KRM22 plc (LON:KRM), the technology and software investment company that focuses on risk management for capital markets, has announced the following trading update for the 12 month period to 31 December 2021.
· Gross cash as at 31 December 2021 of £5.4m (FY2020: £2.0m)
· ARR at 31 December 2021 of £3.8m (FY2020: £4.1m)
– 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 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.”