Wynyard first-half loss widens on spending, full-year sales dependent on contract timing

Wynyard Group chief executive Craig Richardson
Wynyard Group 12-month price history (NZX.com)

Wynyard Group [NZX: WYN], which makes security software, reported a wider first-half loss as it spent more on its expansion plans and said sales in the full-year are dependent on the timing of major contracts.

The net loss was $10.2 million in the six months ended June 30, from a loss of $3.1 million a year earlier, the Auckland-based company said in a statement. Sales were $9.6 million, compared to a pro-forma $10.3 million a year earlier.

Wynyard, which was spun out of Jade Software, debuted on the NZX July last year raising $65 million in capital to fund its international growth plans. The crime analytics and risk assesment software is in use by the London Metropolitan Police and the New Zealand and Australian police forces, global banks and corporations, and is making inroads into the huge US market, where its products have impressed the Department of Homeland Security.

Revenue in the full-year would be $29 million to $32 million, dependent on the timing of larger government contracts and financial services agreements, the company said. That suggests sales could miss the guidance the company gave at its annual meeting in May for full-year revenue of about $31 million.

Operating expenses rose to $16.5 million in the first-half from $7.1 million a year earlier. Its 2013 results included a three month trading period from April 1 to June 30.

Wynyard said it had $39.3 million cash on hand at the end of June, broadly in line with its expectations, having completed a capital placement of $35 million in April. Key growth targets for 2015 were to bolster its sales and marketing effort, expanding in the US justice and intelligence sectors, expand its channel partner programme and increase investment in "big data processing."

"The signals are very positive," said managing director Craig Richardson. "Execution of this growth programme only commenced in May, and already there is tangible evidence these initiatives will underpin growth aspirations and deliver a path to profitability."

Shares of Wynyard last traded at $2.23, valuing the company at $258 million, and have surged 92 percent this year. They are rated a 'hold' based on the consensus of two analysts polled by Reuters, with a median price target of $2.33.


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