KRM22's losses expand but acquisitions boost recurring revenue

3rd Jun 2019 08:30

(Sharecast News) - KRM22 returned widened full-year losses after costs increased on Monday, though the company also reported an increase in annualised recurring revenues following a new acquisition.The risk management software company, which floated in April last year and said its 2018 results represented just the first few steps on its journey, saw pre-tax losses widen to £5.4m from £6,000 the year before as it generated revenue of £1.3m, of which 87% was from recurring customer contracts.Annualised recurring revenue was at £3.3m at 31 December, but has since risen to £3.9m following the completion of the acquisition of Object+.This acquisition is the fourth the company has made since floating, having acquired 60% of the issued share capital and voting rights of Irisium last June, 100% of the issued share capital and voting rights of ProOpticus in September and certain assets of Ascendore Limited in July.KRM22 had cash and cash equivalents of £3.4m at the end of the year, up from £14,000 the year before.Keith Todd, chief executive and chairman of KRM22, said: "We have established a very strong foundation for the business in terms of technical development of the global risk platform, a quality customer base and an international team with deep subject matter expertise. We continually make strides towards our mission to bring increased visibility and lower cost risk management to capital market organisations."The AIM traded company added that it is now focused on expanding recurring revenue through a strong sales pipeline of cross-selling opportunities and attracting new customers, aiming to become cash-flow positive, in run rate terms, in the second quarter of 2020 and before achieving profitability in 2021.Finally, KRM22 also announced that its chief operating officer Karen Bach, who is one of the co-founders of the company, will switch to a non-executive directorship at the beginning of July.KRM22's shares were up 2.78% at 77.60p at 1326 BST.