Corero Network Security plc

Company summary

Corero Networks Security plc, is an AIM listed company which provides modular accounting, human resources, payroll and management information software to the schools and further education sectors in the UK and internationally.

26 March 2013 | Education

Company news

Corero Network Security Releases its Full Year Results

​Corero Network Security plc, the AIM listed network security and business software provider, announces its full year audited results for the year ended 31 December 2012.

Financial highlights

•Consolidated revenue $20.6m ($18.0m in 2011)

•Consolidated EBITDA loss* $3.1m (profit $0.4m in 2011)

•Loss after taxation of $5.9 million ($2.0m in 2011).

•Loss per share  9.7 cents(5.3 cents in 2011)

•Cash of $4.9m at 31 December 2012 ($6.7 m in 2011)

•The Group's net assets at the year end were $19.3m ($17.8m in 2011).

* before depreciation, amortisation, acquisition and restructuring costs and financing

Operating highlights

•Won 66 important new customers including a leading telecommunication service provider in Asia, Books.com, a Malaysian state ministry and a leading French retail group

•251 new academy and schools customers driving strong and profitable growth

•Continued investment in software products 

Andrew Miller, Group COO of Corero, commented: "2012 was an important transition year for the Corero Network Security division.  We are confident that the progress and investments made in the business, along with the appointment of Ashley Stephenson as Chief Executive Officer to drive forward its sales-led growth strategy, have positioned the business well for the future.  We are excited about the market opportunity and the Corero Network Security division's growth prospects."

"The Corero Business Systems division has delivered strong profitable growth in 2012 which is expected to continue in 2013 and beyond, providing very good cash generation on the back of sustained revenue increases." 

Corero Network Security division review 

In September 2012, CNS launched its  "First Line of Defense" solution to leverage its industry leading Distributed Denial of Service protection and intrusion prevention technology. Sales order intake (bookings as opposed to amounts recognised as revenue) in the 12 month period ended 31 December 2012 was $10.4 million (2011: $12.0 million). Sales order intake was impacted by the repositioning of the CNS division around its new First Line of Defense solution in the second half of the year. 

In 2012, 44 new partners were recruited bringing the total number of partners at 31 December 2012 to over 80. The First Line of Defense positioning has been well received by important new customers and partners as a compelling and differentiated offering. 

Ashley Stephenson, who joined CNS in March 2012 as Executive Vice President Product Marketing and Strategy, was appointed Chief Executive Officer of the CNS division in January 2013 as a result of a leadership reconfiguration to position the business for a sales led growth strategy and to build upon the progress made in the product development, marketing and operational aspects of the business in 2012.

The UK education market dynamics and opportunity for Corero Business Systems

The schools market is the key growth market for Corero Business Systems (including academies and free schools). The academy conversion programme is a key part of the Government's education policy. As of 1 January 2013, only 12% of the 21,000 schools in England were academies. 

There is continued strong interest from Local Education Authority controlled schools to convert to academies, encouraged by The Department of Education, coupled with the emergence of academy group's including CBS customers, the School Partnership Trust (based in Leeds) and The Kemnal Academies Trust (based in Kent), each with 30 and 32 academies respectively at 31 December 2012.

Outlook

Significant progress has been made in the Corero Network Security business. The business and management team have been reorganised and the groundwork laid to drive incremental growth in new international markets. This division is well positioned to deliver growth in 2013. Corero Network Security has had an encouraging start to 2013 with material business wins generated from both new and existing customers.  New customer wins include: a US utility, a leading mobile service provider in Brazil, and an internet domain services company.  Existing customer renewals include: a leading European lottery operator, one of the largest insurers in the United States, and a leading price comparison web site.

The Corero Business Systems division performed strongly in 2012 with this growth expected to continue. The division plans to make further self-funded investments in its products and to consider adjacent market opportunities. 

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