TIDMCNS
RNS Number : 8270V
Corero Network Security PLC
11 April 2019
11 April 2019
Corero Network Security plc
("Corero", "Company" or the "Group")
Full year results
Corero Network Security plc (AIM:CNS), the AIM listed network
security company, announces its audited results for the year ended
31 December 2018.
Financial Highlights:
-- Group revenue of $10.0 million (2017: $8.5 million) of which 51.1% is recurring
o SmartWall revenue up 23.1%
o SmartWall recurring revenue(1) up 43.2%
-- Significantly reduced EBITDA(2) loss of $2.1 million (2017: loss $5.0 million(3) )
-- Adjusted operating costs(4) 13.3% below 2017
-- Loss before tax of $5.2 million (2017: loss $8.5 million(3) )
-- Loss per share 1.4 cents (2017: loss per share 3.0 cents(3) )
-- Successful equity fund raise in April 2018 of $5.3 million (after costs)
-- $2.0 million investment from Juniper Networks (NYSE: JNPR) secured in October 2018
-- Strong balance sheet with net cash at 31 December 2018 of $4.4 million (2017: $1.4 million)
Operating Highlights:
-- Signed global resale partnership with Juniper Networks (NYSE: JNPR)
-- Increase in average new customer order intake value:
o Perpetual license sales orders $275,000 (2017: $250,000)
o As-a-service contract value $55,000 per annum (2017: $40,000)
-- Follow-on orders from existing customers up 57% to $4.4 million (2017: $2.8 million)
-- Continued high levels of customer satisfaction
o Services renewal rate remained strong at 98.5% (2017: 97.5%)
Outlook
-- Entered 2019 with a growing new business pipeline from both new and existing customers
-- New Juniper resale partnership now set to deliver incremental
revenue growth, with first revenue generating order secured in
March 2019
-- DDoS mitigation market fundamentals remain strong with market
analysts forecasting double digit growth
-- The Board continues to believe the business is well-placed for further growth
Ashley Stephenson, CEO of Corero, commented:
"2018 was a year of continued strategic progress for Corero,
culminating in the signing of a landmark resale partnership with
Juniper Networks, a US-based industry leader in automated, scalable
and secure networks. Not only does this agreement provide an
additional route to market for our products but it also serves as a
significant endorsement of our SmartWall technology. Securing the
first Juniper resale customer win in March 2019 was a significant
milestone in the development of the Juniper go-to-market channel
for Corero.
"Corero continues to be well positioned to deliver on its goal
of becoming the leading player in the real-time DDoS mitigation
market, with over 100 customers and a growing number of
go-to-market partners.
"We remain focused on delivering strong revenue growth and
committed to achieving our stated goal of being EBITDA positive and
cash generative by the end of the year."
Enquiries:
Corero Network Security plc
Andrew Miller, CFO Tel: 01895 876 382
Cenkos Securities plc Tel: 020 7397 8900
Mark Connelly - NOMAD
Michael Johnson - Sales
Vigo Communications Tel: 020 7390 0230
Jeremy Garcia / Antonia Pollock / Charlie Neish
corero@vigocomms.com
About Corero Network Security
Corero Network Security is a leader in real-time,
high-performance DDoS defense solutions. Service providers, hosting
providers and digital enterprises rely on Corero's award winning
technology to eliminate the DDoS threat to their environment
through automatic attack detection and mitigation, coupled with
complete network visibility, analytics and reporting. This industry
leading technology provides cost effective, scalable protection
capabilities against DDoS attacks in the most complex environments
while enabling a more cost effective economic model than previously
available. For more information, visit www.corero.com
Operational review
2018 represents another period of strategic progress for Corero.
Revenue for the year was $10.0 million (2017: $8.5 million),
comprising almost entirely of sales from SmartWall, Corero's market
leading DDoS mitigation solution, which grew by 23.1% in 2018.
Recurring revenue, comprising security maintenance and support
services and DDoS protection as-a-service revenue, increased to
51.1% of total revenue versus 47.1% in the prior year.
Corero closely managed costs in 2018, with adjusted operating
expenses(4) of $9.9 million, 13.3% below the prior year (2017:
$11.4 million(3) ). In addition, the EBITDA(2) loss for the year
reduced to $2.1 million (2017: loss $5.0 million(3) ).
Revenue growth and progress towards EBITDA break-even was
impacted by the longer than anticipated time required to secure
contracts and develop revenues from new go-to-market partners in
the year. However, we expect this to ramp-up in 2019.
The loss for the year reflects the continuing investment in
Corero's technology and sales and marketing activities. Management
is focused on delivering revenue growth, adding new customers, and
targeting being EBITDA positive and cash generative by the end of
2019, by focusing on:
-- Executing on a strong and growing pipeline including
opportunities arising from the recently announced Juniper resale
partnership; and
-- Leveraging the growing demand for Corero 100Gbps SmartWall
technology from the adoption of faster and more economic 100Gbps
links in the Company's target markets.
Corero continued to make good operational progress during 2018,
delivering against the 2018 strategic objectives which
included:
Expanding routes to market: Signed global resale partnership
with Juniper Networks in September 2018; partnership enabled with
product SKUs, sales and support training. Both Corero and Juniper
are now actively engaged with a number of prospects and trials with
a strong pipeline of Juniper customer resale opportunities
developing.
Growing customer base: Progress made in the year, with new
customer acquisition to be accelerated with ongoing demand for
Corero's SmartWall solution (over 100 SmartWall customers at year
end); over $1.5 million order intake for SmartWall 100Gbps product
in 2018 (2017: $0.4 million from initial orders following product
release in December 2017); Juniper global resale partnership is
expected to increase customer numbers in 2019; sales order intake
from Digital Enterprise customers grew by 53%.
Maintaining competitive advantage in real-time DDoS mitigation:
Delivered two new major SmartWall software releases to customers;
developed the SmartWall Threat Defense Director ("TDD") product, a
market leading DDoS mitigation software solution for large Tbps
scale networks, for the Juniper global resale partnership; released
fully integrated 100Gbps DDoS Appliance - the SmartWall NTD1100, a
market leading solution for migration to 100Gpbs connectivity.
Financial Summary
The Group reported revenues of $10.0 million (2017: $8.5
million).
Total operating expenses were $12.7 million (2017: $14.9
million(3) ).
-- Operating expenses net of capitalised R&D costs and
before depreciation and amortisation of intangible assets were $9.4
million (2017: $12.0 million(3) ). Capitalised R&D costs were
$1.7 million (2017: $2.2 million).
-- Operating expenses include an unrealised exchange gain of
$0.4 million (2017: loss $0.6 million) arising from an intercompany
loan.
-- Depreciation and amortisation of intangible assets was $3.3 million (2017: $3.0 million).
Losses before taxation were $5.2 million (2017: loss $8.5
million(3) ) including amortisation of capitalised R&D of $2.9
million (2017: $2.4 million). The reported loss per share fell to
1.4 cents (2017: loss per share 3.0 cents(3) ).
Corero had net cash of $4.4 million at 31 December 2018 (2017:
$1.4 million), comprising:
-- Cash at bank of $8.0 million as at 31 December 2018 (2017:
$1.4 million), having raised $5.3 million (after costs) in April
2018 from an equity placing and subscription, $3.9 million (net of
costs) from a bank term loan concluded in April 2018 and drawn down
in May 2018 (the "Debt Facility"), and $2.0 million from an equity
subscription by Juniper Networks in October 2018; and
-- Debt of $3.6 million (2017: nil) comprising the Debt
Facility. The Debt Facility replaced an existing accounts
receivable financing facility of $1.5 million.
The net cash used in operating activities in the year ended 31
December 2018 was $1.8 million (2017: net cash used $6.0 million)
reflecting the loss for the year and increase in working capital
investment in the period of $0.3 million (2017: increase in working
capital investment $0.7 million).
Market Dynamics
Technology continues to promise significant enhancements to
business models in terms of both driving competitiveness and
revenue growth through the deployment of digital strategies and
technology platforms. However, as reported in the World Economic
Forum Global Risks Report for 2019, technology also continues to
play a profound role in shaping the global risks landscape, with
cyber attacks remaining one of the top 5 global risks in terms of
likelihood.
Along with email spam, phishing, and malware, DDoS attacks
remain a persistent blight on the Internet. Technically
sophisticated attackers using automated methods for launching
attacks have escalated an occasional but often severe nuisance into
a widespread, ever-present and constantly worsening threat.
Corero's Full Year 2018 DDoS Trends Report shows the average number
of attacks per customer was up 16% over 2017.
Financially motivated criminal organisations and nation state
actors bent on cyber warfare have combined forces with malicious
hackers to pool knowledge and experience to launch increasingly
complex, multi-vector attacks that are more difficult to detect and
mitigate. The vast majority of DDoS attacks are still either
volumetric in nature - consuming a high percentage of network
bandwidth - or focused on exhausting protocol-processing resources
in the host systems under attack. Both types are highly effective
in knocking out Internet applications and services, for minutes to
sometimes hours and with negative consequences for service
providers, businesses and consumers.
Attacks are often launched utilising large-scale botnets that
attackers create by hijacking poorly secured endpoints, including
servers, PCs, laptops and, in recent years, consumer IoT devices
such as webcams. The majority (according to Verizon, over 75%)
still leverage amplification techniques that jack up attack
intensity by exploiting vulnerabilities in Internet services and
host systems to increase the flood of traffic directed at
targets.
The vast complex of public networks spanning the globe is
constantly growing and evolving, reaching into every corner of
society. New users, endpoints and networks come online every hour
of every day, presenting bad actors with a constantly expanding
surface with new targets potentially vulnerable to attacks or
exploitable for launching them.
Internet evolution is shifting the DDoS battlefield in two
directions: out towards the rapidly growing IoT edge and up into
the hyperscale datacentres supporting the ever-expanding cloud.
Rapid IoT adoption is driving a proliferation of intelligent
devices that will ultimately exceed the number of user endpoints.
Machine-to-machine connections from the edge will power a wide
range of IoT applications, healthcare, environmental sensing and
"smart" infrastructure - cities, buildings, homes and vehicles.
Cybercriminals have already hijacked consumer IoT devices to create
large-scale botnets and emerging mission-critical IoT networks will
become targets for potentially catastrophic DDoS attacks.
Cloud-based services supporting mobile apps, streaming video,
e-commerce, SaaS and enterprise IT are growing at an astounding
rate, deployed in massive hyperscale data centres consisting of
thousands of servers, which are both targets for attack and
potential launch platforms. Content delivery networks that are
instrumental in scaling cloud service delivery, are also targets
for crippling attacks that can disrupt services for millions of
users.
Bandwidth at the Internet edge continues to scale up. Gigabit
consumer broadband is here, now. Multi-gigabit wireless over 5G
networks is just over the horizon. More bandwidth at the edge is
driving more capacity in the backbone. Service provider Internet
connections are moving from 10Gbps to 100Gbps. A faster edge
enables higher intensity attacks, and fewer endpoints are needed to
launch crippling volumetric attacks.
DDoS defence is still a never-ending battle. Attackers discover
and exploit vulnerable hosts or services to launch attacks.
Defenders monitor network activity to compile a catalogue of attack
profiles that are then used to generate rules to detect and
identify attacks to take the necessary mitigation actions.
Opportunities for Corero
Adoption of faster 100Gbps links
As transit providers start pushing tenants towards using
fractional committed data rates on 100Gbps connections for cost and
efficiency, versus two or more individual 10Gbps connections, we
expect increased adoption of 100Gbps links. The challenge with
faster 100Gbps links is that tenants can then be hit by up to
100Gbps of attack traffic, even if they are only subscribing to
20Gbps of regular capacity.
We anticipate demand for Corero's SmartWall 100G technology to
accelerate as a result of this and increasing end-user
service-level expectations resulting in the requirement for Service
Providers, Cloud Providers and Enterprises to deploy DDoS
mitigation technology upgrades. Corero's 100Gbps line-rate
appliance ensures each 100Gbps connection can be automatically
protected from DDoS, without impacting legitimate traffic.
5G will increase DDoS attack risk
Telecoms providers are in a race to rollout 5G services that
will empower smart devices, IoT. The new telecommunications
infrastructure required to enable 5G will bring a huge leap in the
available bandwidth. This will enable end-users (both machine and
human) to experience much faster access and downloads, and share
more data across more devices.
Along with the benefits and opportunities come new cybersecurity
risks. For example, as more powerful smart devices come online, the
networks hosting these devices will have an increased attack
surface, which makes them bigger targets for DDoS attacks. It also
increases the opportunity for those devices to be harnessed for the
purposes of launching damaging DDoS attacks against other
targets.
5G will power more virtual reality, artificial intelligence,
remote surgery and automated machinery, all of which will rely on
highly available and low latency connectivity. Downtime or service
disruption for networks that support these critical applications
will become increasingly disastrous (or, at the very least, much
less tolerated).
Any organisation which relies on the Internet for its business,
needs to be prepared for the increased cyber risks that 5G brings.
In particular, Internet Service Providers now face a significant
challenge, securing their increasingly complex and exponentially
faster networks in an era where DDoS attacks have grown in
frequency and sophistication. It will be critical that they prevent
DDoS traffic from disrupting their own network-based service
offerings, as well as those of their customers.
Super-scale DDoS protection
Carriers and other Tier-1 Service Providers have traditionally
adopted a bifurcated approach to DDoS protection, for reasons of
cost and the practicalities of deploying the available protection
solutions. This two-tier service results in only the smaller DDoS
attacks being filtered out, with larger attacks being addressed by
blocking all traffic headed for the target, taking them offline for
the duration. This may have been more accepted in the past but, as
organisations increasingly rely on their internet presence being
available 24/7, this presents an increasing challenge for the
providers.
Recent advances in the inherent traffic filtering capabilities
of network routers, from vendors such as Juniper Networks, is
enabling a new generation of protection. Security solutions can now
leverage next generation router filtering to deliver super-scale
protection directly at the perimeter of a network.
We believe that Corero is the first DDoS vendor to effectively
leverage real-time infrastructure-based traffic-filtering, which is
enabling protection to be extended to an unprecedented
tens-of-terabits scale. Combined with Corero's highly automated
approach, providers can deliver this super-scale protection at a
price-point that was not previously possible.
Strategy
Corero's focus is to scale its revenue by focusing on the
following priorities:
1. Scaling the business towards profitability
-- Three-pronged go-to-market focus:
o Direct sales: Corero sales team focused on the SmartWall
target market to leverage success to date
o Indirect sales: channel partner proposition
o Partner sales: close engagement with go-to-market partners
such as Juniper and GTT Communications and development of
additional relationships
-- Channel leverage: Utilise Juniper channel partners given
close alignment between Corero and Juniper's customer focus
(service providers, cloud providers and digital enterprises)
2. Investment in sales and marketing to drive growth
-- Sales investment to support growth plans
-- Marketing spend focused on new customer sales lead generation
3. Maintaining competitive advantage
-- Incremental product enhancements with stable R&D investment
o New DDoS attack defences
o New machine learning and artificial intelligence
capabilities
Outlook
Corero enters 2019 following a year of solid growth in revenue
and order intake and with a significant resale partnership
agreement in place with Juniper Networks. The Board is confident
about Corero's prospects in the short to medium term, with the DDoS
mitigation market fundamentals remaining strong and market analysts
forecasting double digit growth. Corero remains well-placed to
capitalise on the market opportunities and generate future
growth.
(1) Recurring revenue comprises maintenance, support services
and SaaS recognised revenue
(2) EBITDA loss is defined as loss before depreciation excluding
DDoS protection as-a-service assets depreciation which is charged
to cost of sales, amortisation, financing, tax and unrealised
foreign exchange differences on an intercompany loan
(3) Restated as a result of a change in accounting policy
related to the implementation of IFRS 15
(4) Adjusted operating costs is defined as costs before
depreciation excluding DDoS protection as-a-service assets
depreciation which is charged to cost of sales, amortisation,
financing, tax and unrealised foreign exchange differences on an
intercompany loan
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2018
Total
Total 2017
2018 Restated
$'000 $'000
Revenue 9,951 8,531
-------- ---------
Cost of sales (2,188) (2,126)
-------- ---------
Gross profit 7,763 6,405
-------- ---------
Operating expenses before highlighted items (9,427) (11,993)
-------- ---------
Depreciation and amortisation of intangible assets (3,300) (2,938)
-------- ---------
Operating expenses (12,727) (14,931)
-------- ---------
Operating loss (4,964) (8,526)
-------- ---------
Finance income 9 5
-------- ---------
Finance costs (268) (4)
-------- ---------
Loss before taxation (5,223) (8,525)
-------- ---------
Taxation - 116
-------- ---------
Loss for the year (5,223) (8,409)
-------- ---------
Other comprehensive expense
-------- ---------
Items that will or may be reclassified to profit and loss:
Difference on translation of UK functional currency entities (711) 805
-------- ---------
Total comprehensive expense for the year (5,934) (7,604)
-------- ---------
Total loss for the year attributable to:
-------- ---------
Equity holders of the parent (5,223) (8,409)
-------- ---------
Total (5,223) (8,409)
-------- ---------
Total comprehensive expense for the year attributable to:
-------- ---------
Equity holders of the parent (5,934) (7,604)
-------- ---------
Total (5,934) (7,604)
-------- ---------
Consolidated Statement of Financial Position
as at 31 December 2018
2017
2018 Restated
$'000 $'000
Assets
-------- ---------
Non-current assets
-------- ---------
Goodwill 8,991 8,991
-------- ---------
Acquired intangible assets 14 37
-------- ---------
Capitalised development expenditure 6,447 7,664
-------- ---------
Property, plant and equipment 611 770
-------- ---------
Trade and other receivables 227 76
-------- ---------
16,290 17,538
-------- ---------
Current assets
-------- ---------
Inventories 125 94
-------- ---------
Trade and other receivables 2,977 1,925
-------- ---------
Cash and cash equivalents 8,026 1,365
-------- ---------
11,128 3,384
-------- ---------
Liabilities
-------- ---------
Current Liabilities
-------- ---------
Trade and other payables (1,799) (1,305)
-------- ---------
Borrowings (849) -
-------- ---------
Deferred income (2,034) (1,702)
-------- ---------
(4,682) (3,007)
-------- ---------
Net current assets 6,446 377
-------- ---------
Non-current liabilities
-------- ---------
Trade and other payables (134) -
-------- ---------
Borrowings (2,757) -
-------- ---------
Deferred income (846) (287)
-------- ---------
(3,737) (287)
-------- ---------
Net assets 18,999 17,628
-------- ---------
Total equity attributable to owners of the parent
-------- ---------
Ordinary share capital 5,740 4,556
-------- ---------
Capital redemption reserve 7,051 7,051
-------- ---------
Share premium 79,338 73,239
-------- ---------
Share options reserve 344 322
-------- ---------
Translation reserve (2,029) (1,318)
-------- ---------
Retained earnings (71,445) (66,222)
-------- ---------
Total equity 18,999 17,628
-------- ---------
Consolidated Statement of Cash Flow
for the year ended 31 December 2018
2017
2018 Restated
$'000 $'000
Loss for the year (5,223) (8,409)
------- ----------
Adjustments for non-cash movements:
------- ----------
Amortisation of acquired intangible assets 23 55
------- ----------
Amortisation and impairment of capitalised development expenditure 2,918 2,408
------- ----------
Depreciation 483 548
------- ----------
Finance income (9) (5)
------- ----------
Finance expense 268 4
------- ----------
Taxation - (116)
------- ----------
Qualifying research and development expenditure tax credit - 116
------- ----------
Share-based payment charge 22 21
------- ----------
Decrease in inventories and as-a-service-assets 100 127
------- ----------
Increase in trade and other receivables (701) (592)
------- ----------
Increase/(decrease) in payables 293 (201)
------- ----------
Net cash used in operating activities (1,826) (6,044)
------- ----------
Cash flows from investing activities
------- ----------
Purchase of intangible assets - (10)
------- ----------
Capitalised development expenditure (1,701) (2,171)
------- ----------
Purchase of property, plant and equipment (459) (497)
------- ----------
Net cash used in investing activities (2,160) (2,678)
------- ----------
Cash flows from financing activities
------- ----------
Net proceeds from issue of ordinary share capital 7,283 6,995
------- ----------
Finance income 9 5
------- ----------
Finance expense (222) (4)
------- ----------
Net proceeds from borrowings 3,938 -
------- ----------
Net cash from financing activities 11,008 6,996
------- ----------
Effects of exchange rates on cash and cash equivalents (361) 151
------- ----------
Net increase/(decrease) in cash and cash equivalents 6,661 (1,575)
------- ----------
Cash and cash equivalents at 1 January 1,365 2,940
------- ----------
Cash and cash equivalents at 31 December 8,026 1,365
------- ----------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2018
Total attributable
to equity
Capital Share holders
Share redemption Share premium options Translation Retained of
capital reserve account reserve reserve earnings the parent
$'000 $'000 $'000 $'000 $'000 $'000 $'000
1 January 2017 (as
previously stated) 3,119 7,051 67,681 301 (2,123) (57,813) 18,216
-------- ----------- ------------- -------- ----------- --------- ------------------
Prior year adjustment
- IFRS 15 Revenue
from Contracts with
Customers - - - - - 164 164
-------- ----------- ------------- -------- ----------- --------- ------------------
1 January 2017 (as
restated) 3,119 7,051 67,681 301 (2,123) (57,649) 18,380
-------- ----------- ------------- -------- ----------- --------- ------------------
Loss for the year - - - - - (8,573) (8,573)
-------- ----------- ------------- -------- ----------- --------- ------------------
Other comprehensive
income - - - - 805 - 805
-------- ----------- ------------- -------- ----------- --------- ------------------
Total comprehensive
expense for the year
(as restated) - - - - 805 (8,573) (7,768)
-------- ----------- ------------- -------- ----------- --------- ------------------
Contributions by
and distributions
to owners
-------- ----------- ------------- -------- ----------- --------- ------------------
Share-based payments - - - 21 - - 21
-------- ----------- ------------- -------- ----------- --------- ------------------
Issue of share capital 1,437 - 5,558 - - - 6,995
-------- ----------- ------------- -------- ----------- --------- ------------------
Total contributions
by and distributions
to owners 1,437 - 5,558 21 - - 7,016
-------- ----------- ------------- -------- ----------- --------- ------------------
31 December 2017
and
1 January 2018 (as
restated) 4,556 7,051 73,239 322 (1,318) (66,222) 17,628
-------- ----------- ------------- -------- ----------- --------- ------------------
Loss for the year - - - - - (5,223) (5,223)
-------- ----------- ------------- -------- ----------- --------- ------------------
Other comprehensive
loss - - - - (711) - (711)
-------- ----------- ------------- -------- ----------- --------- ------------------
Total comprehensive
expense for the year - - - - (711) (5,223) (5,934)
-------- ----------- ------------- -------- ----------- --------- ------------------
Contributions by
and distributions
to owners
-------- ----------- ------------- -------- ----------- --------- ------------------
Share-based payments - - - 22 - - 22
-------- ----------- ------------- -------- ----------- --------- ------------------
Issue of share capital 1,184 - 6,099 - - - 7,283
-------- ----------- ------------- -------- ----------- --------- ------------------
Total contributions
by and distributions
to owners 1,184 - 6,099 22 - - 7,305
-------- ----------- ------------- -------- ----------- --------- ------------------
31 December 2018 5,740 7,051 79,338 344 (2,029) (71,445) 18,999
-------- ----------- ------------- -------- ----------- --------- ------------------
1. General information
These consolidated financial statements are presented in US
Dollars ("$") which represents the presentation currency of the
Group. The average $-GBP sterling ("GBP") exchange rate, used for
the conversion of the statement of comprehensive income, for the 12
months ended 31 December 2018 was 1.33 (2017: 1.29). The closing
$-GBP exchange rate, used for the conversion of the Group's assets
and liabilities, at 31 December 2018 was 1.28 (2017: 1.35).
The principal accounting policies adopted in the preparation of
the financial information in this results announcement are
consistent with those that the company has applied in its financial
statements for the year ended 31 December 2017 apart from new
standards which give rise to a change in the Group's accounting
policies comprising IFRS 9 Financial Instruments and IFRS 15
Revenue from Contracts with Customers.
The financial information set out above does not constitute the
Company's Annual Report and Accounts for the year ended 31 December
2018. The Annual Report and Accounts for 2017 have been delivered
to the Registrar of Companies and those for 2018 will be delivered
shortly. The auditor's report for the Company's 2018 Annual Report
and Accounts was unqualified but did draw attention to the material
uncertainty relating to going concern.
The Directors have prepared detailed income statement, balance
sheet and cash flow projections for the period to 31 December 2020.
The cash flow projections have been subjected to sensitivity
analysis at the revenue, cost and combined revenue and cost levels.
The cash flow projections show that the Group and Company will
maintain a positive cash balance until at least December 2020. In
addition, the projections and sensitivity analyses confirm that the
bank loan covenants will be met for a period of at least 12 months
from the date of approval of these financial statements.
On this basis, the Directors have therefore concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
However, the ability of the Company and Group to achieve the
future profit and cash flow projections cannot be predicted with
certainty. Failure of the Company and the Group to meet these
projections and deliver revenue growth may adversely impact the
achievability of the bank loan covenants which may result in the
bank loan being required to be repaid before the maturity date if
the revenue covenants are not met and cannot be renegotiated. This
would adversely impact the Company and the Group's working capital
position and would require the Company to raise additional funding,
with no guarantee such funding would be secured.
Taken together, the achievability of the projections and
availability of additional funding if required indicate a material
uncertainty that may cast significant doubt on the Group's ability
to continue as a going concern for the foreseeable future.
The financial statements do not include the adjustments that
would result if the Group and Company was unable to continue as a
going concern.
The auditor's report did not contain statements under s498(2) or
(3) of the Companies Act 2006.
Whilst the financial information included in this results
announcement has been computed in accordance with International
Financial Reporting Standards (IFRSs) this announcement does not
itself contain sufficient information to comply with IFRSs.
The Annual Report and Accounts for the year ended 31 December
2018 are available on the Company's website
www.corero.com/investors.
The information in this results announcement was approved by the
board on 10 April 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR DMGMDVGNGLZM
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