LONDON (Alliance News) - Lombard Risk Management PLC on Tuesday said it expects its accounts for the financial year ended March 31 to show that the software company sunk to a loss, and warned that investment spending will hurt profitability in the short term.
Lombard Risk was left counting the cost of a year marked by board changes and a decision to concentrate on its collateral management and regulatory reporting software. Among the board changes, John Wisbey stood down as chief executive in May 2015 and was replaced by Alastair Brown, formerly of Royal Bank of Scotland, in December.
The company now expects a loss in the region of GBP2.1 million and GBP2.3 million for the year ended March 31, versus a GBP2.3 million profit a year earlier, hit by non-recurring costs of GBP2.5 million
Revenue, on the other hand, will be "slightly ahead" of previous market estimate, Lombard said, mainly due to growth in its regulatory compliance division. Chairman Philip Crawford said the company "looks forward" to "strong" revenue growth in the next two financial years.
"The board has renewed confidence in the outlook for the company following the changes that have been implemented throughout the last financial year," Crawford said.
"This confidence is supported by the signing of a number of significant contracts for new modules of the company's COLLINE product that enable clients to comply with forthcoming regulatory requirements, including IOSCO, together with the formalisation of the company's partnership with Oracle to sell AgileREPORTER alongside Oracle's OFSAA platform. These initiatives will require continued investment into the new financial year as the company positions itself to take advantage of these and other opportunities," Crawford said.
Shares in Lombard Risk were down 11% at 10.45 pence on Tuesday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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