KRM22 PLC (LON:KRM) said it expects to report a “significant improved” adjusted EBITDA loss for its 2020 financial year and highlighted a number of contracts expected to be signed in early 2021.
In a trading update for the year to December 31, 2020, the investment software firm forecast an adjusted EBITDA loss for the year of £0.1mln, narrowed from £3.1mln in 2019, while revenues are expected to rise to £4.6mln from £4.1mln.
WATCH: KRM22's Keith Todd highlights 'good half year' as revenue climbs 31% to £2.3mln
The company also said it has a near-term pipeline of deals worth £0.5mln of annual recurring revenue (ARR) which are in final negotiations and expected to be signed in the first quarter of 2021. For 2020 the company’s ARR was flat at £4.3mln, although KRM said new contracted ARR during the year was made up of “higher quality customers”.
The firm highlighted that it has also signed contracts with two, tier one banks in the second half of the year, one of which will lead to “significant contracted ARR in 2021”. Total new contract ARR for 2020 was £0.8mln.
Meanwhile, KRM said that the level of churn in 2020 was “significantly higher” than previously party due to the effects of the coronavirus (COVID-19) pandemic, although it expects this to stabilise in 2021.
The firm added that it is continuing to tightly control costs and that its net debt at the end of 2020 stood at £1mln.
“The year has been challenging but we have made good progress in improving the quality of our customer revenue base with increased cross-sale opportunities and a significant reduction in our adjusted EBITDA loss. The strengthened balance sheet provides a sound financial base for 2021”, KRM22 executive chairman Keith Todd said in a statement.
“Our Global Risk Platform has matured well and has an increasing positive impact in creating new sales opportunities. The KRM22 business is in a much stronger position than a year ago and is well placed for growth in 2021”, he added.