KRM22 PLC Trading Update (5500T)
July 21 2020 - 2:00AM
UK Regulatory
TIDMKRM
RNS Number : 5500T
KRM22 PLC
21 July 2020
KRM22 plc
("KRM22", the "Group" or the "Company")
Half Year Trading Update
KRM22 plc, (AIM: KRM) the technology and software investment
company that focuses on risk management for capital markets, today
issues the following trading update for the 6 months to 30 June
2020 (the "Period").
The first half has been impacted by the effects of COVID-19 but
progress has been made with two new customer wins and cost and debt
reduction in the Period.
As described in the trading update of 2 April 2020, the Company
has experienced slowed business activity and extended sales cycles
as customers and prospects have transitioned to home working and
with the increased operational burden resulting from market
volatility. Notwithstanding the backdrop, the Company has secured
two new customers in the period and sold additional products to an
existing customer adding an aggregate of GBP0.3m in ARR in the
period resulting in a total ARR as at 30 June 2020 of GBP4.0m
(which excludes the disputed contract with ARR of GBP0.3m as
described below). The new contracts include the purchase of
Enterprise and Market Risk products.
The total ARR of GBP4.0m is after the loss of four institutional
customers who have terminated their contracts with the Company in
the Period amounting to an aggregate of GBP0.3m ARR. These
terminations were due to a variety of market factors and COVID-19
but are not related to the performance of the Company. As detailed
in the trading update of 2 April 2020, the Company had disputed ARR
of GBP0.4m from two customers. With one of these customers, the
Company has now negotiated a contract at a lower value to retain
them as a customer and assist their early stage development and
this contract is now included in the ARR of GBP4.0m as described
above. Discussions continue with the other customer to try and find
a commercial resolution for the remaining GBP0.3m.
The Company continues to have a strong pipeline of opportunities
and is progressing well through the procurement process with two
further tier one banks which the Company expects will close in the
second half of the year. The UK Brokerage referenced in the
Company's trading update of 2 April 2020 is in the final stages of
approval, will add a further GBP0.3m of ARR.
Costs and operations
As detailed in the update of 2 April 2020, the new contract
wins, together with the cost reduction actions implemented, have
resulted in a substantial reduction in adjusted EBITDA loss at the
period end. This has been achieved through a combination of salary
sacrifices across all staff in 2020, staff redundancies and general
overhead reductions. The Company tracks the Group's booked ARR when
compared to the cash burn run rate within the business and reports
that this ratio is 1.27 as at the period end (compared to 1.59 in
January 2020). As a result, the Group's total monthly cash
recurring burn run rate in July from all operations will be
GBP0.08m plus GBP0.03m for interest and capital repayments.
Cash as at 30 June 2020 was GBP0.8m (31 December 2019: GBP1.1m
and 21 May 2020: GBP1.4m). The Group's debt as at 30 June 2020
reduced to GBP0.8m (31 December 2019: GBP2.0m) after the conversion
of the Convertible loan note ("CLN"). As detailed in the
announcement of 29 June 2020, the CLN was converted into 1,454,434
ordinary shares in the Company. The Harbert Debt facility remains
in place with the ability to drawdown on the facility until 31
December 2020. In addition, the Company is in the process of
finalising a further R&D tax claim with an initial submission
of c. GBP0.2m.
Outlook
The first half has been impacted by the effects of COVID-19 but
the Company remains encouraged by its pipeline of opportunities.
The Company is focused on continuing to drive organic growth and
has made good progress in the Period and remains confident of
meeting management expectations for the year.
Keith Todd CBE, Executive Chairman and Chief Executive Officer
at KRM22 commented: "The first half has been impacted by the
effects of COVID-19 but I remain encouraged by our customer
engagement. We have managed through these recent turbulent times
and are on track to deliver the full year expectations. The outlook
for our offering continues to be positive with a broad engagement
of prospects in Europe, Asia and USA."
For further information please contact:
KRM22 plc InvestorRelations@krm22.com
Keith Todd CBE, Executive Chairman and CEO
Kim Suter, CFO
finnCap Ltd (Nominated Adviser and Sole Broker) +44 (0)20 7220 0500
Carl Holmes / Kate Bannatyne / Matthew Radley
Alice Lane / Sunila de Silva (ECM)
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
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' regulatory, market, technology and operations
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 KRM22.com .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTSEUFUSESSEEW
(END) Dow Jones Newswires
July 21, 2020 02:00 ET (06:00 GMT)
Krm22 (LSE:KRM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Krm22 (LSE:KRM)
Historical Stock Chart
From Apr 2023 to Apr 2024