TIDMCNS
RNS Number : 2205V
Corero Network Security PLC
13 April 2021
13 April 2021
Corero Network Security plc (AIM: CNS)
("Corero," the "Company" or the "Group")
Full year results
Corero Network Security plc (AIM: CNS), a leading provider of
real-time high-performance, automatic Distributed Denial of Service
('DDoS') cyber defense solutions, announces its audited results for
year ended 31 December 2020.
Financial Highlights:
-- Significant revenue growth underpinned by record order intake and strong H2 2020 performance:
o Revenues increased 74% to $16.9 million (2019: $9.7
million)
o Record H2 2020 revenues, up 93% at $10.6 million (H2 2019:
$5.5 million)
o Annualised Recurring Revenues(1) ('ARR') up 36% to $9.8
million as at 1 January 2021 (1 January 2020: $7.2 million)
o Revenue from DDoS Protection as-a-Service ('DDPaaS') contracts
increased to $2.9 million (2019: $1.3 million)
-- Gross margins of 77% (2019: 81%)
-- EBITDA(2) loss of $1.4 million (2019: loss of $3.2 million)
-- Adjusted EBITDA(3) loss of $0.6 million (2019: loss of $2.5 million)
-- Loss before taxation of $4.0 million (2019: loss of $6.6 million)
-- Loss per share of 0.8 cents (2019: loss per share of 1.6 cents)
-- Net cash at 31 December 2020 of $7.6 million (H1 2020: $3.3 million; 2019: $5.4 million)
Operational Highlights:
-- Global acceleration of remote working and internet usage as a
result of COVID-19 has reinforced the need for online security and
further emphasised the ongoing importance of Corero's high quality
solutions
-- Order intake increased by 61% to $20.9 million (2019: $13.0 million)
-- Addition of 42 new customers in 2020 (2019: 18 new customers)
o 17 of which were secured through Corero's strategic
partnership with Juniper (2019: 6 new Juniper customers)
-- Strong growth in DDPaaS and software subscriptions continues
to support recurring revenues and earnings visibility
-- Sustained high levels of customer satisfaction continue to
result in follow-on orders , which were $10.3 million in 2020
(2019: $6.1 million)
-- Lionel Chmilewsky, CEO and Neil Pritchard, Group Finance
Director joined the Company during 2020, with Ashley Stephenson
appointed Chief Technology Officer
-- Significant progress in delivering the Group's growth strategy:
o Continued investment in sales and marketing underpins ongoing
direct and channel sales efforts globally
o Addition of more agent, distributor and reseller
relationships, and in more geographies
o Leveraging strategic partnerships with Juniper and GTT and
adding new complementary partners
o Amplifying the Group's services offering
o Intensifying relationships with global and major accounts
o Continuing to focus on technological innovation
Outlook
-- Record order intake in H2 2020 and recurring revenue base
provides improved visibility for the Group's future earnings
-- Importance of DDoS mitigation continues to build globally,
together with traction for Corero's solutions
-- Increasing market coverage, most notably in broadening of the Group's partnerships
-- Management continues to monitor the business impact of the
global COVID-19 pandemic closely, however, remain optimistic in
Corero delivering sustained growth
Lionel Chmilewsky, Chief Executive Officer of Corero,
commented:
"2020 was a year of real progress for Corero, during which we
achieved a strong financial performance and delivered against our
strategic priorities. The 74% increase in sales that we achieved in
the year was underpinned by record order intake and increasing
traction through our key strategic partnerships. Pleasingly, we
also continue to generate increased levels of recurring revenues,
providing us with good visibility for the Group's future
earnings.
"We remain focused on driving growth through the augmentation of
our sales efforts - both direct and through partnerships - to
broaden our geographic reach and increase penetration with existing
customers and partners, as well as ensuring our solutions remain
best in class through ongoing investment in R&D.
"Corero has built a solid pipeline for 2021 and we look to the
future with confidence, with the significant strategic progress we
achieved during 2020 providing us with a renewed platform for
growth."
(1) Defined as the normalised annualised recurring revenue and
includes recurring revenues from contract values of annual support,
software subscription and from DDoS Protection-as-a-Service
contracts.
(2) Defined as Earnings before Interest, Taxation, Depreciation and Amortisation.
(3) Defined as Earnings before Interest, Taxation, Depreciation
(including DDPaaS assets' depreciation which is charged to cost of
sales) and Amortisation, before share-based payments, and less
unrealised foreign exchange differences on an intercompany
loan.
The information contained within this announcement was deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014, as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310, prior to
release of this announcement. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
Corero Network Security plc
Lionel Chmilewsky, CEO Tel: +44(0) 18 9587
Neil Pritchard, Group Finance Director 6382
C anaccord Genuity Limited Tel: +44(0) 20 7523
(Nominated Adviser and Broker) 8000
S imon Bridges / Andrew Potts
Vigo Communications Tel: +44(0) 20 7390
0230
Jeremy Garcia / Antonia Pollock
corero@vigocomms.com
About Corero Network Security
Corero Network Security plc is a global leader in real-time,
high-performance, automatic DDoS cyber defense solutions. Both
Service and Hosting providers, alongside digital enterprises across
the globe rely on Corero's award winning cybersecurity technology
to eliminate the threat of Distributed Denial of Service (DDoS) to
their digital environment through automatic attack detection and
mitigation, coupled with network visibility, analytics and
reporting. Corero's industry leading SmartWall and SecureWatch
technology provides scalable protection capabilities against
external DDoS attackers and internal DDoS botnets in the most
complex edge and subscriber environments, while enabling a more
cost-effective economic model than previously available. Corero's
key operational centers located in Marlborough, Massachusetts, USA
and Edinburgh, UK, with the Company's headquartered in Amersham,
UK. The Company is also listed on the London Stock Exchange's AIM
market under the ticker CNS. For more information, visit
www.corero.com .
CHIEF EXECUTIVE'S STRATEGIC UPDATE AND OPERATIONAL REVIEW
Introduction
Corero's performance across 2020 clearly demonstrates that the
Company's renewed strategic focus on its global sales and marketing
efforts is delivering tangible benefits. In the year ended 31
December 2020, the Company generated a 74% increase in revenue to
$16.9 million (2019: $9.7 million), which as announced in January
2020, was ahead of market expectations, with H2 2020 revenues at a
record high of $10.6 million (H2 2019: $5.5 million).
The Company's trading was underpinned by order intake reaching
an all-time high at $20.9 million for 2020 (2019: $13.0 million),
representing an increase of 61%, with $13.0 million secured in H2
2020 (H2 2019: $8.0 million), another period of record order intake
for the Company. It is important to note that revenues associated
with order intake are recognisable over the lifetime of each of the
contracts.
Significantly, Corero achieved a marked increase in Annualised
Recurring Revenues ( 'ARR') in the year to $9.8 million as at 1
January 2021, driven by growth in DDoS Protection-as-a-Service
('DDPaaS') and software subscription orders, which continues to
give management better visibility over the Company's future
earnings (ARR at 1 January 2020: $7.2 million).
This strong performance was delivered against the backdrop of
the COVID-19 pandemic, which presented both opportunities and
challenges for the Group. The health and safety of our global
workforce was - and continues to be - of paramount importance and
the transition to remote working was implemented seamlessly across
the Group with business continuity maintained throughout. Corero
continued to achieve extremely high customer satisfaction metrics
throughout the pandemic, and this could only have been delivered
through the dedication of our highly talented and hard working
employees.
The pandemic also reinforced the importance of both effective
and scalable c yber defense solutions as increased remote working
and significantly higher levels of internet usage and e-commerce
created new challenges for the sector and the number of DDoS
attacks rose globally.
This market dynamic coupled with our customer centric values and
market-leading solutions created a strong growth platform for the
Group across 2020.
Strategic Progress
The Group has a clearly defined set of near and mid-term
strategic priorities, and during 2020, Corero delivered significant
progress across all these ambitious initiatives. These priorities
are focused on expanding our market coverage and capitalising on
our industry-leading technology stack, and are to:
-- increase our international footprint;
-- leverage sales channel and business partnerships;
-- broaden our Global, major and Tier One client base;
-- augment our services portfolio;
-- amplify our demand generation programmes; and
-- continue to increase our technological innovation leadership.
Increase our international footprint
The Group's solutions are now deployed across more than 40
countries, with nine new territories added during the year. Central
to enhancing the Group's global presence are our strategic business
relationships and agents, which accelerate our sales growth. During
the year, we added six new agents across Eastern Europe, Latin
America, APAC, Europe and the Middle East. These new relationships
are important in increasing our profile across a number of high
growth and strategically important markets.
Leverage sales channel and business partnerships
The Group also continues to leverage its existing strategic
partners, such as Juniper and GTT, embedding our products into
these highly valuable sales ecosystems.
During 2020, we signed 17 new customers through our Juniper
partnership, compared to six in the previous year. We also
significantly increased the level of business generated with
Juniper compared to the previous year. This strong traction is
testament to the excellent work carried out by our sales teams in
engaging in closer new business collaboration and product support
with the Juniper team. We intend to continue to increase the level
of engagement across all our sales channels and believe this is
central to creating additional revenue growth.
Broaden our Global, major and Tier One client base
As set out during 2020, the Group sought to both secure new
mandates and expand existing mandates with Tier One and Major
customers.
During 2020, we secured a number of new mandates with global
operators either directly or via our partner network.
Augment our services portfolio
During the period, the Group further increased the level of
revenues generated from Managed and Professional Services as part
of total order intake, launching a number of initiatives to
significantly increase development and promotion of our services
offering and therefore increase our recurring revenue base.
Continue to increase our technological innovation leadership
Alongside our ongoing investment in enhancing the features and
offering of our solutions, the Group has created a number of
internal initiatives to examine product development and
enhancements to drive near-term and mid-term improvements across
our existing software portfolio. This is key to ensuring Corero
maintains its market leading position to take advantage of new
market trends.
As part of this process, Corero has created a number of
customer-facing task forces to both improve and expand customer
engagement.
DDoS market dynamics
Organisations around the world depend on the Internet now more
than ever to conduct business and deliver services. This
Internet-fi-rst world grows more complex each year due to the
demand for faster connections, 5G, Internet of Things ('IoT')
devices, and cloud services. DDoS attacks are growing in
sophistication, size, recurrency and frequency. Each year, we see a
rising number of total recorded attacks. Often such attacks are
cover for other nefarious motives and attacks.
Service Providers and Hosting Providers are increasingly
expected to assume the responsibility for upholding their
customers' internet availability. Real-time DDoS protection has
become more critical now than ever before. Unfortunately, in
parallel, DDoS-for-hire services, that make it cheap and easy to
launch attacks, have become increasingly common. Expectations for
Internet response and resilience comes down to seconds not minutes.
When the Internet goes down, organisations that rely on Internet
service go down with it.
DDoS attacks are considered one of the most serious yet most
common threats to Internet availability. Downtime and internet
disruption can damage brand reputation, customer trust and revenue.
Market reports have commented that during 2020, the average number
of attacks per customer per day increased by c.20%, as did the
chance of being attacked again within 24 hours, with the average
duration of an attack less than five minutes making them more
difficult to detect. In addition, during the COVID-19 pandemic,
Corero has seen a 400% year-on-year increase in the use of OpenVPN
attacks as businesses transitioned to working remotely.
Opportunities for Corero
2020 was clearly a watershed moment for the digital community
with heightened levels of remote working, and online commerce
highlighting the importance of cyber security innovation. Whilst it
is difficult to predict if consumer demand will be maintained, what
is clearly evident, is the need for highly robust and secure IT
infrastructure is set to continue, as we saw before the
pandemic.
Corero's solutions sit firmly at the centre of this trend with
customers across telecommunications, retail, banking, data centres,
hosting and infrastructure all putting DDoS mitigation as a key
near-term priority.
In addition, the expansion of 5G mobile broadband and Edge
computing, coupled with the ongoing global reliance on data,
business intelligence and Artificial Intelligence (AI) based
services, will undoubtably accelerate the creation of more
sophisticated cyber threats. Corero intends to continue its path of
product development alongside geographic and market coverage
expansion to further ensure its customers are best protected from
the threat of DDoS attacks.
Financial Summary
The Group generated revenues of $16.9 million in 2020 (2019:
$9.7 million), with total operating expenses before share-based
payments of $16.4 million (2019: $13.8 million) while continuing to
invest in sales and marketing expansion and R&D efforts.
-- Operating expenses net of capitalised R&D costs and
before depreciation and amortisation of intangible assets and
before share-based payments were $14.1 million (2019: $10.8
million). Capitalised R&D costs were $1.4 million (2019: $1.4
million)
-- Operating expenses include an unrealised exchange loss of
$0.3 million (2019: loss of $0.3 million) arising from an
intercompany loan
-- Depreciation and amortisation of intangible assets was $2.3 million (2019: $3.0 million)
The EBITDA loss in 2020 of $1.4m narrowed by 56% over the prior
year (2019: $3.2m loss) and Adjusted EBITDA loss reduced by 76% to
$0.6m (2019: loss of $2.5m). Losses before taxation in 2020 were
$4.0 million (2019: loss $6.6 million) including amortisation of
capitalised R&D of $1.9 million (2019: $2.6 million). Losses
after interest and taxation were $3.8m (2019: $6.6m). The reported
loss per share was therefore 0.8 cents (2019: loss per share 1.6
cents). The 2020 losses decreased, primarily due to the increased
revenues ahead of the increase in operating expenses.
The net cash generated in operating activities in the year was
$5.1 million (2019: net cash outflow of $0.6 million) reflecting
the loss for the year and improvement in working capital investment
in the period of $5.7 million (2019: decrease in working capital
investment of $2.2 million). This improvement was partly due to an
order received from a sizeable customer in the third quarter, the
proceeds of which were received towards the end of the fourth
quarter, but the associated outflows for which fell into the first
quarter of the 2021 year.
In terms of overall position, Corero had net cash of $7.6
million at 31 December 2020 (31 December 2019: $5.4 million; H1
2020 $3.3 million), comprising:
-- Cash at bank of $10.1 million as at 31 December 2020 (2019: $8.3 million)
-- Debt of $2.5 million (2019: $2.9 million) including $0.6
million of a US Paycheck Protection Program ("PPP") Loan. This PPP
loan was forgiven by the Group's US bank in January 2021.
In April 2021 we have entered into a new banking facility for up
to GBP3.0 million (circa $4.1 million), the net proceeds of which
will be used for working capital purposes and our on-going
investment programme to support our growth strategy ahead.
Outlook
The Company has begun 2021 with a solid pipeline and encouraging
levels of business activity from both new and existing customers,
particularly through our strategic partnerships. The requirement
for its products and the need for cyber security mitigation remains
high and continues to grow, and this has undoubtedly been
accelerated by the increased levels of remote working and online
commerce. However, the Company remains mindful of the risks and
challenges presented by COVID-19 including and the ongoing wider
economic impact and customer purchasing decisions.
The successful implementation of our strategic priorities is
creating a strong platform for the business. These are centred
across geographic expansion, creating sustainable sales growth and
maintaining our product excellence. The Company is confident in the
market dynamics and drivers and believes it is well placed for
future growth.
The strong sales traction over the last 12 months, combined with
the Group's attractive customer offering and recurring revenue
generation provide us with renewed optimism and vigour as we
navigate 2021 and beyond.
Lionel Chmilewsky
Chief Executive Officer
12 April 2021
Consolidated Income Statement
for the year ended 31 December 2020
Year ended 31 December Year ended 31 December
2020 2019
Continuing operations $'000 $'000
Revenue 16,877 9,714
Cost of sales (3,832) (1,842)
----------------------- -----------------------
Gross profit 13,045 7,872
Operating expenses (16,431) (13,808)
----------------------------------------------------------------- ----------------------- -----------------------
Consisting of:
Operating expenses before depreciation and amortisation (14,114) (10,767)
Depreciation and amortisation of intangible assets (2,317) (3,041)
----------------------------------------------------------------- ----------------------- -----------------------
Loss from operations (3,386) (5,936)
Share-based payments (359) (265)
----------------------- -----------------------
Operating loss (3,745) (6,201)
Finance income 16 15
Finance costs (301) (375)
----------------------- -----------------------
Loss before taxation (4,030) (6,561)
Taxation credit 246 -
----------------------- -----------------------
Loss after taxation (3,784) (6,561)
----------------------- -----------------------
Loss after taxation attributable to equity owners of the parent (3,784) (6,561)
----------------------- -----------------------
Basic and diluted loss per share
Cents Cents
Basic and diluted loss per share (0.8) (1.6)
------ ------
EBITDA(1) (1,428) (3,160)
Adjusted EBITDA - for DDPaaS depreciation(1) (1,173) (3,035)
Adjusted EBITDA - for DDPaaS depreciation and share based payments(1) (814) (2,770)
Adjusted EBITDA - for DDPaaS depreciation, share based payments and unrealised foreign
exchange
differences on intercompany loan(1) (551) (2,457)
(1) See note 2 for reconciliation.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2020
Year ended 31 December Year ended 31 December
2020 2019
$'000 $'000
-------------------------------------------------------------------- ----------------------- -----------------------
Loss for the year (3,784) (6,561)
Other comprehensive (expense)/income:
-------------------------------------------------------------------- ----------------------- -----------------------
Items reclassified subsequently to profit or loss upon
derecognition:
Foreign exchange differences 216 429
-------------------------------------------------------------------- ----------------------- -----------------------
Other comprehensive income for the period net of taxation
attributable to the equity owners
of the parent 216 429
-------------------------------------------------------------------- ----------------------- -----------------------
Total comprehensive expense for the year attributable to the equity
owners of the parent (3,568) (6,132)
-------------------------------------------------------------------- ----------------------- -----------------------
Consolidated Statement of Financial Position
as at 31 December 2020
As at 31 December As at 31 December
2020 2019
$'000 $'000
Assets
Non-current assets
Goodwill 8,991 8,991
Acquired intangible assets 9 7
Capitalised development expenditure 4,646 5,169
Property, plant and equipment - owned assets 1,099 652
Leased right of use assets 237 357
Trade and other receivables 694 307
15,676 15,483
Current assets
Inventories 98 63
Trade and other receivables 3,714 2,572
Cash and cash equivalents 10,140 8,321
----------------- -----------------
13,952 10,956
----------------- -----------------
Total assets 29,628 26,439
----------------- -----------------
Liabilities
Current Liabilities
Trade and other payables (6,461) (2,008)
Lease liabilities (86) (112)
Deferred income (3,444) (2,800)
Borrowings (2,073) (1,149)
(12,064) (6,069)
Net current assets 1,888 4,887
Non-current liabilities
Trade and other payables (402) (139)
Lease liabilities (171) (257)
Deferred income (2,705) (1,096)
Borrowings (405) (1,788)
----------------- -----------------
(3,683) (3,280)
----------------- -----------------
Net assets 13,881 17,090
----------------- -----------------
Capital and reserves attributable to the equity owners of the parent
Share capital 6,914 6,914
Share premium 82,122 82,122
Capital redemption reserve 7,051 7,051
Share options reserve 968 609
Foreign exchange translation reserve (1,384) (1,600)
Accumulated profit and loss reserve (81,790) (78,006)
----------------- -----------------
Total shareholders' equity 13,881 17,090
----------------- -----------------
Consolidated Statement of Cash Flows
for the year ended 31 December 2020
Year ended 31 December Year ended 31 December
2020 2019
Operating activities $'000 $'000
Loss before taxation for the year (4,030) (6,561)
Adjustments for movements:
Amortisation of acquired intangible assets 6 13
Amortisation of capitalised development expenditure 1,933 2,638
Depreciation - owned assets 514 450
Depreciation - leased assets 119 65
Finance income (16) (15)
Finance expense 274 364
Finance lease interest costs 27 11
Share based payments expense 359 265
Cash used in operating activities before movement in working capital (814) (2,770)
Movement in working capital:
Decrease in inventories and sales evaluation assets 45 153
(Increase)/decrease in trade and other receivables (1,187) 937
Increase in trade and other payables 6,852 1,129
---------------------- ----------------------
Net movement in working capital 5,710 2,219
Cash generated from/(used in) operating activities 4,896 (551)
Taxation received 246 -
---------------------- ----------------------
Net cash generated from/(used in) operating activities 5,142 (551)
Cash flows from investing activities
Purchase of intangible assets (8) (6)
Investment in development expenditure (1,410) (1,360)
Purchase of property, plant and equipment (1,015) (579)
Net cash used in investing activities (2,433) (1,945)
Cash flows from financing activities
Net proceeds from issue of share capital (post fees) - 3,958
Proceeds from borrowings 637 -
Finance income 16 15
Finance expense (206) (296)
Repayments of borrowings (1,187) (856)
Lease liability payments (136) (74)
---------------------- ----------------------
Net cash (used in)/generated from financing activities (876) 2,747
Increase in cash and cash equivalents 1,833 251
---------------------- ----------------------
Effects of exchange rates on cash and cash equivalents (14) 44
Cash and cash equivalents at 1 January 8,321 8,026
---------------------- ----------------------
Cash and cash equivalents at 31 December 10,140 8,321
---------------------- ----------------------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Total
Foreign Accumulated attributable
Capital Share exchange profit and to equity
Share Share redemption options translation loss owners of
capital premium reserve reserve reserve reserve the parent
$'000 $'000 $'000 $'000 $'000 $'000 $'000
1 January 2019 5,740 79,338 7,051 344 (2,029) (71,445) 18,999
Loss for the year (6,561) (6,561)
Other comprehensive expense - - - - 429 - 429
-------- -------- ----------- -------- ------------ ------------ -------------
Total comprehensive expense for the year - - - - 429 (6,561) (6,132)
Contributions by and distributions to owners
Share based payments - - - 265 - - 265
Issue of share capital 1,174 2,784 - - - - 3,958
Total contributions by and distributions to owners 1,174 2,784 - 265 - - 4,223
31 December 2019 and 1 January 2020 6,914 82,122 7,051 609 (1,600) (78,006) 17,090
Loss for the year - - - - - (3,784) (3,784)
Other comprehensive expense - - - - 216 - 216
-------- -------- ----------- -------- ------------ ------------ -------------
Total comprehensive expense for the year - - - - 216 (3,784) (3,568)
-------- -------- ----------- -------- ------------ ------------ -------------
Contributions by and distributions to owners
Share based payments - - - 359 - - 359
Total contributions by and distributions to owners - - - 359 - - 359
31 December 2020 6,914 82,122 7,051 968 (1,384) (81,790) 13,881
-------- -------- ----------- -------- ------------ ------------ -------------
1. General information
These consolidated financial statements are presented in US
Dollars ("$") 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 2020 was 1.28 (2019: 1.28). The closing
$-GBP exchange rate, used for the conversion of the Group's assets
and liabilities, at 31 December 2020 was 1.37 (2019: 1.33).
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 2020.
The financial information set out above does not constitute the
Company's Annual Report and Accounts for the year ended 31 December
2020. The Annual Report and Accounts for 2019 have been delivered
to the Registrar of Companies and those for 2020 will be delivered
shortly. The auditor's report for the Company's 2020 Annual Report
and Accounts was unqualified but did draw attention to the material
uncertainty relating to going concern.
The Directors are, based on detailed financial projections, of
the opinion that the Group and Company has adequate working capital
to continue as a going concern for the foreseeable future and, in
particular, for a period of at least 12 months from the date of
approval of this announcement. The financial projections take into
account the operational progress made by the Company over the past
year and future opportunities.
However, the ability of the Company and Group to achieve the
future profit and cash flow projections cannot be predicted with
certainty. Additionally, the impact of the on-going COVID-19 global
pandemic on the business of the Company and Group brings continued
global uncertainties.
The inability 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,
assuming that the revenue and cash consumption covenants are not
met and cannot be renegotiated. This would adversely impact the
Company and the Group's working capital position and could require
the Company to raise additional funding, with no guarantee such
funding could be secured.
These circumstances therefore indicate a material uncertainty
that may cast significant doubt on the Company and the Group's
ability to continue as a going concern for the foreseeable
future.
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 prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006 this announcement does not itself contain
sufficient information to comply with international accounting
standards.
The Annual Report and Accounts for the year ended 31 December
2020 are available on the Company's website www.corero.com
/who-we-are/investor-relations .
The information in this results announcement was approved by the
Board on 12 April 2021.
2. Key performance measures
EBITDA and Adjusted EBITDA for share based payments
Earnings before interest, tax, depreciation, and amortisation
("EBITDA") is defined as earnings from operations before interest,
tax, depreciation, and amortisation charges. The following is a
reconciliation of EBITDA and further adjustments for the periods
presented:
Year ended Year
31 December ended 31 December
2020 2019
$'000 $'000
Loss before taxation (4,030) (6,561)
Adjustments for:
Finance income (16) (15)
Finance expense 274 364
Finance lease interest costs 27 11
Depreciation - owned assets 259 325
Depreciation - lease liabilities 119 65
Amortisation of acquired intangible
assets 6 13
Amortisation of capitalised
development expenditure 1,933 2,638
------------- -------------------
EBITDA (1,428) (3,160)
Depreciation of DDoS Protection-as-a-Service
assets charged to cost of sales 255 125
------------- -------------------
Adjusted EBITDA - for DDPaaS
depreciation (1,173) (3,035)
------------- -------------------
Share based payments 359 265
------------- -------------------
Adjusted EBITDA - for DDPaaS
depreciation and share based
payments (814) (2,770)
Unrealised foreign exchange
differences on intercompany
loan 263 313
------------- -------------------
Adjusted EBITDA - for DDPaaS
depreciation, share based payments
and unrealised foreign exchange
differences on intercompany
loan (551) (2,457)
------------- -------------------
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