Cyber attacks on TalkTalk, Paysafe and other companies have stolen headlines in recent weeks. Investors in Sophos (SOPH), which listed in July, may be smirking with schadenfreude: the software giant specialises in providing end-user and network security solutions to businesses. Mounting demand for its services drove like-for-like billings up 24 per cent in the six months to 30 September, fuelling a 23 per cent rise in adjusted cash profit.
Constant-currency revenue rose by 17 per cent as the group, whose software protects more than 100m users in 150 countries, signed up new customers and sold more products and services to existing clients. Sales climbed by about a fifth or more in each of the group's three territories: the Americas; Europe, the Middle East and Africa; and Asia Pacific and Japan.
The strong first-half performance led management to hike its guidance for like-for-like billings and profit margins for this financial year. Ongoing growth should be driven by the group's latest offering, Security Heartbeat, which combines endpoint and network security to detect threats more quickly and mount faster, targeted responses. It can also automatically isolate infected devices.
Broker Peel Hunt estimates that the group is growing at three times the pace of the broader market. It expects a loss per share of 3.9¢ this financial year, swinging to EPS of 3.3¢ in the year to March 2017.
| SOPHOS GROUP (SOPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 270p | MARKET VALUE: | £1.2bn | |
| TOUCH: | 269.5-270p | 12-MONTH HIGH: | 285p | LOW: 224p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 34¢* | NET DEBT: | 149% | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014† | 215 | -17.8 | -4.9 | na |
| 2015 | 234 | -42.9 | -11.0 | 0.70 |
| % change | +9 | - | - | - |
Ex-div: 19 Nov Payment: 18 Dec £1=$1.52 *Includes intangible assets of $729m, or 162¢ a share †Sophos floated in July 2015 | ||||
