Regtech looks to get back on its feet after share crash last September

Regtech Open Project  (RTOP), a firm which provides business and operational resilience software, has updated markets on its turnaround plan after its shares crashed last September.

The company, which listed on the main market last August, suffered a major setback last year when its shares plummeted from 235p per share to under 10p per share, in November.

Its share price dropped reportedly due to a lack of liquidity, and the company launched a strategic growth plan, focusing on modernising and expansion.

The company updated markets this morning with its chief executive saying the market for operational resilience is “set to expand rapidly” this year due to Digital Operational Resilience Act (DORA) guidance, which has a deadline of January 2025.

It said on average, nine out of ten customers renewed their subscriptions in the last year, while billings for recurring software subscriptions across all products increased 17 per cent. It added that recurring revenues billed represented 58 per cent of total billings.

Regtech said the turnaround growth plan is underway, with a focus on converting legacy product clients to subscription-based products, while “capturing significant new sales opportunities driven by operational resilience regulation”.

The firm also said it would focus on the launch of an additional “scalable business line in InsurTech” with a view to onboarding corporate clients in 2024.

Saying it had been an “encouraging start to the year” the update said the the trading outlook targets are in excess of 120 per cent net revenue retention, with a pipeline of new business, including “several tenders with leading blue-chip organisations including a national central bank in the European Union”.

On capturing new sales opportunities, the firm said it would be driven by DORA operational resilience regulation.

“With the January 2025 compliance deadline for the Digital Operational Resiliency ACT (DORA) there is significant priority and momentum in financial services and among the ICT suppliers to invest in meeting their DORA obligations.”

“We estimate the addressable market to be c.£12bn globally, with the European market making up c.£3.5bn of this figure.

“This market is directly in the sweet spot for RTOP”.

Regtech said it had  £0.4m booked year-to-date.

Chief executive Ian Halliday-Pegg said: “Initial progress on the strategic initiatives of subscription conversion and the exciting, highly scalable InsurTech additional business line are tracking against plan and herald a new era for RTOP as it moves away from its historical business into high-growth, high profit repeatable revenues.”

“2023 has been a significant transition year for RTOP, both committing to its operational resilience vision, and listing on the London Stock Exchange main market to leverage capital markets and enable investment in strategic initiatives to accelerate our growth.”

“As a result, whilst overall revenues have reduced, the quality of revenues has improved – with the percentage of recurring revenues increasing from 32 per cent to 58 per cent and increases in subscription revenues year-on-year for our operational resilience solutions.”