Lombard Risk Management Regulatory News (LRM)

4 Jun 2007 08:30

Lombard Risk Management PLC04 June 2007 4 June 2007 Lombard Risk Management plc (the 'Group') Trading Update Lombard Risk Management plc, a company providing regulatory, risk management andvaluation software for the financial sector, wishes to provide an update ontrading for the year ended 31 March 2007 and on its current prospects. With regard to the year to March 2007, there was an expectation set in theChairman's statement in the interims that the software business of the Groupwould revert to profitability in the second half of the financial year.Although revenue rose by almost 50% against the previous year, profitability inthe software business was not achieved, and the software business lost slightlyin excess of £400k in the second half of the year. Substantially all of thisloss can be attributed to the delay in revenue recognition on two signedcontracts which caused a deferral of around £370k of revenue. The delay on oneof these was almost entirely due to regulatory delays and the other to clientissues outside the company's control. The revenue from these projects should berecognized in the current financial year, so the issue is one of revenuerecognition between accounting periods. The overall trading prospects for the Group in the current financial yearcontinue to be favourable, in particular the impact from Basel 2 and therequirement for regulatory reporting upgrades. We have announced previously thatthe Group's STB Systems subsidiary will be an appreciable beneficiary of theBasel 2 changes in banking and securities firms' regulatory reportingrequirements to the FSA and other regulators due to come in during 2008. TheBoard is now pleased to announce that, as expected, good and very tangibleprogress is being made with its order book for upgrading its customers for Basel2, as well as winning new business from firms upgrading systems as a result ofBasel 2. We have for some time been talking about the spin-out of the independentvaluation business. This process continues and we are in discussions with anumber of interested trade buyers. We will update the market as we have moreinformation. The Board is confident that based on current prospects and activity the softwarebusiness will return to profitability in the current financial year helped bySTB Systems gaining revenue from Basel 2 and continued growth from the firm'sColline product for collateral management. As well as building on its strongorganic revenue growth, which should continue this year, the Group continuesactively to identify and pursue accretive acquisition opportunities. Enquiries: Lombard Risk Management plcJohn Wisbey, Chairman & CEOTel: +44 20 7384 5000email: john.wisbey@lombardrisk.com Noble & Company (Nominated Advisors)Matthew Hall, DirectorTel: +44 20 7763 2200 This information is provided by RNS The company news service from the London Stock Exchange