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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Corero Network Security Plc | LSE:CNS | London | Ordinary Share | GB00B54X0432 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.25 | 2.08% | 12.25 | 12.00 | 12.50 | 12.50 | 12.25 | 12.25 | 833,958 | 14:52:42 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computers & Software-whsl | 20.12M | 554k | 0.0011 | 111.36 | 62.33M |
From Apr 2019 to Apr 2024
TIDMCNS
RNS Number : 6203J
Corero Network Security PLC
13 September 2016
13 September 2016
Corero Network Security plc (AIM: CNS)
("Corero" or the "Company")
Interim results for the six month period ended 30 June 2016
Corero Network Security plc (AIM: CNS), the AIM listed network security company, announces its half yearly report for the six month period ended 30 June 2016.
Financial Highlights:
-- Revenue $4.8 million, a 20% increase over the prior period (H1 2015: $4.0 million)
o SmartWall TDS revenue growth 125% over H1 2015 (37% over H2 2015)
o Increase in average new customer contract value ($218,000 vs $141,000)
-- EBITDA loss* $2.5 million (H1 2015: loss $3.5 million) -- Loss before tax $4.1 million (H1 2015: loss $5.6 million) -- Loss per share 2.4 cents (H1 2015: loss per share 4.7 cents) -- Equity fund raise of $11.4 million net of costs (10 May 2016) -- Net cash of $8.7 million at 30 June 2016 (30 June 2015: net cash $0.5 million)
* before depreciation, amortisation and financing costs
Operating Highlights:
-- Significant European SmartWall TDS wins from hosting and regional service providers -- Largest customer win to date ($0.7 million) from US provider in the cloud services market -- Significant US hosting provider customer win against market leader -- First customer win from mobile network operator -- Earned top position and coveted "Recommended" rating in NSS Labs DDoS product test
o Validation of the industry-leading capabilities of Corero's SmartWall TDS
-- Winner of multiple awards -- "Best Network Security Solution" (2016 Cyber Defense Magazine InfoSec Awards)
Full year trading update and outlook
The Board is encouraged by the increase in SmartWall TDS revenue, which has grown considerably for the third consecutive six month period, with significant customer wins, both in terms of size and strategic importance. This growth is expected to continue into the second half of 2016.
Whilst new contract momentum is expected to continue, revenues and results for the full year to 31 December 2016 will be notably below market expectations. This is firstly as a result of large opportunities taking longer to close than originally anticipated. The Company continues to pursue these opportunities and remains optimistic that it is well positioned to win the business.
Secondly, the Company expects an increase in Service Providers and Hosting Providers seeking to utilize Corero's products and technology via an "as-a-service" subscription-based offering. This sales model reduces recognised revenue at the time of the customer order, but increases the contract value and revenues over the life of the deal.
Based on the progress in the first half of 2016 and expectation of new business wins in the remainder of 2016, the Board is positive about the future prospects for the Company.
Ashley Stephenson, CEO of Corero, commented:
"During the first half of 2016 Corero made significant progress establishing itself as a leading DDoS technology and product vendor. Corero's SmartWall TDS received NSS Test labs "Recommended" rating providing important independent validation of its security efficacy with negligible false positives at unprecedented levels of price/performance.
"In the same period several Top 10 providers in their respective markets selected our SmartWall product. We have an increasing number of satisfied customers who are willing to be industry references for the breakthrough levels of automation, security and service that Corero delivers.
"Looking forward we expect new deal momentum to continue and for consumption of our DDoS Protection "as-a-service" offering to increase. We are also optimistic of securing strategic partnerships with some of the largest ecosystem players in the networking, security and cloud markets.
"We are disappointed to fall short of market expectations for the full year, but remain positive for the future prospects for the Company."
This announcement contains inside information.
Enquiries:
Hot Features
Premium
Corero Network Security plc
Andrew Miller, CFO Tel: 01895 876
382
Cenkos Securities plc Tel: 020 7397
8900
Bobbie Hilliam - NOMAD
Alex Aylen - Corporate Broking
Redleaf Communications Tel: 020 7382
4747
Rebecca Sanders-Hewett/David Ison/Susie cns@redleafpr.com
Hudson
About Corero Network Security
Corero Network Security is the leader in real-time, high-performance DDoS defense solutions. Service providers, hosting providers and online enterprises rely on Corero's award winning technology to eliminate the DDoS threat to their environment through automatic attack detection and mitigation, coupled with complete network visibility, analytics and reporting. This next-generation technology provides a First Line of Defense(R) against DDoS attacks in the most complex environments while enabling a more cost effective economic model than previously available. For more information, visit www.corero.com
Interim results for the six month period ended 30 June 2016
Overview
Highlights in the first half of 2016 include:
-- Significant European SmartWall TDS wins from hosting and regional service providers -- Largest customer win to date ($0.7 million) from US provider in the cloud services market -- Significant US hosting provider customer win against market leader -- First customer win from mobile network operator -- Earned top position and coveted "Recommended" rating in NSS Labs DDoS product test
o Validation of the industry-leading capabilities of Corero's SmartWall TDS
-- Winner of multiple awards -- "Best Network Security Solution" (2016 Cyber Defense Magazine InfoSec Awards)
Financial Summary
In the six months to 30 June 2016, Corero reported revenue of $4.8 million (H1 2015: $4.0 million) and an EBITDA loss of $2.5 million (H1 2015: loss $3.5 million). SmartWall TDS revenue grew 125% over H1 2015 (37% over H2 2015).
Operating costs net of capitalised R&D were $6.3 million (H1 2015: $6.7 million). Included in operating costs was an unrealised exchange gain of $0.8m (H1 2015: loss $0.02 million) arising on an intercompany loan. Capitalised R&D costs were $1.5 million (H1 2015: $1.1 million).
The loss before taxation was $4.1 million (H1 2015: loss $5.6 million) including amortisation of capitalised R&D of $1.1 million (H1 2015: $1.1 million) and amortisation of acquired intangible software assets $0.2 million (H1 2015: $0.5 million). The software intangible assets were amortised over 5 years ending in March 2016. The reported loss per share was 2.4 cents (H1 2015: 4.7 cents).
Corero had cash of $8.7 million at 30 June 2016 (2015: $1.1 million), having raised GBP7.9 million net of costs in May 2016. The Company has no debt at 30 June 2016 (2015: $0.7 million). The net reduction in cash from operating activities in the 6 months ended 30 June 2016 was $2.0 million (H1 2015: net reduction $4.1 million).
Market Opportunity
Corero has made encouraging progress in winning repeatable business in the Tier 2 and 3 Service Provider and Hosting Provider markets to date. Demand in these market segments for automatic, in-line, real time DDoS protection continues to grow and represents a significant opportunity for Corero and its SmartWall TDS product.
The Company has also successfully engaged with a number of US and European Tier 1 Service Providers, which has validated the appeal of the Company's technology in this market. To help broaden and accelerate its go-to-market, Corero has commenced strategic partner relationship discussions with some of the world's leading technology vendors. Corero believes that a strategic partner would be able to accelerate the adoption of Corero's technology in this market sector and deliver significant revenue growth.
Full year trading update and outlook
The Board is encouraged by the increase in SmartWall TDS revenue, which has grown considerably for the third consecutive six month period, with significant customer wins, both in terms of size and strategic importance. This growth is expected to continue into the second half of 2016.
Whilst new contract momentum is expected to continue, revenues and results for the full year to 31 December 2016 will be notably below market expectations. This is firstly as a result of large opportunities taking longer to close than originally anticipated. The Company continues to pursue these opportunities and remains optimistic that it is well positioned to win the business.
Secondly, the Company expects an increase in Service Providers and Hosting Providers seeking to utilize Corero's products and technology via an "as-a-service" subscription-based offering. This sales model reduces recognised revenue at the time of the customer order, but increases the contract value and revenues over the life of the deal.
Based on the progress in the first half of 2016 and expectation of new business wins in the remainder of 2016, the Board is positive about the future prospects for the Company.
Consolidated Interim Statement of Comprehensive Income
for the six month period ended 30 June 2016
Unaudited six months ended Unaudited six months ended Audited year ended 31
30 June 30 June December
2016 2015 2015
Restated*
$'000 $'000 $'000
Revenue 4,791 4,032 8,340
Cost of sales (1,002) (865) (2,073)
---------------------------- ---------------------------- ----------------------------
Gross profit 3,789 3,167 6,267
---------------------------- ---------------------------- ---------------------------- ----------------------------
Operating expenses before
highlighted item (6,274) (6,665) (12,699)
Depreciation and
amortisation of
intangible assets (1,601) (2,116) (5,174)
---------------------------- ---------------------------- ---------------------------- ----------------------------
Operating expenses (7,875) (8,781) (17,873)
Operating loss (4,086) (5,614) (11,606)
Finance income 4 8 11
Finance costs (6) (13) (20)
---------------------------- ---------------------------- ----------------------------
Loss before taxation (4,088) (5,619) (11,615)
Taxation 68 191 382
---------------------------- ---------------------------- ----------------------------
Loss for the period (4,020) (5,428) (11,233)
Other comprehensive expense
Difference on translation
of UK functional currency
entities (1,533) (109) (482)
Total comprehensive expense
for the period (5,553) (5,537) (11,715)
---------------------------- ---------------------------- ----------------------------
Total loss for the period
attributable to:
Equity holders of the
parent (4,020) (5,428) (11,233)
Total (4,020) (5,428) (11,233)
---------------------------- ---------------------------- ----------------------------
Total comprehensive
expense for the period
attributable to:
Equity holders of the
parent (5,553) (5,537) (11,715)
Total (5,553) (5,537) (11,175)
---------------------------- ---------------------------- ----------------------------
Basic and diluted loss
per share
31 December
30 June 30 June 2015
2016 2015
Cents Cents Cents
Basic and diluted loss
per share (2.4) (4.7) (8.5)
-------- ---------- ------------
*Support costs of $0.8 million previously included in Cost of sales are now included in Operating expenses before highlighted items
Consolidated Interim Statement of Financial Position
as at 30 June 2016
Unaudited six months ended Unaudited six months ended Audited year ended 31
30 June 30 June December
2016 2015 2015
$'000 $'000 $'000
Assets
Non-current assets
Goodwill 17,983 17,983 17,983
Acquired intangible assets 139 938 375
Capitalised development
expenditure 8,056 8,553 7,620
Property, plant and
equipment 882 1,072 893
27,060 28,546 26,871
Current assets
Inventories 641 466 661
Trade and other receivables 2,350 2,420 3,966
Cash and cash equivalents 8,693 1,128 2,706
---------------------------- ---------------------------- ----------------------------
11,684 4,014 7,333
Liabilities
Current Liabilities
Trade and other payables (2,346) (2,291) (2,551)
Borrowings - (653) -
Deferred income (3,043) (3,460) (3,791)
(5,389) (6,404) (6,342)
Net current
assets/(liabilities) 6,295 (2,390) 991
Non-current liabilities
Deferred income (1,162) (965) (1,439)
Deferred taxation (17) (276) (85)
---------------------------- ---------------------------- ----------------------------
(1,179) (1,241) (1,524)
---------------------------- ---------------------------- ----------------------------
Net assets 32,176 24,915 26,338
---------------------------- ---------------------------- ----------------------------
Equity
Ordinary share capital 3,119 1,804 2,573
Capital redemption reserve 7,051 7,051 7,051
Share premium 67,680 50,000 56,835
Share options reserve 282 285 282
Translation reserve (1,301) 605 232
Retained earnings (44,655) (34,830) (40,635)
---------------------------- ---------------------------- ----------------------------
Total equity 32,176 24,915 26,338
---------------------------- ---------------------------- ----------------------------
Consolidated Interim Statement of Cash Flows
for the six month period ended 30 June 2016
Unaudited six months ended Unaudited six months ended Audited year ended 31
30 June 30 June December
2016 2015 2015
Cash flows from operating
activities $'000 $'000 $'000
Loss for the period (4,020) (5,428) (11,233)
Adjustments for:
Amortisation of acquired
intangible assets 239 613 1,210
Amortisation of capitalised
development expenditure 1,074 1,140 3,289
Depreciation 288 363 675
Finance income (4) (8) (11)
Finance expense 6 13 20
Taxation (68) (191) (382)
Share based payment credit - - (3)
Decrease in inventories 20 283 88
Decrease/(increase) in trade
and other receivables 1,585 391 (1,167)
Decrease in payables (1,160) (1,271) (168)
---------------------------- ---------------------------- ----------------------------
Net cash from operating
activities (2,040) (4,095) (7,682)
Cash flows from investing
activities
Purchase of intangible
assets (3) (3) (37)
Capitalised development
expenditure (1,510) (1,069) (2,285)
Purchase of property, plant
and equipment (277) (260) (392)
Net cash used in investing
activities (1,790) (1,332) (2,714)
Cash flows from financing
activities
Net proceeds from issue of
ordinary share capital 11,391 - 7,604
Finance income 4 8 11
Finance expense (6) (13) (20)
Receipt/(repayment) of
credit facility - 633 (20)
---------------------------- ---------------------------- ----------------------------
Net cash from financing
activities 11,389 628 7,575
Effects of exchange rates on
cash and cash equivalents (1,572) (109) (509)
Net increase/(decrease) in
cash and cash equivalents 5,987 (4,908) (3,330)
Cash and cash equivalents at
1 January 2,706 6,036 6,036
---------------------------- ---------------------------- ----------------------------
Cash and cash equivalents at
balance sheet dates 8,693 1,128 2,706
---------------------------- ---------------------------- ----------------------------
Consolidated Interim Statement of Changes in Equity
for the six month period ended 30 June 2016
Total
attributable
Capital Share Share to equity
Share redemption premium options Translation Retained holders of
capital reserve account reserve reserve earnings the parent
$'000 $'000 $'000 $'000 $'000 $'000 $'000
1 January 2015 8,855 - 50,000 285 714 (29,402) 30,452
Loss for the period - - - - - (5,428) (5,428)
Other comprehensive expense - - - - (109) - (109)
-------- ----------- -------- -------- ------------ --------- -------------
Total comprehensive expense for the period - - - - (109) (5,428) (5,537)
-------- ----------- -------- -------- ------------ --------- -------------
Contributions by and distributions to owners
Shares purchased for cancellation (7,051) 7,051 - - - - -
-------- ----------- -------- -------- ------------ --------- -------------
Total contributions by and distributions to owners (7,051) 7,051 - - - - -
-------- ----------- -------- -------- ------------ --------- -------------
30 June 2015 1,804 7,051 50,000 285 605 (34,830) 24,915
Loss for the period - - - - - (5,805) (5,805)
Other comprehensive expense - - - - (373) - (373)
-------- ----------- -------- -------- ------------ --------- -------------
Total comprehensive expense for the period - - - - (373) (5,805) (6,178)
Contributions by and distributions to owners
Share based payments - - - (3) - - (3)
Issue of share capital 769 - 6,835 - - - 7,604
Total contributions by and distributions to owners 769 - 6,835 (3) - - 7,601
31 December 2015 2,573 7,051 56,835 282 232 (40,635) 26,338
Loss for the period - - - - - (4,020) (4,020)
Other comprehensive expense - - - - (1,533) - (1,533)
-------- ----------- -------- -------- ------------ --------- -------------
Total comprehensive expense for the period - - - - (1,533) (4,020) (5,553)
Contributions by and distributions to owners
Issue of share capital 546 - 10,845 - - - 11,391
Total contributions by and distributions to owners 546 - 10,845 - - - 11,391
30 June 2016 3,119 7,051 67,680 282 (1,301) (44,655) 32,176
-------- ----------- -------- -------- ------------ --------- -------------
The capital redemption reserve arose as result of the Company's purchase of the entire deferred share capital of 1,518,900 GBP2.99 shares for a consideration of 1p on 17 June 2015 and subsequent cancellation on 22 June 2015.
Notes to the interim financial statements
1. General information and basis of preparation
Corero Network Security plc (the "Company") is a company domiciled in England. The condensed consolidated interim financial statements of the Company for the six months ended 30 June 2016comprise the Company and its subsidiaries (together referred to as the "Group").
These condensed consolidated financial statements have been prepared in accordance with IAS 34,
"Interim Financial Reporting", as adopted by the European Union. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2015 Annual Report. The financial information for the half years ended 30 June 2016 and 30 June 2015 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited.
The annual financial statements of Corero Network Security plc are prepared in accordance with
IFRSs as adopted by the European Union. The comparative financial information for the year ended
31 December 2015 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2015 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial
Statement for 2015 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The consolidated financial statements have been prepared on a going concern basis as the Directors believe that the current sales prospects, combined with existing working capital resources, fund raise post the balance sheet date and available funding options, should ensure that the Group has adequate working capital to service its existing business for the foreseeable future. The directors have made this assessment based on internal forecasts and cash flow projections.
These consolidated interim financial statements were approved by the Board on 12 September 2016 and approved for issue on 13 September 2016.
2. Loss per share
Loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.
At the reporting dates there were no potentially dilutive ordinary shares. Therefore the diluted loss per share is equal to the loss per share.
30 June 2016 30 June 2015
weighted weighted
average average
30 June 2016 number of 1p 30 June 2016 30 June 2015 number of 1p 30 June 2015
loss shares loss per share loss shares loss per share
$'000 Thousand Cents $'000 Thousand Cents
Basic and
diluted loss
per share (4,020) 168,276 (2.4) (5,428) 115,637 (4.7)
--------------- -------------- --------------- --------------- -------------- ---------------
31 Dec 2015 weighted average
31 Dec 2015 loss number of 1p shares 31 Dec 2015 loss per share
$'000 Thousand Cents
Basic and diluted earnings per
share (11,233) 132,761 (8.5)
----------------- ----------------------------- ---------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMGMLNZLGVZM
(END) Dow Jones Newswires
September 13, 2016 02:00 ET (06:00 GMT)
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