Endace annual earnings beat guidance, strategy still under review
BUSINESSDESK: Endace, which commercialised cyber-security research done by Waikato University, has beaten the earnings guidance in March when British government austerity measures squeezed the Auckland company's revenue stream.
Net profit was $US1.8 million, or 10.5 US cents per share, in the 12 months ended March 31, down from $US2.2m, or 12.95 cents, a year earlier.
Pretax earnings of $US2.2m were more than twice the $US1m flagged in March, and just ahead of the $US2m forecast in October.
The pretax profit included the recovery of $US720,000 owed to Endace that the company had previously taken as a provision for bad debt.
"We are confident of our competitive technology strength in the market and remain committed to increasing our focus on growth in the enterprise data centre," chief executive Mike Riley said.
"Our sales pipeline is healthy and we remain very excited about the opportunities for Endace."
The stock rose 1.2% to 410 pence on the London stock exchange, having shed 27% since it issued its profit warning in March.
That values it at £68.3m, some £25.8m pounds less than before the warning.
That warning prompted the company to appoint Deutsche Bank to review its future options, a task that is still under way.
Chairman Ian Graham said the process isn't complete, but the company has "achieved greater clarity around our strategic options, our strengths and weaknesses and our focus on Endace as a global network monitoring company with development based in New Zealand, but with a growing US presence".
Endace's revenue grew 7.3% to $US41.2m, with wider gross margins at 73.1% from 66.5% a year earlier.
It didn't burn through as much cash as expected, holding $US5.4m in cash and equivalents as at March 31, more than the $US4m flagged in its profit warning.
The company provides high-performance traffic analysis, latency measurement, network security and application acceleration solutions that capture, inspect and report on every single data packet, according to its website.