Trading update

RNS Number : 5395M

Corero Network Security PLC

17 July 2014

 



17 July 2014

Corero Network Security plc

("Corero", the "Company" or the "Group")

Trading update

Corero Network Security plc (AIM: CNS), a leading provider of security solutions for defending against DDoS (Distributed Denial of Service) attacks and cyber threats, is pleased to provide an update on trading for the six months ended 30 June 2014.

Management expects revenue and loss before interest, tax and amortisation ("EBITDA") levels for the full year, and net cash at 31 December 2014, to be in line with market expectations.

First half highlights:

·      Successful launch and commercial introduction of the SmartWall™ Threat Defense System
("SmartWall"), with first two customer sales in June and a growing pipeline

·      Order intake increased 7% compared to H1 2013

·      12 customers with orders exceeding $100,000 in the period

·      Largest enterprise sale of First Line of Defense DDS solution

·     Net cash of $5.0m at 30 June 2014                                                                                                                   

The focus for Corero in 2014 continues to be the successful launch and commercial introduction of SmartWall, Corero's new family of products which expands the Company's addressable market to include Internet service providers and hosting providers. SmartWall enables these providers to offer comprehensive DDoS and cyber threat protection services to their customers.

Corero achieved important technical and commercial milestones in the period to 30 June 2014 including the first two SmartWall customer sales in June, in line with plans set out at the beginning of 2014.  Prospective customer interest in SmartWall is strong with a growing pipeline of opportunities for the second half of 2014 following the general availability release of the product in June.    

Despite the typical longer sales cycles for larger deals, order intake in the first six months included 12 customers with orders exceeding $100,000 (compared with 7 in the first half of 2013) comprising mainly DDS First Line of Defense sales but also the first two SmartWall customer sales.  DDS is Corero's existing solution for protecting enterprise and public sector organisations.

Sales order intake was $4.5 million in the six months ended 30 June 2014, an increase of 7% over the comparative period in 2013.  The Company expects revenue recognised during the first six months, comprising mainly revenue from existing product lines, to be below that in the comparative period as prospective customers pre-sales trials and testing have extended into the third quarter.  In addition, a higher services element, which will be spread across the life of such contracts, in the H1 2014 order intake will result in lower immediate revenue recognition and higher deferred revenues.

The Company expects revenue in the second half, driven by SmartWall sales, to be greater than the first half.

At 30 June 2014, the Group had net cash of $5.0 million (2013: $2.8 million net debt) with debt of $0.4 million (2013: $8.1 million). 

Ashley Stephenson, CEO commented:

"The successful launch and first SmartWall sales in June represent important achievements for the Company. In addition, the growing pipeline of new SmartWall opportunities means Corero is well positioned to exploit the Company's stated strategy of expanding its addressable market to deliver significant revenue growth.

"The market opportunity for DDoS and cyber threat protection remains strong. Engagements with prospective customers have confirmed that SmartWall is a market leading solution. Our focus for the second half of 2014 is SmartWall sales execution to deliver on our growth plans.  The Board remains confident of the outlook for H2 2014 and beyond."

 Enquiries:

Corero Network Security plc
Andrew Miller, CFO and Chief Operating Officer		Tel: [phone]
FinnCap
Stuart Andrews/Henrik Persson (corporate finance)		Tel: [phone]
Simon Johnson/Stephen Norcross (corporate broking)
Redleaf Polhill		Tel: [phone]
Rebecca Sanders-Hewett/Dwight Burden/David Ison	[e-mail]

About Corero Network Security

Corero Network Security, an organization's First Line of Defense® against DDoS (Distributed Denial of Service) attacks and cyber threats, is a pioneer in global network security. Corero products and services provide online enterprises, service providers, hosting providers, and Managed Security Service Providers with an additional layer of security capable of inspecting Internet traffic and enforcing real-time access and monitoring policies designed to match the needs of the protected business. Corero technology enhances any defense-in-depth security architecture with a scalable, flexible and responsive defence against DDoS attacks and cyber threats before they reach the targeted IT infrastructure allowing online services to perform as intended. For more information, visit www.corero.com.  

 

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