Trading update and notice of results

RNS Number : 8600I

Corero Network Security PLC

31 July 2012

 



Corero Network Security plc (AIM: CNS)

("Corero" or "the Group")

Trading update and notice of results

Corero Network Security plc, the AIM listed network security and business software provider, is pleased to provide an update on trading for the six months ended 30 June 2012.

Subsequent to the acquisition and integration of the US-based Corero Network Security ("CNS") division during 2011, the board of Corero have resolved to change the Group's reporting currency to US Dollars ("$") which is more closely aligned to the profile of the Group's revenue and operating profit. The change will be effective from 1 January 2012 and thus the results for the six months ended 30 June 2012 will be reported in $ with the relevant comparatives restated from GBP Sterling to $.

Trading update highlights:

·     Group revenue for the full year is expected to show strong growth over the previous year

·     Strong first half year-on-year order intake growth for Corero Network Security (18% growth) and Corero Business Systems (19% growth)

·     Macroeconomic uncertainty across Europe is affecting rate of sales growth

·     Group committed to continuing to invest in CNS division and "First Line of Defence" next generation product

·     Strong balance sheet with cash of $9.2 million at 30 June 2012 (2011: $8.5 million)

Corero Network Security ("CNS"):

Corero Network Security sales order intake (bookings as opposed to amounts recognised as revenue) in the six months ended 30 June 2012 increased 18% to $6.7 million (2011: $5.6 million).

Highlights in the first half of 2012 include:

·     41 new customers (2011: 38) with an average value of $52,000 (2011: $40,000)

·     Continued strong performance in core verticals of gaming, e-betting and e-retail

·     Continued investment in terms of new product features and functionality

o  Launched "ReputationWatch" which identifies known malicious entities in real-time to dynamically prevent Distributed Denial of Service ("DDoS") cyber attacks

·     Strong pipeline of opportunities going into the second half of 2012

·     Ranked by Gartner as "a Visionary" in the IPS Magic Quadrant published in July 2012

·     Appointment of Ashley Stephenson as Executive Vice President responsible for CNS's product and solutions strategy

CNS is refocusing its positioning and go-to-market proposition as a "First Line of Defence" solution to leverage both its industry leading DDoS and intrusion prevention technology into a compelling solution for the corporate and service provider market. The DDoS market is growing strongly with industry research from Infonetics showing that the DDoS prevention appliance market is forecast to more than double to $450 million from 2011 to 2015.  In addition, Forrester research confirms that DDoS protection is one of the top five security technology growth opportunities for the next three years given the increase in "hactivism".

CNS is planning to release a next generation product in 2013, leveraging existing intellectual property, which will target not only the corporate enterprise and data hosting markets but also the high growth IT cloud service provider market with a hardware platform independent First Line of Defence solution which will also be deployable in virtual IT environments, thereby significantly increasing its addressable market.

Corero Business Systems ("CBS"):

Corero Business Systems, which operates as a stand-alone business, continues to perform strongly with sales order intake (bookings as opposed to amounts recognised as revenue) in the six month period ended 30 June 2012 up 19% to $4.7 million (2011: $4.0 million).

Highlights in the first half of 2012 include:

·     143 new academy and school customers (2011: 114) - to a total of 450 academy and school customers

·     2 new college customers for the Resource EMS solution (2011: 0)

·     New academy group wins

o  Outwood Grange Academy Trust, Wakefield (initially 5 schools)

o  Templer Academy Schools Trust, Newton Abbot (initially 3 schools)

o  Reach2 Academy Trust, London (initially 3 schools)  

·     Further expansion contracts from existing academy groups

o  Kemnal Academies Trust added a further 21 schools to their group (bringing the total number of academies they will manage in 2012 to 32 academies)

o  The School Partnership Trust added a further 10 schools to their group (bringing the total number of academies they will manage in 2012 to 30 academies)

·     Serco relationship delivering incremental new business

Andrew Miller, COO of Corero, commented: "We are pleased to report ongoing growth in both our core businesses. Feedback from channel partners and customers, and industry analyst research, coupled with the significant threat from the increasing volume and sophistication of DDoS cyber attacks, gives us confidence that the CNS "First Line of Defence" positioning will provide stronger revenue growth prospects."

"CBS enjoyed another period of strong growth from new customer wins through direct and partner sales efforts.  The business continues to invest in its two key software products - Resource Financials & HR and Resource EMS."

"The Board is confident that both businesses will deliver strong medium-term growth, giving us visibility of a path to Group profitability."

Corero Network Security plc expects to announce its interim results for the six months ended 30 June 2012 in the week commencing 3 September 2012.

Enquiries:

Corero Network Security plc
Andrew Miller, Group Chief Operating Officer		Tel: [phone]
FinnCap
Stuart Andrews/Henrik Persson		Tel: [phone]
Walbrook PR		Tel: [phone]
Paul McManus (Media Relations)	Mob: [phone] or [e-mail]
Helen Westaway (Media Relations)	Mob: [phone] or [e-mail]
Paul Cornelius (Investor Relations)	Mob: [phone] or [e-mail]

About Corero Network Security

Corero Network Security plc consists of two businesses: Corero Network Security and Corero Business Systems.

Corero Network Security is an international network security company and the leading provider of Distributed Denial of Service (DDoS) defence and Next Generation Intrusion Prevention Systems (NGIPS) solutions. As the First Line of Defense, Corero's products and services stop DDoS attacks, protect IT infrastructure and eliminate downtime. Customers include enterprises, service providers and government organizations worldwide. Corero's appliance-based solutions are dynamic and automatically respond to evolving cyber attacks, known and unknown, allowing existing IT infrastructure -- such as firewalls -- to perform their intended purposes. Corero's products are transparent, highly scalable and feature the lowest latency and highest reliability in the industry.

Corero Business Systems is a leading provider of powerful and dynamic modular accounting, human resources, payroll and management information software to the schools (including academies) and further education sectors in the UK and internationally.  

 

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