17th Sep 2013 12:45
LONDON (Alliance News) - Corero Network Security PLC Tuesday reported lower revenues and widened losses in the first half of the year.
The US-based network security company said that in the second half of the year it completed the sale of Corero Business Systems Limited, the sector of the company that developed finance and management information software for school, further education and commercial sectors, for a net consideration of USD16.5 million, of which is said it expects to book a profit on the sale of roughly USD15.0 million at year's end.
"The sale of the CBS business has resulted in the company becoming exclusively focused in the network security market and has provided the company with the cash resources to fund the organic development of the network security business," said Chief Executive Officer, Ashley Stephenson, in a statement.
Corero Network Security reported revenues of USD9.5 million in the six months to June 30, compared with USD10.8 million a year earlier, due to a drop in first-half revenues from its network security division.
The group said the division won 28 new customers in the first half of the year, including significant orders from companies in the US, Asia and Brazil.
Corero also said that it made solid progress with the development of its "next generation" product during the period. Stephenson told Alliance News that he anticipates the new product will launch in the first quarter of next year.
The product is intended to add support for deployment in cloud infrastructure, virtual environments, and larger scale networks enabling access to new global markets. The company invested USD6.5 million into the development of its new product this year, and intends to invest a further USD6.5 million over the next year, which the sale of Corero Business Systems will help to fund. It intends to increase Corero's addressable market, Stephenson said, particularly for companies that don't have the infrastructure to support Corero's existing service.
The company recently appointed David Ahee as senior vice president of Global Sales, and Stephenson said that reshaping the sales team is an area of investment for Corero, particularly in Latin America and Asia. The company is looking to increase its headcount to bolster sales, and anticipates adding extra sales staff early next year.
The group said its pretax loss widened to USD3.0 million in the first half of the year, compared with USD2.8 million a year earlier. It reported a net loss of USD3.6 million, compared USD2.7 million in the prior year.
Corero Network Security shares were down 2.7% or 0.38 pence Tuesday morning, trading at 13.75 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Additional reporting by Hana Stewart-Smith; [email protected]; @hanassallnews
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