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Excellent ! With LRM capitalising a lot of its software development these changes in eps can be quite smoke and mirrors. What's the brokers estimate for revenue in 2015 and 2016 as well as cash in the bank for 2015 and 2016?
Hardman have just increased their forecasts for this year to 1.8p EPS (from 1.5p EPS). They've also introduced a forecast of 2p EPS for next year. Now to read the new report.
Http://www.shareprophets.advfn.com/views/8458/lombard-risk-management-interims-buy "Lombard Risk Management – Interims: Buy Sunday 19 October 2014 Lombard Risk Management (LRM) has announced results from “a busy six months” to 30th September 2014 as financial services industry regulatory change continues apace. Along with the company’s own development, this helped revenue more than 27.7% higher than in the corresponding 2013 period, to £9.27 million, though this was somewhat offset by increased staffing levels to deliver additional contracts – with a pre-tax profit of £13k stated. However, this reflects a significant second half year weighting and is improved from a prior year period £523k loss. The interim dividend – to be paid on 14th November to shareholders on the register on 31st October – is to be increased from 0.03p to 0.035p per share (cost - £92k). Net cash declined after particularly £1.34 million of capitalised development expenditure more than amortisation, though partially offset by a £0.62 million increase in deferred income (to £5.79 million) and at the period end there were net current liabilities (including the noted deferred income liability) of £1.26 million, though no long-term liabilities. There have been some minor prior year accounting restatements following a review by the Financial Reporting Council which identified errors in the company's accounting policies for capitalising and amortising product development costs. Having spoken to the company it reassures that this issue is now addressed, and we note a new CFO, Nigel Gurney, is in place as of 1st September following his predecessor’s departure earlier this year. However, this again raises the general question of the effectiveness of auditors. Noting “a continued substantial order book/backlog of contracted revenue totalling £5.1m. Much of this revenue will be recognised in the second half of the year along with in excess of £4.5m of annually recurring revenue” and an “over 95%” client retention rate for all products, the company is confident looking ahead. Last year the half year performance was turned into a stated full-year pre-tax profit of £4.42 million (though £0.31 million from a half year loss of £2.34 million when incorporating the in-excess-of-amortisation capitalised development expenditure) on revenue of £20.40 million and there are forecasts for £5 million on £22.50 million this time. With capitalised development costs expected to continue coming down as a proportion of revenue and a trade sale - where metrics such as multiple of (the currently fast growing) revenues likely come into play - continuing to look a logical longer-run outcome, we continue to consider that the shares – marginally ahead on our initial share tip – look attractive. The shares have nud
worrying cash flow yet again. i dont bother even looking at the P/L figures with this company, i go straight to the CFS. £1.822 cash generated - thats before you take off deprecation and ammortisation. £2.121m dev costs capitalised. so in total theres a net cash loss for the 6 months. this is a loss making company and the markets will not mark the current sp up any time soon. it will take small pi's buying this stock to push the price up and at the moment cannot see that happening given the current turmoil in the markets. sold my tranche yesterday for a measly profit. all in my humble opinion of course...good luck to all still invested...
Positive stuff from the respected Techmarketview web site: Http://www.techmarketview.com/ukhotviews/ "Thursday 16 October 2014 Risk Rewards Lombard Risk Management First half results from Lombard Risk Management, the provider of regulatory and compliance solutions across the financial services sector, show that the progress of the past year continues, see here and work back. The growing success of the company’s portfolio is providing the management with good visibility over second half figures and continued revenue and profit growth. Six-month revenue was up 28% to £9.3m, with EBITDA of £0.8m after break-even at the half-way mark last year. Additional impetus to growth was provided by a greater than expected take-up of Lombard Risk’s solutions to meet the European Banking Authority’s Common Reporting requirements (COREP), with 121 customers signing up, half of which were new to the company. The management has several reasons to be confident that it will not suffer from some of the problems met by other companies entering a growth phase. It has cash in the bank, implementation costs are funded by the customer and contracts are generally multi-year and often lead to the sale of further products as regulatory pressures increase. Also, meeting regulatory deadlines is a crucial priority for the customer base, so Lombard Risk will not be plagued by extended contract negotiations or budget restrictions. Visibility over revenue progress is further enhanced by a shift towards a higher proportion of the typical contract value coming from annual fees. Regulation is a vitally important fact of life across the wider Financial Services sector with a continual flow of new regulatory initiatives. Lombard Risk has established itself as a leading market player, serving 60% of the top banks, with a broad range of standardised approaches to regulatory reporting and compliance requirements. They look to have built a solid base from which they should be able to generate consistent advances in revenue and profit."
Certainly mate....Lrm is unique company and so in very good position going forward.
....for the much seasonally weaker H1. Revenues are hugely up, with the £0.8m EBITDA much improved over last year, and with a very bullish outlook for this H2: Http://www.investegate.co.uk/lombard-risk-mngment--lrm-/rns/half-yearly-report/201410160700314421U/ Nice increase in the divi too, with net cash increasing to almost £2m. There are lots of regulatory opportunities coming, and I like the way LRM are poaching clients from competitors. With large recurring revenues, and the Board "optimistic" about H2, things are looking pretty healthy here imo.
I think the lack of replies suggests no one knows !
Does anyone know what an average REPORTER contract is worth in terms of upfronts (initial license fees plus one off professional services) plus ongoing annual maintenance fees?
And not just the one Japanese bank client win, but "a consistent flow of financial institutions (2 in the last week)" and "an influx of new business".... http://www.bobsguide.com/guide/news/2014/Sep/23/large-japanese-bank-switches-from-rframe-to-lombard-risk-reporter-for-regulatory-reporting-and-compliance.html "Large Japanese bank switches from rFrame to Lombard Risk REPORTER for regulatory reporting and compliance. Lombard Risk Management plc (LSE:LRM), a leading provider of integrated regulatory reporting and compliance, and collateral management solutions for the financial services industry, announces large Japanese bank switches from rFrame to REPORTER for Bank of England regulatory reporting. “Following a series of tactical mergers and acquisitions by software companies to acquire market share, we have seen an influx of new business as clients that are faced with changing to the acquirer’s software platform take the opportunity to re-evaluate the market.” Says John Wisbey, Chief Executive Officer, Lombard Risk. “When faced with switching reporting systems, it’s an opportunity for firms to see what’s new on the market, and we have seen a consistent flow of financial institutions (2 in the last week) electing to move to our REPORTER.” Rob Markham, Head of Regulatory Sales, EMEA, explains: “We are delighted to welcome this prestigious Japanese bank and others to our growing client community, and thank them for selecting REPORTER. Lombard Risk clients benefit from our unparalleled 25 years’ experience in the risk and regulatory compliance field, and a particularly flexible product deployment approach that enables our solution to fit around clients’ existing infrastructures, rather than enforcing a prescriptive system that will, over time, complicate the reporting processes.” REPORTER is an end-to-end regulatory reporting solution for the global financial services sector which is used by over 250 firms globally, 100+ for Bank of England reporting and more for EBA Common Reporting here in the UK"
Quite right, the forecast for this year is 1.6p EPS (I was looking at historics). Remembering the LRM/Broadridge collaboration re collateral management: Http://www.broadridge.com/news-events/press-releases/Broadridge-and-Lombard-Risk-form-Strategic-Alliance-in-the-Collateral-Management-Sector.html?show=2014+Press+Release This news last night from Broadridge in the USA sounds encouraging: Http://finance.yahoo.com/news/broadridge-helps-global-banks-accelerate-120000080.html "Fri, Sep 19, 2014, 2:20AM EDT Broadridge Helps Global Banks Accelerate Operational Transformation In Response to Changing Market Structure, Banks Take Steps to Mutualize Costs across their Capital Markets Businesses LAKE SUCCESS, N.Y., Sept. 18, 2014 /PRNewswire/ -- Broadridge Financial Solutions, Inc. (BR), the leading global provider of technology-driven solutions to the financial services industry, reports that in the six years since the global financial crisis, its post-trade managed service client base in North America has more than doubled. This growth represents 15 new clients and is the fourth year of double-digit growth for Broadridge Business Process Outsourcing. After years of cost cutting throughout the financial services industry, recent and ongoing demands for increased capital and collateral are putting renewed pressure on firms to optimize, transform and reevaluate their business models. Broadridge is uniquely positioned to help firms adapt to market structure changes by mutualizing costs and capabilities while sustaining premium service in operations and technology. As a result, more than 30 firms in total, including Bloomberg Tradebook and Societe Generale, have contracted with Broadridge to manage all or part of their post-trade operations. "We recognized many years ago that this would become a serious pressure point for financial services firms, and today we're leveraging our state-of-the-art technology combined with our unique industry insights and expertise to optimize, transform and enhance the speed to market for our clients. This is an increasingly important offering as firms struggle to comply with enormous regulatory challenges while also freeing up investment dollars to accelerate revenue growth," said Mike Alexander, President, Broadridge Business Process Outsourcing. "Given Broadridge's scope, scale and growing global banking clientele, we have become the de facto industry standard in managed services for post-trade processing." etc
does the lowly number of buys in September point to the nominated advisor (broker) holding quite a bit of stock?
Considering the sea of red over the last couple of weeks this seems to be holding up quite well.I think there have only been 9 buys so far this month.
The eps for the March year 2015 remains unchanged at 1.6p which is unchanged from Hardmans July 2014 report. Infact no of the 2015 forecasted numbers have changed what so ever. The key for the interim due in mid October will be free cashflow generation as no one believes the rubbish profitability numbers LRM reports due to capitalising a chuck of its software development.
Particularly good to see small sells getting almost the mid-price now, hopefully indicating background demand out there. Hardman's monthly newsletter for Sept5ember is just out - there's a one page note on LRM with a brief update as follows - note that the upgraded forecasts for this year are 2.1p EPS with a 0.075p dividend, and £2.3m net cash: Http://www.hardmanandco.com/sites/default/files/research_papers/September%202014%20Monthly.pdf?utm_source=Email+Campaign&utm_medium=email&utm_campaign=29208-246160-Sept+Monthly+14 "We anticipate no news in September, with the Interims being due mid October. New CFO starts 1st September as previously announced. Nigel Gurney will be joining the Company as Chief Financial Officer and is expected to become a board member from 1st September 2014. Nigel was Chief Financial Officer of Merchant Securities Group plc, now the London stockbroking arm of Sanlam Limited and prior to that he was Chief Financial Officer of W.H. Ireland Group plc. Trading since the year end has been ahead of the same time in the previous year and the Company remains on target to achieve the market growth forecasts for the current year. On the back of the last results we upgraded."
looks like the broker is sitting on stock
just cant seem to get above that 13p mark can it...
Probably not next year as I am no longer a shareholder in LRM. GL to all holders.
Yes sounds good, assuming we are both shareholders. And the earlier time was entirely my fault!! Apologies.
Maybe next year then Paul, unless they keep to the earlier time, which of course they probably will.
I was indeed at the AGM and I do believe I was the only non-employee. It was all over quickly and despite staying for tea and a biscuit I was still out by 10:10. Millfield - apologies I missed you! Discrete - the issue with body language is that describing it is somewhat subjective; I'm sure some of the board members were delighted that there was not a barrage of awkward questions.
I was told that Paul Tuson (posting here as "paet") attended the meeting as a shareholder, but had left by the time I arrived, so I missed the chance of getting him to buy me a pint at the Founders. However, if he sees your post he may well be kind enough to answer your query. Judging by the short length of the meeting, Paul was probably the only non-employee shareholder present. It was a shame really because I had several questions to ask including about the effects of wage inflation in China and how they intend ensure progress in the Americas.
Good that you got a coffee and biscuit. If anyone out there attended the meeting and can give some feedback on the body language and confidence of LRM executives, this would be great?
It must be one of the shortest AGMs LRM have ever had. I got there at 1020 and found they had finished by 1000. The new time obviously discouraged attendance so I expect that they will never change back to 1430. At least I got a coffee and a biscuit.
To quote from LRM's recent results, they are "developing a market-leading solution to satisfy the regulatory requirements of the European Banking Authority's Common Reporting and in the new Optimisation module for the COLLINE® product family". They've also introduced "a new product, Compliance Assessor". All of these seem to be "genuinely new products", in particular the ones to meet new regulatory requirements. When LRM start to receive revenues for these products they will begin expensing the costs. That's the way the accounting rules work and which almost companies all abide by.