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Hardman have today issued their July monthly newsletter, and it includes an upgrade in the forecasts for LRM. Plus the AGM is coming up on 9th July, and judging by the outlook in the finals it should be pretty good: Http://www.hardmanandco.com/sites/default/files/research_papers/July%20Monthly%202014_0.pdf?utm_source=Email+Campaign&utm_medium=email&utm_campaign=29208-236220-July+Monthly+14 "Lombard Risk reported good results on 13th May, profits and revenue ahead of expectations. The AGM will take place on 9th July. It posted a record backlog stood at £5.2m (+18%). FY14 featured a signing of a number of Tier 1 banking clients and strong expansion in Japan. Revenue growth: All FY14 22% revenue growth achieved was organic (up from 18% organic prior year). 2H14 came in strongly, at 44% up on previously record half year. 2H14 revenue was £13.1m vs a full year FY13 of £16.8m. There was an element of ‘catch-up’ from H1, nonetheless the backlog (order book revenue to come from orders in hand) at year end leads us to raise estimates. Lombard Risks fulfils mandatory regulatory requirements for its financial sector clients and regulation rises (though there were delays to the regulator implementing a key stage until next month). Revenue from alliances should start to become meaningful. Upgrade to revenue numbers: FY14 achieved £20.4m (£19.0m estimated). We raise sales FY15E 6% to £22.5m. 61% is recurring revenue plus the order backlog, a strong ratio. Indeed in FY14 there was a strong focus on entirely new business so order book conversion and underlying trend of repeat work and projects should do well in FY15E. We also have strong anticipation based on extending FY14 ‘beach-head’ wins for growth in North America and Japan. Upgrade to profit numbers: FY14 achieved £4.4m; had estimated £3.8m. We upgrade FY15E from £4.6m to £5.0m. With gross margins near 100% and high investment for growth in FY14, we see EBITDA margins expanding FY15 from 29.0% FY14 to 34.7% FY15E. This (allied to software amortisation conservatively rising from £1.6m to £2.8m) translates to a rise in PBT to £5.0m, 14% growth on FY14 just reported. So as costs were taken on (technology product development) in FY14, EBITDA rose 12% but we estimate a 32% rise in FY15E. Investment for the future: Technology spend stood at £7.1m, up from £4.5m in FY12."
Good day to Mr Rivaldo, Thank you for the Hardman update. I write from across the pond and would not have found the update on my own. I just see an attractively priced share and a company that is run by an individual who has very ample reasons to operate the company in a manner which will enable the share price to rise. Fundamentally, I like very much the niche which LRM occupies. Regards, Robbie