MiFID II stalls Lombard Risk’s H1 revenue pipeline
25 October 2017 London
Image: Shutterstock
Lombard Risk has blamed “market distractions” for a 16.4 percent drop off in H1 revenue figures.
The collateral solutions provider cited upcoming regulatory deadlines, including the second Markets in Financial Instruments Directive, as the cause of “a temporary fall in services revenues and some delays in contract signings” in its half-year report.
Revenue for the year hit £12.7 million as of 30 September, down from the £15.2 million banked during the same period in 2016.
H1 annually recurring revenue up 4.9 percent to £6.4 million from £6.1 million in 2016, but sales bookings for the period was down 21.9 percent on the previous year, with software licence bookings dropping 63.6 percent.
Lombard Risk CEO Alastair Brown said: “We recognise that this has been a challenging first half for Lombard Risk. A number of opportunities we had hoped to secure in the period remain in the pipeline as market distractions such as MiFID II caused companies to delay on committing to new projects. “
“This leaves us much to do in the second half, and converting our strong visible pipeline will be crucial to us meeting market forecasts.”
In its report, the firm cited a number positive highlights of its year so far, including the extension of its partnership with DTCC, a new mandate for the foreign branch reporting of a Taiwanese bank, and the collateral manager’s first client win for Australian Prudential Regulatory Authority reporting.
Lombard Risk also signed six new AgileReporter clients from Europe, the Middle East and Africa.
Brown added: “However, with the size and quality of our pipeline at an all-time high, we remain confident this can be achieved. During the period strong foundations have been put in place, with an improved salesforce, a new development centre in Birmingham, and a renewed effort to target new business as well as extant cross-selling opportunities.”
“We expect delivery of a strong second half will enable the company to meet its stated objectives of being cash generative. We believe this positions Lombard Risk well for the future and we look forward to updating the market on progress during the second half of the financial year.”
News of Lombard Risk’s regulatory woes come shortly after the European Commission ruled out a soft rollout of MiFID II, which is set to come into force on 3 January.
In-scope firms will be expected to hit the implementation date despite or face the consequences.
The European Commission also revealed this week it is pursuing legal action against 19 member states, Belgium, France, Greece, that are failing to comply with MiFID II.
According to the commission, the offending countries are failing to update the regulator on the progress they have made in transposing MiFID II into domestic law.
The collateral solutions provider cited upcoming regulatory deadlines, including the second Markets in Financial Instruments Directive, as the cause of “a temporary fall in services revenues and some delays in contract signings” in its half-year report.
Revenue for the year hit £12.7 million as of 30 September, down from the £15.2 million banked during the same period in 2016.
H1 annually recurring revenue up 4.9 percent to £6.4 million from £6.1 million in 2016, but sales bookings for the period was down 21.9 percent on the previous year, with software licence bookings dropping 63.6 percent.
Lombard Risk CEO Alastair Brown said: “We recognise that this has been a challenging first half for Lombard Risk. A number of opportunities we had hoped to secure in the period remain in the pipeline as market distractions such as MiFID II caused companies to delay on committing to new projects. “
“This leaves us much to do in the second half, and converting our strong visible pipeline will be crucial to us meeting market forecasts.”
In its report, the firm cited a number positive highlights of its year so far, including the extension of its partnership with DTCC, a new mandate for the foreign branch reporting of a Taiwanese bank, and the collateral manager’s first client win for Australian Prudential Regulatory Authority reporting.
Lombard Risk also signed six new AgileReporter clients from Europe, the Middle East and Africa.
Brown added: “However, with the size and quality of our pipeline at an all-time high, we remain confident this can be achieved. During the period strong foundations have been put in place, with an improved salesforce, a new development centre in Birmingham, and a renewed effort to target new business as well as extant cross-selling opportunities.”
“We expect delivery of a strong second half will enable the company to meet its stated objectives of being cash generative. We believe this positions Lombard Risk well for the future and we look forward to updating the market on progress during the second half of the financial year.”
News of Lombard Risk’s regulatory woes come shortly after the European Commission ruled out a soft rollout of MiFID II, which is set to come into force on 3 January.
In-scope firms will be expected to hit the implementation date despite or face the consequences.
The European Commission also revealed this week it is pursuing legal action against 19 member states, Belgium, France, Greece, that are failing to comply with MiFID II.
According to the commission, the offending countries are failing to update the regulator on the progress they have made in transposing MiFID II into domestic law.
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