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Corero Network Security keeps operating as essential service during coronavirus crisis

Snapshot

  • Specialises in cybersecurity software
  • Growing customer base
  • Smartwall revenues growing strongly with hosting providers
  • Deemed essential service during coronavirus pandemic
Corero Network Security PLC - Corero Network Security targets sales acceleration

Quick facts: Corero Network Security PLC

Price: 4.7 GBX

AIM:CNS
Market: AIM
Market Cap: £23.26 m
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What it does

Corero Network Security PLC (LON:CNS) is a specialist cybersecurity provider. Its SmartWall software specialises in protecting a network against the threat posed by distributed denial of service (DDoS) attacks - where traffic flow on the network grinds to a halt as a result of an overwhelming flood of input/output requests.

How it is doing

The firm is deemed as an essential service during the pandemic, therefore it continues operating.

Around two-thirds of the orders received in 2019 were from telecommunication service and cloud providers, markets that are anticipated to benefit from the shift to work-from-home as a result of the coronavirus pandemic.

The company ended 2019 with a strong balance sheet, with net cash of US$5.4mln, up from US$4.4mln a year earlier.

Group revenue was US$9.7mln in the year to 31 December, virtually unchanged from US$10.0mln the year before. The percentage of revenue that is recurring improved to 60.7% from 51.1%.

Loss before tax widened to US$6.6mln from US$5.2mln the previous year.

Order intake rose 18% to US$13.0mln from US$11.1mln in 2018, with 18 new customers added during the year, 12 of which were added in the second half of the year.

Inflexion points

  • Shift to remote working expected to improve trading

  • In mid-December, the company said it secured US$1.8mln in contracts with new and existing customers to supply its Smartwall software

  • In November, Corero announced a placing and share subscription to raise up to £3.25mln, before expenses, to be used mainly for the development of its SmartWall product. The company says this comprises a conditional £950,000 ordinary share placing at a price of 3.5p each, and £2.3mln more at the same price by two directors, chairman Jens Montanana and non-executive Richard Last, and existing major shareholder Juniper Networks Inc.

What the boss says: Ashley Stephenson, chief executive

"Corero made significant progress in 2019 in both enhancing our operational platform alongside generating strong sales momentum. This included securing higher levels of recurring revenues, which is central in establishing a more robust business model with more consistent revenue visibility."

"Whilst the current macroeconomic climate is impacted as a result of COVID-19, we remain confident in the long term resilience of our business, the importance of our SmartWall solutions across our key telecommunication and cloud provider markets, and our ability to support our global customer base during what is a challenging period for everyone."

 

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Watch

Capital Network's Ed Stacey on Corero Network Security

Ed Stacey, analyst at Capital Network, talks through Corero Network Security PLC's (LON:CNS) progress to date as well as outlook and valuation.

on 09/25/2017

2 min read