LONDON (Alliance News) - Lombard Risk Management PLC Thursday reported a pretax profit for the first half of the year, compared to a loss the prior year, driven by a near 28% increase in revenue which it said was buoyed by new regulations in the financial services industry.
Lombard Risk Management, which is comprised of a risk management division and regulatory compliance division, reported a GBP13,000 pretax profit for the six months to September 30, compared with a GBP523,000 pretax loss in the first half of last year.
Revenue in the period rose almost 28% to GBP9.3 million from GBP7.3 million the prior year. It said annually recurring revenues for the half year totalled GBP4.3 million, slightly higher than the prior year, being 47% of total revenues.
New European rules for the financial services industry have been a boost to Lombard, which provides software to help firms comply with the regulatory environment.
"The revenue rise was driven, in part, by our regulatory programme for the European Banking Authority's COREP exceeding management expectations, with 121 clients now signed up for COREP, but we also signed some useful deals for COLLINE our collateral management platform," said Chief Executive John Wisbey in a statement.
The company said it again expects its revenues to be weighted towards the second half, and with strong first-half revenue growth, it bodes well for its full-year performance.
It raised its interim dividend to 0.035 pence per share, up from 0.030 pence.
"The outlook for revenue growth remains promising, with market and regulatory environments continuing to favour the company's product positioning in regulation, compliance and risk management despite a tough budgetary environment in the financial sector. In addition, the investment we have made in the last year can be expected to stand us in good stead in the years to come," Wisbey added.
Lombard said a good pipeline of revenue, and European Banking Authority's Asset Encumbrance and Liquidity Coverage Ratio regulations will create further opportunities in the second half and into the following financial year.
"The board is optimistic about the second half of the year owing to the good level of contractual backlog/order book, the likelihood of continued new business from the European Banking Authority's FINREP, Asset Encumbrance and Liquidity Coverage Ratio regulations following on from COREP and other selections made of our software," the company said.
Lombard Risk Management shares were flat Thursday mid-morning at 12.62 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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