Concerns about hacks and cyber attacks fuelled constant-currency sales growth of a tenth at Sophos (SOPH) in the reported period. But exclude $22.9m (£18.4m) in deferred billings and the cyber security group's adjusted cash profit shrank by more than a quarter to $28m.
Comparable billings rose by more than 15 per cent in both of Sophos's divisions, which focus on networks and end-users respectively, and grew across all three of its global territories. That reflected strong demand for the group's Sophos Central platform and 'unified threat management' products, which drove new customer billings up a fifth, fuelled a 19 per cent rise in subscription billings and boosted the renewal rate, including upselling, to 104 per cent. But higher research spending, share-based payments and a greater proportion of deferred revenue widened statutory losses.
On the bright side, deferred revenue grew by 3 per cent to over $510m. Management also expects enhancements to Sophos Central and new products such as Intercept X and SafeGuard to underpin further growth. It anticipates mid-teens percentage growth in comparable billings and modest expansion in underlying margins in the year to March 2017. Broker Cenkos expects FY2017 adjusted cash profit of $144m, giving EPS of 10.2¢, up from $121m and 3¢ in FY2016.
| SOPHOS (SOPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 228p | MARKET VALUE: | £1bn | |
| TOUCH: | 228-229p | 12-MONTH HIGH: | 293p | LOW: 146p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 27¢* | NET DEBT: | 168% | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015† | 234 | -42.9 | -11.0 | 0.7 |
| 2016 | 257 | -28.4 | -7.6 | 1.3 |
| % change | +10 | - | - | +86 |
Ex-div: 17 Nov Payment: 16 Dec £1=$1.24 *Includes intangible assets of $744m, or 163¢ a share †Sophos listed in July 2015 | ||||
