Trading Update

KRM22 PLC

21 February 2024

 

KRM22 plc

("KRM22", the "Group" or the "Company")

Trading Update

KRM22 plc, (AIM: KRM) the technology and software investment company that focuses on risk management for capital markets, today announces the following trading update.

The Company is executing on its plan to increase the value of its Annual Recurring Revenue ("ARR") to £10m through the development of new products, leveraging the distribution reach of key partners and realising new business from a growing pipeline of new prospects. 

At the date of this announcement, the Company's ARR stands at £5.8m (£4.6m at 31 December 2022).  The continued growth in ARR has come from a revived product suite including multi-year contracts for Risk Manager, Limits Manager and Market Surveillance via direct sales and sales from distributors including Trading Technologies International, Inc. ("TT") under the terms of the distribution agreement with TT signed in December 2021.

The underlying cost base of the business continues to be tightly managed and, following a careful review by the Board, management have taken a decision to implement a focused cost saving program with annual cost savings of approximately £1.2m early in the current financial year.  The cost savings are expected to accelerate the Company's path to profitability, whilst having minimal impact on operations as the savings have come from staff redundancies in roles where operational synergies can be achieved and a reduction in contracted development resources as specific projects are nearing completion.

The growth in ARR, together with the continued management of the underlying cost base of the business and the availability of funds to drawdown from the TT debt facility means that the Company expects to operate within its existing available cash and facilities and anticipated new contract signings.

The Company expects to report audited results for the 12-month period to 31 December 2023 ("FY2023") in May 2024, and the financial highlights* include:

·      Gross cash as of 31 December 2023 of £0.9m (FY2022: £1.9m)

·      ARR of 31 December 2023 of £5.4m (FY2022: £4.6m at constant FX rates) - growth of 17.4%

o  New contracted ARR in the year of £1.1m (FY2022: £1.3m)

·      Total revenue recognised of approximately £5.2m (FY2022: £4.3m) - growth of 20.9%

·      Net debt at 31 December 2023 of £3.6m with the Company having drawn down a total of £4.5m on the debt facility with TT announced on 19 June 2023 with £0.5m remaining undrawn.

Stephen Casner, CEO at KRM22 commented: "Our continued growth reflects the persistent demand that the derivatives market has for KRM22's next generation of risk management systems.  In the last few months we have added three new FCMs, including one top 10 FCM, to KRM22's risk platform.  Our pipeline of new sales opportunities remains strong and we expect further announcements detailing additional FCM's committing to our Limits Manager product in H1 2024.  The Company expects current cash and the debt facility to provide sufficient runway to a cash flow positive position and is looking to resume market forecasts upon release of audited financials in May 2024."

*The financial expectations noted above are preliminary, and subject to year-end financial close and audit review processes.

For further information please contact:

KRM22 plc                                                                                          Keith Todd CBE, Executive Chairman Stephen Casner, CEO Kim Suter, CFO	[e-mail]
Cavendish Capital Markets Limited (Nominated Adviser and Sole Broker)                        Carl Holmes / George Dollemore (Corporate Finance) Sunila de Silva (ECM)	[phone]

The information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.  With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

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 KRM22.com

 

END