With US-based security solutions business Top Layer Networks – acquired in March 2011 – now bedded into cyber security group Corero Network Security, chairman Jens Montanana expects to spend 2012 ramping up group sales. After raising £4.56m through a placing this month, the group looks well placed to do that, too, and – even though profitability isn't expected until 2013 – the shares trade well below finnCap's 80p share price target.
Top Layer has been rebranded and that has paved the way for a number of US-based contracts – management signed the City of Baltimore and also extended deals with existing clients, such as an agency with the US Department of Defense. Indeed, 78 new clients were secured during the year, with an average order value of £36,000, and sales order intake reached £7.5m. The group's operating profit margin increased by two percentage points in the year as well, to 36 per cent. "We have large competitors like Cisco," points out Mr Montanana. "But our product is more specific and for particularly high transaction websites."
Broker finnCap expects an adjusted loss per share of 0.8p for 2012, but a pre-tax profit is forecast for 2013 of £0.4m, giving adjusted EPS of 0.4p.
CORERO NETWORK SECURITY (CNS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 53p | MARKET VALUE: | £25.3m | |
| TOUCH: | 50-55p | 12-MONTH HIGH: | 54p | LOW: 31p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 24p* | NET CASH: | £0.58m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 5.24 | -1.49 | -3.33 | nil |
| 2008 | 5.25 | -0.66 | -1.27 | nil |
| 2009 | 2.70 | -0.33 | -21.5 | nil |
| 2010 | 3.02 | -0.09 | -0.68 | nil |
| 2011 | 11.3 | -1.43 | -2.75 | nil |
| % change | +274 | – | – | – |
*Includes intangible assets of £15.2m, or 32p a share | ||||
