Lombard Risk posts record Interims, shares up 28%

Lombard Risk Management (LSE: LRM), published impressive Interim results for H1 this morning, reporting record revenue of £15.2m for the period, a 41.2% increase on its performance last year.

The company saw sales up 58% on last year, with software licence sales up 106%, and annual recurring revenue up 22% to £6.1m, showing strong foundations for future earnings.

Stockbroker finnCap said the new management team had proven its point by delivering a record set of interim results:

"...as it begins to transform the scale and opportunity for this business on the back of the June fundraising. The company promised a seismic shift in revenue level and we are already seeing it in the first half, with over 40% growth despite banking industry uncertainty over Brexit and the US election."

finnCap believe the business has shown substantial margins are achievable, saying it would upgrade expectations due to "unexpected levels of H1 profitability" to March 2017:

"We still expect the planned heavy investment in both the business and the products through H2 in order to set the company up for the further strong revenue growth in FY 2018, which will finally lead to substantive earnings for shareholders."

CEO Alastair Brown said that with the increasing strength of recurring revenues, and an order book of £9.2m, the transformation of the Lombard was largely complete:

"...the Board faces the second half of the year with optimism. Whilst the Financial Services industry as a whole remains under pressure, the Governance, Risk and Compliance sector continues to experience strong growth and the Company remains well placed to service all our clients."

Financially, the company reported a tripling of its EBITDA year-on-year to £1.5m, and moved from a net loss position of £1.8m in H115, to a loss of just £0.1m in H116. Its cash position at the end of the period was nearly £7m, up from £2.7m in 2015.

Operationally, the firm launched AgileCOLLATERAL™ its cloud-based collateral management system, secured new clients for AgileREPORTER®, and opened new state-of-the-art offices in Birmingham.

Lombard's share price opened up 28% this morning.