year ending 31st March 2010 that are lower than the Board had expected a few months ago, but the revenue from the contracts being announced today will provide a strong start to the new financial year ending 31st March 2011. All the revenues from these contracts should be recognized by the end of the next financial year ending March 2011.
John Wisbey, Chairman of Lombard Risk, commented:
"After a few disappointing months for revenues, the sales successes and additions to our order book in January and February are very encouraging for all products. We do not want to overset expectations because we know from experience that new business won can vary quite a lot from month to month. Nevertheless the new business should provide a strong foundation for revenue growth in the year to 31st March 2011. We also have a strong sales pipeline especially for our regulatory business in this period of major regulatory change, and we already have visibility of several more deals which we expect to close in the next few weeks. We will announce a fuller trading update in April after the end of our financial year."
-ends-
For further information please contact:
Lombard Risk Management plc
John Wisbey, Chairman
Tel: 020 7089 3700
Keith Butcher, CEO and Interim Finance Director
Execution Noble & Company Limited
John Llewellyn-Lloyd
Sam Reynolds
Tel: 020 7456 9191
City Profile
Simon Courtenay
Tel: 020 7448 3244
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