Last checked at 31 Jan 2022 07:00
KRM22 plc
("KRM22", the "Group" or the "Company")
Trading Update
Notice of Results
KRM22 plc, (AIM: KRM) the technology and software investment company that focuses on risk management for capital markets, today announces the following trading update for the 12 month period to 31 December 2021 ("FY2021").
Financial Highlights
· Gross cash as at 31 December 2021 of £5.4m (FY2020: £2.0m)
· ARR at 31 December 2021 of £3.8m (FY2020: £4.1m)
o New contracted ARR in the year of £0.7m (FY2020: £0.8m)
· Total revenue recognised of approximately £4.1m (FY2020: £4.6m)
· Adjusted EBITDA loss of £0.8m (FY2020: loss of £0.3m)
FY2021 has seen KRM22 successfully sign multi-year contracts with new customers as well as transitioning customers, inherited from legacy acquisitions, on to new multi-year contracts. However, this progress was more than offset by churn from a subset of those legacy customers. In addition, a new contract with a global "tier one" bank, expected to be signed in the fourth quarter of FY2021, has been delayed to 2022. The Company's cost base increased in FY2021 compared to the prior year due to the reinstatement of salaries in order to ensure retention of key staff, expand the Global Risk Platform and the extension of the Company's risk management products. This all resulted in lower revenue recognised and an increase in adjusted EBITDA loss compared to FY2020 and overall results [slightly] lower than current market expectations.
Following the completion of the subscription for 25 per cent of the enlarged share capital of KRM22 by Trading Technologies International, Inc ("TT") in December, the Company has a strong balance sheet with cash at 31 December 2021 of £5.4m, providing a stable platform to pursue the opportunity within risk management which the Board feels remain firmly in place. The Company also has a list of sales prospects which, combined with the new distribution agreement with TT, will underpin future growth. 2022 will be a transitional year and the Company expects to add sales, marketing, and development resource to support both its direct sales efforts and the TT distribution agreement, but the pace of this investment will need to be considered against the prevailing challenging business environment.
Financial expectations noted above are preliminary, and subject to year-end financial close and audit review processes. Full year results will be announced on 2 March 2022.
Keith Todd CBE, Executive Chairman at KRM22 commented: "The 2021 financial performance masks the significant progress the Company has made strategically, with significant expansion of offerings on the Global Risk Platform and the continued migration of many customers to new multi-year contracts as well as new revenue contract wins. The recently signed distribution agreement with Trading Technologies will expand the Companies' growth opportunities under Stephen Casner's leadership as CEO."
For further information please contact:
KRM22 plc InvestorRelations@krm22.com
Keith Todd CBE, Executive Chairman
Stephen Casner, CEO
Kim Suter, CFO
finnCap Ltd (Nominated Adviser and Sole Broker) +44 (0)20 7220 0500
Carl Holmes / Kate Bannatyne
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' market, compliance, operations and technology 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 www.krm22.com.