I asked Andrew Miller, in effect the ‘all-in-one’ top team at 'born-again’ network security and education software firm Corero Network Security, whether it wasn’t time to ‘stop digging’? The FY numbers were as every bit as bad as presaged in January’s profit warning (see Corero ‘FloD’ still a trickle), which triggered an unexpected dash for cash the following month (see Corero’s ‘FloD’ may be dammed).
I say ‘unexpected’ because when I met Miller (no relation) back in September, he felt sure that (a) there would be no need for further external funding (oops!); and (b) the core Network Security division would reach EBITDA break-even once revenues had reached some $20m (note that CNS reports in USD, albeit only about a quarter of its group revenues derive from across the pond). In fact, Network Security revenues were broadly flat in 2012 at $11.4m with operating losses of $7.4m, almost treble the size in 2011.
Meanwhile Business Systems, Corero’s sidelined UK education sector software division, continues to run sweetly (just as well), with revenues 30% higher at $9.2m and operating profits 25% higher at $2.75m. Net net, CNS’ group revenues for the year to 31st Dec. 2012 grew by 14% to $20.6m, while net losses widened to $5.9m (2011: -$2.0m).
Miller and heavily invested chairman Jens Montana (he of Datatec fame) remain with shovels in hand, hoping that 2013 will see the hole start to get filled in. The numbers might suggest otherwise.