Two AIM Quoted Software & Computer Services Stocks In Focus: Crossword Cybersecurity PLC and Corero Network Security Plc

Two AIM Quoted Software & Computer Services Stocks In Focus: Crossword Cybersecurity PLC and Corero Network Security Plc

Crossword Cybersecurity PLC

Crossword Cybersecurity Plc (LON: CCS) is the United Kingdom-based innovative technology commercialisation organisation. The Company centres itself around digital security innovation business. CLUE, a company offering, is its digital security research database. CLUE has coverage of 500 plus digital security projects on research from more than 50 United Kingdom and European colleges.

Another offering from the company, Rizikon, is a digital security analysis tool which gauges risk, empowering the client to quantify their company's digital vulnerability and gives them overall feedback in terms of rating based on risk.

Rizikon tracks the probabilities of the success rate of cyber assault on client's network and systems, utilising its algorithm known as Dynamic Attack Path Analysis (DAPA). Nixer, another product offering from the company, is a denial of service (DoS) platform, which provides an additional web layer of online services.

CCS-Recently developed Nixer CyberML

The company launched a new range of machine-learning based security and anti-fraud software product, Nixer CyberML, which can help companies with a lucid and quick way to build these features into applications. The tool is capable of advanced security and cybercrime challenges, such as identifying and dispensing with compromised accounts, and denial of service attacks. This tool facilitates adding of machine learning-based detection to online banking and e-commerce applications, that can identify the good and the bad user behaviour. The deployment of this technology is quick and reliable, as it uses the existing architecture and code.

CCS-Trading update and Financing

The company’s trading for the fiscal year 2019 remains in line with expectations. As the company adopted IFRS15 with respect to revenue recognition from the SaaS (Software as a Service) contracts of the company, the revenue for fiscal 2019 is expected to be lower than expectations. However, this is just a temporary phase; the company shall see a corresponding increase in revenue in future. Though there wasn’t any significant effect on the cash flow.

Crossword is looking forward to loan agreements of £1 million to take care of the company’s mid and near-term cash requirements; however, this is subject to approval from shareholders. These funds shall be utilised for general working capital purposes. The tenure of the loan will be three years with a fixed rate of 12 per cent interest per annum.

CCS-Stock price performance

Daily Chart as on 27-November-19, before the market closed (Source: Thomson Reuters)

On 26th November 2019, while writing at 11:35 AM GMT, CCS shares were clocking a current market price of GBX 460.00 per share; which was less by 4.16 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £22.76 million at the time of writing.

On 23rd April 2019, the shares of CCS had touched a new peak of GBX 568.00 and reached the lowest price level of GBX 225.00 on 19th December 2018 in the last 52 weeks. The company’s shares were trading at 19.01 per cent lower from the 52-week high price mark and 104.44 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The company’s 5-day stock's daily average traded volume was 1,520.20; 30 days daily average traded volume- 1,102.10- and 90-days daily average traded volume – 2,049.07.

The shares of the company have delivered a negative return of 5.88 per cent in the last quarter. The company’s stock surged by 95.92 per cent from the start of the year to till date. The company’s stock has given investors 3.23 per cent of a positive return in the last one month. 

 

Corero Network Security Plc

Based in Uxbridge (United Kingdom), Corero Network Security Plc (LON: CNS) is a software and computer services company. It is into the business of providing solutions for Distributed Denial of Service (DDoS) security attacks and other network solutions to facilitate the internet.

The various solutions and products of the company such as Network security solutions and the DDoS play a vital role in upgrading the existing defence systems and risk mitigation systems as well as making internet technology workable for all types of computer systems. The products or solutions of the company are combined with the firewall as a primary safety protocol, as it acts as the first line of defence against any attack.

Smartwall Threat defence system, a product of Corero Network Security, provides comprehensive security, by automatically annulling any potential threats, enabling a good user volume throughput seamlessly, at the same time allowing the applications, services, and systems to synchronise and stay connected to the network, in progression, even at the time of attack on the system. This defence system comes in various variants such as Smartwall NTD 1100, Smartwall NTD 280 and Smartwall NTD 120. This system also has a virtual variant known as SmartwallvNTD. These variants of the Smartwall Threat defence system can be delivered-as-a-service through an online platform/portal owned by the company known as the Smartwall Service Portal.

SecureWatch Analytics, a web-based analytics tool, provided by the company, can create simple and robust dashboards to gather information and create and represent useful insights and data related to DDoS attacks.

CNS-Recent developments

The company managed to secure orders worth over $1 million. The company got orders from new customers facilitated by the Juniper resale partnership as well as two separate 100Gbps orders, for SmartWall DDoS security products.

CNS-Trading Update

The company announced a trading update for the six-month period ended 30th June 2019 on 16th August 2019 with a viewpoint of financial performance for FY19.

The company’s revenue was impacted as the expected pipeline orders of Juniper were not converted and hence the revenue slowed down, but the company is still hopeful and looks forward to robust growth in the pipeline and the volume.

The management of the company is expecting the group’s revenue to be around 20 per cent more in the fiscal year 2019 as compared to the fiscal year 2018.

CNS-Business Performance for H1 FY19

(Source: London Stock Exchange)

The company declared the half-yearly results for the six-month period ended 30th June 2019 on 25th September 2019. The company’s revenue amounted to US$4.2 million in the first half of 2019, a plunge of 16 per cent YoY (Year on Year), in contrast to the company’s revenue of US$5 million in the first half of 2018.

The revenue streams were driven by inflows from the SmartWall Threat Defense System product variants, and DDoS mitigation solution. The recurring revenues of the company increased to 66.9 per cent in the first half of 2019 as against 47.7 per cent in the first half of 2018.

The company’s EBITDA (Earnings before Interest Taxes Depreciation and Amortization) loss stood at US $2 million in the first half of 2019; the loss further exacerbated in contrast to the EBITDA loss of US $1.4 million in the first half of 2018.

This performance has translated into the results as the loss before taxation (LBT) was reported at an increase of 30 per cent YoY (Year on Year) from US$3 million in the first half of 2018 to US$3.9 million in the first half of 2019. The company’s loss per share stood at 1 cent. Net Cash of the company was recorded at US$3.6 million (as on 30th June 2019).

Moreover, the company has not proposed any dividend (interim) during the period, but the company is hopeful of a positive performance in the fiscal year 2019.

 

CNS-Stock price performance

Daily Chart as on 27-November-19, before the market closed (Source: Thomson Reuters)

On 27th November 2019, while writing at 01:28 PM GMT, CNS shares were clocking a current market price of GBX 3.30 per share; which was less by 4.34 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £13.90 million at the time of writing.

On 19th December 2018, the shares of CNS had touched a new peak of GBX 12.98 and reached the lowest price level of GBX 2.35 on 23rd September 2019 in the last 52 weeks. The company’s shares were trading at 74.57 per cent lower from the 52-week high price mark and 40.42 per cent higher the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 17,031 at the time of writing before the market close. The company’s 5-day stock's daily average traded volume was 142,346.40; 30 days daily average traded volume- 93,995.63- and 90-days daily average traded volume – 364,481.56.

The shares of the company have delivered a positive return of 11.29 per cent in the last quarter. The company’s stock plunged by 72.40 per cent from the start of the year to till date. The company’s stock has given investors 73.15 per cent of a negative return in the last year. 

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