Lombard slips on profit warning

Lombard slips on profit warning

Shares in London-based Lombard Risk Management slumped after the vendor reported that its software division recorded a loss of more than £400,000 in the second half of the year.

The stock dropped 1.25 pence - or 13.80% - to 7.75 pence after Lombard warned that expected profitability in its software business was not achieved. The vendor had said in a March update it expected the unit to report a second half profit.

In today's statement Lombard says substantially all of £400,000 loss can be attributed to the delay in revenue recognition on two signed contracts which caused a deferral of around £370,000 of revenue.

Lombard says it now expects the software division to return profitability in the current financial year, helped by its STB Systems unit which is gaining revenue from Basel II changes in regulatory reporting requirements, which are due to come into force during 2008.

Lombard acquired the STB Systems - which supplies international regulatory, anti-money laundering and compliance systems to financial services firms - in September 2005. The vendor says it is still intends to actively "identify and pursue accretive acquisition opportunities".

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