KRM22 PLC says FY21 impacted by legacy customer churn and delayed

On Jan 31, 2022

The company’s cash balance is strong at £5.4mln, following the subscription for a 25% stake by Trading Technologies

KRM22 PLC (AIM:KRM, OTC:KRMCF) said its results for 2021 were slightly below market expectations, impacted by churn in legacy customers and delays to a contract, but added that its new distribution deal with Trading Technologies International, Inc (TT) will underpin its future growth.

Revenue came in at £4.1mln in the 12 months to 31 December 2021, compared with £4.6mln the year before, while the EBITDA loss was £0.8mln, compared with a £0.3mln loss, the technology and software investment company said in its earnings release.

Annual recurring revenue (ARR) was £3.8mln, compared with £4.1mln, with new contracted ARR in the year totalling £0.7mln versus £0.8mln.

KRM22 said it signed multi-year contracts with new customers as well as transitioning customers, inherited from legacy acquisitions, during the year, but the increase in customer numbers was offset by churn from a subset of legacy customers.

In addition, a new contract with a global ‘tier one’ bank, expected to be signed in the fourth quarter of 2021, has been delayed to 2022.

The company also saw an increase in costs after it had to reinstate salaries to retain key staff and extend its risk management products.

Gross cash stood at £5.4mln at end-2021, up from £2mln a year earlier, following the subscription for a 25% stake in the company by TT.

KRM22 said its expects 2022 to be a transitional year where it will invest in sales, marketing, and development resources to support its direct sales efforts and the TT distribution agreement. However, it cautioned that the pace of the investment “will need to be considered against the prevailing challenging business environment”.

Keith Todd, 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.”