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Lombard swings to H1 profit on new FSA liquidity regs

18 October 2010  |  5062 views  |  0 Risk on chalkboard

Lombard Risk Management swung to a first half net profit on strong revenue growth as the vendor cashed in on new Financial Services Authority (FSA) liquidity standards regulations.

The UK-based provider of risk management software saw revenues for the six months of £5.8 million, a rise of 34% on the £4.3 million recorded in the same period the previous year.

Profit after tax was £0.2 million, compared to a £0.8 million loss in H1 2009. Cash at end of period was £1.3 million with no debt.

Lombard says that its trading and risk management unit posted a profit for the period as it reaped the benefits of the financial crisis but the regulatory operation was the major winner, thanks largely to the FSA's Liquidity Standards changes.

These will continue to benefit the firm in the second half, as will some other changes on capital standards. Longer term, Lombard also cites Basel 3 and Solvency 2 as factors which will help business.

Second half results are also expected to see the benefits of the cost reduction programme recently implemented.

John Wisbey, chief executive, Lombard, says: "As well as achieving revenue growth, we have made appreciable cost savings during the period, which have allowed us to invest in areas where we see future growth opportunities. The board sees considerable opportunity within the company's chosen segments of regulation, risk and reporting and the clear goal is for Lombard Risk, over the next few years, to increase its market share particularly in expanding markets."

Lombard shares were up 0.25 pence, or 6.06%, to 4.75 pence per share in mid-morning trading.

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