Corero Network Security PLC (LON:CNS)

Corero Network Security PLC (LON:CNS)


Share Price
7.25 p
Change
-0.125 (-1.69 %)
Market Cap
£29.14 m
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Corero Network Security PLC

Corero Network Security is a leader in real-time, high-performance Distributed Denial of Service (“DDoS”) defence solutions. Service providers, cloud providers and digital enterprises rely on Corero’s award winning SmartWall® Network Threat Defense System (“SmartWall)” technology to eliminate the DDoS threat to their environment through automatic attack detection and mitigation, coupled...

EPIC: CNS
Market: AIM:CNS
52-week High/Low: 13.60p / 6.85p
Sector: Software & Computer Services
Market Cap: £29.14 m
Website: www.corero.com
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Big Picture – A Deep Dive Examination of Corero Network Security PLC


Corero Network Security PLC Snapshot

 

Why we do it

• Corero believes in a safe Internet protected from cyber-attacks.
• Corero strives to eliminate the threat of DDoS attacks.

How we do it

• Corero does this by combining its patents, algorithms, more than a decade of cyber-security experience and its DDoS threat analytics.

What we do

• Corero’s SmartWall product detects and mitigates attacks in seconds allowing customers to stay open for business during an attack.

Corero protects organisations’ online systems, information, data, revenues and brand reputations against the growing cyber threat of DDoS attacks with dedicated technology for real-time mitigation of DDoS attacks in seconds vs minutes, allowing good user traffic to flow uninterrupted.

When an organisation selects Corero to protect their assets in the face of DDoS attacks they strengthen their Internet facing security defences and ensure service availability. Corero customers can utilise this DDoS protection for their own business needs and service provider and cloud provider customers can monetise a DDoS protection service to their customers enabled through the Corero Service Portal.

Investor Proposition

Corero is well positioned to deliver on its goal of being the leading player in the real-time DDoS mitigation market with SmartWall solution validation from over 100 customers and a growing number of GTM partners including Juniper Networks and GTT Communications.

Corero enters 2019 following a year of solid growth in revenue and order intake and with a significant resale partnership agreement in place with Juniper Networks. The Board is confident about Corero’s prospects in the short to medium term, with the DDoS mitigation market fundamentals remaining strong and market analysts forecasting double digit growth. Corero remains well-placed to capitalise on the market opportunities and generate future growth.

Market opportunity

Technology continues to promise significant enhancements to business models in terms of both driving competitiveness and revenue growth through the deployment of digital strategies and technology platforms. However, as reported in the World Economic Forum Global Risks Report for 2019, technology also continues to play a profound role in shaping the global risks landscape, with cyber attacks remaining one of the top 5 global risks in terms of likelihood.

Along with email spam, phishing, and malware, DDoS attacks remain a persistent blight on the Internet. Technically sophisticated attackers using automated methods for launching attacks have escalated an occasional but often severe nuisance into a widespread, ever-present and constantly worsening threat. Corero’s Full Year 2018 DDoS Trends Report shows the average number of attacks per customer was up 16% over 2017.

Financially motivated criminal organisations and nation state actors bent on cyber warfare have combined forces with malicious hackers to pool knowledge and experience to launch increasingly complex, multi-vector attacks that are more difficult to detect and mitigate. The vast majority of DDoS attacks are still either volumetric in nature – consuming a high percentage of network bandwidth – or focused on exhausting protocol-processing resources in the host systems under attack. Both types are highly effective in knocking out Internet applications and services, from minutes to sometimes for hours and with negative consequences for service providers, businesses and consumers.

Attacks are often launched utilising large-scale botnets that attackers create by hijacking poorly secured endpoints, including servers, PCs, laptops and, in recent years, consumer IoT devices such as webcams. The majority (according to Verizon, over 75%) still leverage amplification techniques that jack up attack intensity by exploiting vulnerabilities in Internet services and host systems to increase the flood of traffic directed at targets.

The vast complex of public networks spanning the globe is constantly growing and evolving, reaching into every corner of society. New users, endpoints and networks come online every hour of every day, presenting bad actors with a constantly expanding surface with new targets potentially vulnerable to attacks or exploitable for launching them.

Internet evolution is shifting the DDoS battlefield in two directions: out toward the rapidly growing IoT edge and up into the hyperscale datacentres supporting the ever-expanding cloud.

Rapid IoT adoption is driving a proliferation of intelligent devices that will ultimately exceed the number of user endpoints. Machine-to-machine connections from the edge will power a wide range of IoT applications, healthcare, environmental sensing and “smart” infrastructure – cities, buildings, homes and vehicles. Cybercriminals have already hijacked consumer IoT devices to create large-scale botnets and emerging mission-critical IoT networks will become targets for potentially catastrophic DDoS attacks.

Cloud-based services supporting mobile apps, streaming video, e-commerce, SaaS and enterprise IT are growing at an astounding rate, deployed in massive hyperscale data centres consisting of thousands of servers, which are both targets for attack and potential launch platforms. Content delivery networks that are instrumental in scaling cloud service delivery, are also targets for crippling attacks that can disrupt services for millions of users.

Bandwidth at the Internet edge continues to scale up. Gigabit consumer broadband is here, now. Multi-gigabit wireless over 5G networks is just over the horizon. More bandwidth at the edge is driving more capacity in the backbone. Service provider Internet connections are moving from 10Gbps to 100Gbps. A faster edge enables higher intensity attacks, and fewer endpoints are needed to launch crippling volumetric attacks.

Corero strategy

Corero’s focus is to scale its revenue by focusing on the following priorities:

1. Scaling the business towards profitability

• Three-pronged go-to-market focus:
• Direct sales: Corero sales team focused on the SmartWall target market to leverage success to date.
• Indirect sales: channel partner proposition
• Partner sales: close engagement with go-to-market partners such as Juniper and GTT Communications and development of additional relationships
• Channel leverage: Leverage Juniper channel partners given close alignment between Corero and Juniper’s customer focus (service providers, cloud providers and digital enterprises).

2. Investment in sales and marketing to drive growth

• Sales investment to support growth plans
• Marketing spend focused on new customer sales lead generation

3. Maintaining competitive advantage

• Incremental product enhancements with stable R&D investment

• New DDoS attack defences

• New machine learning and artificial intelligence capabilities

SmartWall® Threat Defense System - click here to read more.

SmartWall® Service Portal - click here to read more.

Jens Montanana, Chairman (appointed 9 August 2010)

Jens Peter Montanana (non-executive Chairman) is the founder and CEO of Datatec Limited, established in 1986. Between 1989 and 1993 Jens served as managing director and vice-president of US Robotics (UK) Limited, a wholly owned subsidiary of US Robotics Inc., which was acquired by 3Com. In 1993, he co-founded US start up Xedia Corporation in Boston, an early pioneer of network switching and one of the market leaders in IP bandwidth management, which was subsequently sold to Lucent Corporation in 1999 for $246 million. In 1994, Jens became CEO of Datatec Limited. Datatec Limited listed on the Johannesburg Stock Exchange in 1994 and on AIM in 2006. Jens has previously served on the boards and sub-committees of various public companies. 
  

Richard Last, Non-executive Director (appointed 22 May 2008)

Richard Last (non-executive director) is a Fellow of the Institute of Chartered Accountants in England and Wales (FCA). Richard is Chairman of companies including ITE Group plc, an international trade exhibitions and conferences company quoted on the London stock exchange. Richard is Chairman of the following AIM listed companies Arcontech Group, a provider of IT solutions for the financial services sector; Gamma Communications plc, a provider of voice, data and mobile services for the business market; Tribal Group plc, a provider of software and services to the education management market. In addition, Richard is Chairman of BSC VCT2 plc and Lighthouse Group plc (Richard will be stepping down from both these boards in the near future). He is also a director of a number of private companies.


Peter George, Non-executive Director (appointed 3 January 2019)

Peter George (non-executive director), has over 30 years’ experience in the IT networking and cybersecurity industry, most recently as President and CEO of empow cybersecurity, a market innovator in AI, machine learning and advanced security analytics. Prior to empow, between 2008 to 2017, he was President and CEO of Fidelis Cybersecurity a leading US-based Advanced Threat Defense business. Before joining Fidelis, Peter was President and CEO of Crossbeam Systems, a market leader in Unified Threat Management. Prior to that he was the President of Nortel Networks’ enterprise business where he was responsible for growing a $2 billion and 5,000 employee voice and data business in EMEA.

 

Ashley Stephenson, CEO (appointed 6 September 2013)

Ashley Stephenson (CEO) first joined Corero Network Security as Executive Vice President of the Network Security division, with responsibility for product and solution strategy in March 2012, and was appointed chief executive officer of the division in January 2013. An IT industry executive and Internet technology entrepreneur, Ashley has operating experience in the United States, Europe and Asia. Previously, he was CEO of Reva Systems, acquired by ODIN, and Xedia Corporation, acquired by Lucent. He has provided strategic advisory services to a number of leading multi-national IT companies including technology vendors, distributors and services companies. Ashley began his career at IBM Research & Development in the UK. He is a graduate of Imperial College, London with a degree in Physics and an Associate of the Royal College of Science.

Andrew Douglas Miller, Chief Financial Officer (appointed 9 August 2010)

Andrew Douglas Miller (CFO and Executive Director responsible for finance) was with the Datatec Limited group in a number of roles between 2000 and 2009 including the Logicalis Group Limited (“Logicalis”) Operations Director and Corporate Finance and Strategy Director. Andrew led the Logicalis acquisition strategy, acquiring and integrating 12 companies in the US, UK, Europe and South America. Prior to this, Andrew gained considerable corporate finance experience in London with Standard Bank, West Deutsche Landesbank and Coopers & Lybrand. Andrew trained and qualified as a chartered accountant and has a bachelor’s degree in commerce from the University of Natal, South Africa.

Major shareholders

As of 31st March 2019 the following shareholders held more than 3% of the issued share capital:

Significant Shareholders

Shareholder
Shares  
%
Jens Montanana * 154,382,609 38.4%
Miton UK Microcap Trust PLC
61,223,917
15.2%
Richard Koch
32,936,500
8.2%
Herald Investment Management 30,306,406 7.5%
Sabvest Capital Holdings Limited 
26,400,000
6.6% 
Peter Gain ** 21,278,246 5.3%
Juniper Networks, Inc 17,008,969 4.2%

* of which 33,674,846 are held in the name of JPM International Limited, which is wholly owned by Jens Montanana and 102,953,954 are held in the name of The New Millennium Technology Trust of which Jens Montanana is a beneficiary.

** of which 4,900,000 shares are held in the name of Draper Gain Investments Ltd

Americas

USA
Corero Network Security Inc.
225 Cedar Hill Street
Suite 337
Marlborough, MA 01752
Tel: +1 978 212 1500
Email: [email protected]

Europe

United Kingdom
Corero Network Security plc
Regus House, Highbridge, Oxford Road
Uxbridge UB8 1HR, UK
Tel: +44 (0) 1895 876579
Email: [email protected]

53 Hanover Street, 3rd Floor
Edinburgh, EH2 2PJ, UK
Email: [email protected]

Spain
C/Ribera del Loira, 46
28042 Madrid, España
Email: [email protected]

Advisors
Nominated Advisor and Broker
Cenkos Securities Plc
6.7.8 Tokenhouse Yard, London, EC2R 7AS

Auditors
BDO LLP
55 Baker Street, London, W1U 7EU

Solicitors to the Company
Dorsey and Whitney (Europe) LLP
199 Bishopsgate, London, EC2M 3U

Registrars and Transfer Office
Link Asset Services
6th Floor, 65 Gresham Street, London, EC2V 7NQ

Shareholder contact: [email protected]

Investor contacts
Secretary and Registered Office
Duncan Swallow
Regus House, Highbridge, Oxford Road, Uxbridge, Middlesex, UB8 1HR

Public Relations Advisers
Vigo Communications
Sackville House, 40 Piccadilly, London W1J 0DR
Tel: +44 (0) 207 7390 0230

Contact: [email protected]

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