KRM22 plc

www.krm22.com TICKER: KRM     EXCHANGE: AIM

KRM22 is a pioneer in the rapidly expanding RiskTech sector. 
Its talented board led by Exec Chairman Keith Todd (FFastFill), COO Karen Bach and Stephen Casner (US CEO) aim to create a Global Risk Platform (GRP) focusing on the capital markets.

LATEST REPORTS

 
KRM22 at the Equity Development investor forum September 2018
Published: Oct 03 2018

KRM22's management Keith Todd CEO, Karen Bach COO, and Stephen Casner CEO Americas discuss their most recent acquisition and placing in RegTech, and the progress made in the first 150 days of listing.â€
 
'Huge' opportunity ahead in RiskTech
Published: Sep 26 2018

KRM22 is a pioneer in the rapidly expanding RiskTech sector. Its talented board led by Exec Chairman and CEO Keith Todd (FFastFill), COO Karen Bach and Stephen Casner (US CEO) aim to create a Global Risk Platform (GRP) focusing on the capital markets.
Its USPs will be real-time reporting/evaluation, a state-of-the-art ‘risk cockpit’ covering all major areas and superior risk management software at a fraction of the overall cost. 
Rome wasn’t built in a day, and neither were the $100+ trillion global capital markets. However for Risktech pioneer KRM22, things are certainly taking shape in double quick time. Developing its proprietary Global Risk Platform (GRP), assembling a crack team of software engineers and expanding into new territories. Meanwhile on the M&A front - after IPO’ing on AIM in April at 100p/share, raising gross proceeds of £10.32m (£9.8m net) – the Board even managed to fit the purchase of a 60% stake in London based Irisium in June from Cinnober (9.7% KRM22 shareholder) for an enterprise value (EV) of £3,057k (ie cash/debt free, including a £0.6m earn-out). 
Shortly after completion Irisium signed up its 14th customer (operating in crypto-currencies), lifting group annualised SaaS revenues to c. £1.1m. Over the past few years digital currencies have been greatly cleaned up, with Bitcoin Futures now traded in many countries. Hence requiring national authorities, exchanges and brokers to adopt applications such as Irisium’s to help police these alternative asset classes.
Going forward, we understand management have identified 50 other potential acquisition targets, of which discussions are ongoing with several. This is interesting because in our view, the RiskTech sector is populated by far too many sub-scale tech-rich startups (<£10m in turnover) that would benefit by being part of a much larger and better funded entity.
In fact, right on cue came news yesterday at 3.30pm that the company had acquired Prime Analytics (PA), a Chicago based risk management software firm, for a maximum price of $7.5m - split $3.5m cash & $1.0m shares (at 101p) on completion, along with a 2 year earn-out worth up to $3.0m based on year 1 & 2 revenues. The upfront consideration is being funded via a placing of 3,282,634 new shares to raise £3.32m at 101p (equivalent to a 33% discount to the closing price on 24th September).
Yesterday’s H1’18 numbers saw adjusted EBITDA (ex SBPs of £158k) come in at -£869k on sales of £73k, with June closing gross funds of £6,945k, or £6,357k net. Looking forward and assuming things go to plan, by 2020 we see no reason why KRM22 shouldn’t be able to achieve recurring revenues of >£20m pa. Which, based on average FinTech multiples of between 4-6x EV/sales or 20-25x EV/EBIT, would imply an enterprise value of £80m-£120m vs £21m today.

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