Corero security unit outperformed by legacy education biz


Corero security unit outperformed by legacy education biz

Alex Scroxton

Buy-and-build security outfit Corero Network Security has booked a first half pre-tax loss at its core business, acquired earlier this year through a reverse takeover of Top Layer, but saw strong growth at its non-core education-focused business, Corero Business Systems (CBS)

The Top Layer business, now rebranded as Corero Network Security (CNS) accounted for the bulk of the group's sales growth, booking revenues of £2.7m but made a pre-tax loss of £717,000.

CBS, meanwhile, made sales of £1.89m and an operating profit of £527,000 as it successfully leveraged demand among schools converting to Academies.

The stronger performance on the non-core business led Tola Sargeant, analyst at TechMarketView, to suggest that should Corero let CBS go, "there would no doubt be interest from a variety of players in the UK education market, such as market leaders Capita and RM."

Overall, group sales for the six months to 30 June rose to £4.6m from £1.4m last year, although the group still fell to a pre-tax loss of £849,000.

Chairman Jens Montanana was nevertheless optimistic that continuing investment in both businesses would soon pay off.

"The benefit of this investment in CNS marketing, sales and product development, the launch of the DDoS defence product and accelerating revenue growth from CBS is expected to be seen in the second half of 2011 and 2012," he said.

The group said it would look to boost its investment in sales, marketing and product development at CNS to take advantage of a growing market for security solutions. It also hopes to boost its headcount organically by around 30 before the end of the year. CBS, meanwhile, will look to recruit 20 new staff to exploit the growing Academy market.

Corero remained silent over the possibility of future acquisitions; despite chairman Jens Montanana's plans to use the business for a roll-up of security firms it has not bought since, preferring to focus on getting the integration of Top Layer right.

However it previously told MicroScope it would look to acquire again before the end of 2011.

Separately, the group has also named Marty Meyer as its new CEO. Meyer joined the firm as CFO earlier this year.

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