Cyber-security group Sophos (SOPH) cheered investors with full-year billings growth of 22 per cent to $769m (£570m) – hitting the ceiling of its 20-22 per cent guided range. Evidence of escalating demand also came in the form of a 26 per cent improvement in subscription sales.
The positive market reaction may have been supported by management’s reiteration of its $1bn billings goal for FY2020. The announcement would have gone some way to alleviating concerns about a repeat of the third-quarter slowdown in billings growth, which sent Sophos’s share price plummeting in February.
So what drove this performance? Sophos Central, the cloud-based management platform, grew 112 per cent to $186m, while total customer numbers also rose by 40,000 to 300,000. Still, it wasn’t all rosy. Pre-tax losses widened due to $16.5m in negative currency translations – a consequence of sterling’s strengthening against other major currencies.
Analysts at JP Morgan forecast adjusted pre-tax profits of $9m, giving EPS of 15.8ȼ for the year to March 2019, against $13m and 13.7ȼ in FY2018.
| SOPHOS (SOPH) | ||||
| ORD PRICE: | 571p | MARKET VALUE: | £ 2.7bn | |
| TOUCH: | 571-573p | 12-MONTH HIGH: | 675p | LOW: 387p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | NA | |
| NET ASSET VALUE: | 19.6ȼ* | NET DEBT: | 204% | |
| Year to 31 March | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2014 | 379 | -91.0 | -25.9 | na |
| 2015 | 447 | -54.0 | -14.7 | na |
| 2016† | 478 | -68.4 | -16.4 | 1.8 |
| 2017 | 530 | -49.3 | -10.3 | 4.6 |
| 2018 | 641 | -52.3 | -14.4 | 4.9 |
| % change | +21 | - | - | +7 |
| Ex-div: | 20 Sep | |||
| Payment: | 12 Oct | |||
| *Includes intangible assets of $870m or 186ȼ per share † Sophos listed in July 2015£1 = $1.35 | ||||
