Defenx plc Trading Update (5210U)

TIDMDFX

RNS Number : 5210U

Defenx plc

25 October 2017

25 October 2017

Defenx PLC

("Defenx" or the "Company" or, together with its subsidiaries, the "Group")

Trading Update

Defenx PLC (AIM:DFX), the cyber-security software group, announces an update on current trading.

As explained in the Company's trading update on 22 June 2017 and in the interim results announced on 27 September 2017, the Group's full year revenue outcome is particularly dependent on when a small number of high value contracts start and the treatment of the resultant billings under the Group's revenue recognition policy.

Since the release of the interim results, it has become clear that previously anticipated sales orders are unlikely to be recognised in 2017, with a corresponding adverse impact on the Group's financial performance for the year to 31 December 2017. While the Group continues the development of its core security, backup and protection products, the delivery of product updates to address certain recently-identified performance issues and back-end integration is taking longer than expected. Further, the broadening of the Company's product portfolio, notably to address the corporate sector, is behind schedule. Accordingly, the conversion of opportunities into firm orders is taking longer and requiring more investment than was initially anticipated.

The Group is planning to start the strategic partnership with BV-Tech SpA ("BV-Tech") as soon as possible. The Master Services Agreement with BV-Tech has only recently been signed, which allows BV-Tech to be a technology partner and support us in our development activities. BV-Tech may become, in the future, an important channel to corporate customers to whom expanded product portfolio can be sold.

These factors combined are expected to result in the financial results for the year to 31 December 2017 being materially below market forecasts and the Board currently expects to report a loss for the full year. The Board is satisfied that Group's cash and available facilities in the region of EUR2.2 million are sufficient for its current requirements.

A formal process is now underway to strengthen the executive management team including the recruitment of both a Group COO and a Group CTO to lead the operational and development teams. This is intended to accelerate the internalisation of the Group's development activities, ensure its products remain competitive in fast-moving markets, and to enhance the Group's sales capacity.

The Company continues to believe that seeking to address the corporate market in addition to its existing consumer-focused channel partner model is the right strategy to ensure that profitable revenue growth is delivered in the medium and long-term.

Enquiries

 
 Defenx PLC 
  Andrea Stecconi - Chief Executive Officer 
  Philipp Prince - Chief Financial Officer     020 3769 0687 
 IFC Advisory (Financial PR and IR) 
  Tim Metcalfe / Graham Herring / Heather 
  Armstrong                                    020 3053 8671 
 Strand Hanson Limited (Nominated and 
  Financial Adviser) 
  Richard Tulloch / Ritchie Balmer / 
  James Bellman                                020 7409 3494 
 WH Ireland (Joint-Broker) 
  Adrian Hadden / Alex Bond                    020 7220 1666 
 Beaufort Securities (Joint-Broker) 
  Jon Belliss                                  020 7382 8300 
 

About Defenx

Founded in 2009, Defenx is a fast-growing and profitable cyber-security software group that offers a range of Security, Backup and Protection solutions for smartphones, PCs and networks.

A channel sales strategy, focused on flexibility, white-labelling and profit-share arrangements with distributors, telecoms companies and hardware manufacturers, enables Defenx to compete with established industry incumbents. Defenx's global distribution partners currently include 3Italia, Türk Telecom and Western Digital, amongst others including telecoms operators, systems integrators and original equipment manufacturers.

Defenx was admitted to trading on AIM on 3 December 2015, acquired Memopal Srl in August 2016 and announced a strategic partnership with BV-Tech, an Italian IT solutions provider, in April 2017. These have allowed the Company to diversify its product portfolio and grow its customer base by adding proprietary cloud backup and encryption technology as well as new channel partners.

Web: investors.defenx.com

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

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October 25, 2017 02:00 ET (06:00 GMT)