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2022 Annual Report and Accounts, Convertible Loan Notes and Investor Presentation

19 April 2023 - London, UK - Crossword Cybersecurity Plc (AIM:CCS, "Crossword", the "Company" or the "Group"), the technology commercialisation company focused on cyber security and risk, is pleased to announce its final results for the year ended 31 December 2022. The Annual Report and Accounts along with the Notice of its Annual General meeting ("AGM") and a Form of Proxy will be posted to Shareholders shortly and will be available on the Company’s website at

AGM and Investor Meeting

The AGM will be held on Monday 22nd May 2023 at 11.00am at the offices of Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street, London EC3V 0HR.

The Company will be hosting an update on the Investor Meet Company platform on Tuesday 25th April at 12.00pm. The presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and join the Company presentation via:

Financial Highlights

· Achieved highest growth rate since admission to AIM in 2018, with revenue growing 68% to reach £3.65m

· 55% organic revenue growth

· 81% growth in ARR, year-end ARR of £2.4m

· 54% recurring revenue in 2022

· Significant investment in sales and marketing and product development led to higher revenue per client, up 40% year on year

  • Legal and Professional fees increased by c£250k, which included costs of £346k relating to a potentially transformational transaction which did not progress because the vendor made other choices for their business

  • Oversubscribed £3.6m equity fund raise in September 2022

· Loss before taxation of £4.6 million (Restated 2021: £2.7 million). For 2022 and the adjusted 2021 comparative numbers, R&D tax credits are included in Tax and are no longer included in Other Operating Income as in previous years

· Loss before taxation using the 2021 presentation was £3.8m (2021: £2.4 million)

· Total loss for the year £3.4m, after £1.1m of tax credit.

· £2.1m cash and cash equivalents at year end

Operational Highlights

· Rizikon users grew to over 1,000 by the end of 2022

· Leonardo UK selected Rizikon to assist with assessment of supply chain cyber risks, underlining Rizikon’s capacity to deliver at scale

· Acquisition of Threat Status Limited, adding two new products: Trillion™ (credential breach SaaS platform) and Arc (account protection for e-commerce platform and organisations)

· Size of sales deals being secured by Trillion increased significantly compared to before its acquisition by Crossword in March 2022

· Consulting increased its cross-selling drive, selling services into numerous Rizikon clients and successfully introducing Nightingale to several Consulting clients

· Integration of Arc into Sticky Password, one of the industry’s most well-established secure password vaults

· Opened an office in Singapore to support the 24/7 monitoring services provided by Nightingale

· Launch of specialist Supply Chain Cyber Risk practice, with Rizikon wrapped in a full-service consulting offer

· Oman Data Park (ODP) signed a strategic cooperation agreement to provide cyber security risk services to over 800 government, corporate and SME organisations and enhance the protection of the cyber security structure of sensitive information in Oman

· The average number of Crossword employees grew to 63 during 2022, up from 51 in 2021, representing a 24% increase

Post Period Highlights

· Launch of Ransomware Readiness Assessment service in March 2023, helping organisations reduce their exposure to ransomware attacks.


· Targeting revenue growth of circa 50% in 2023 to £6m

· Having invested significantly for rapid growth in 2022, the focus in 2023 is on establishing a clear path to profitability

· Increased emphasis on targeting larger clients that can make full use of Crossword’s range of products and services

Cash and Convertible Loan Notes

On 13 July 2022, the Company announced that Tom Ilube, CEO of Crossword, intended to extend his £250,000 loan notes on the same terms as other loan note holders; these loan notes expired in December 2022. Tom Ilube had been unable to extend his convertible loan notes due to being in possession of inside information relating to the potentially transformational transaction referred to in the Chairman’s Statement, which terminated earlier this year, and due to the Company subsequently being in a closed period. Tom Ilube is now in a position to complete loan notes of £250,000. These will be on the same terms as other loan notes issued or extended in 2022 with the conversion price based on the share price immediately prior to the date of issue. In addition, other potential investors, including Dr. Robert Coles Non-Executive Director of Crossword Cybersecurity Plc, have expressed interest in completing additional convertible loan notes on the same terms. The Company expects to make a further announcement shortly. Cash raised will be used to provide additional general capital for the Group.

Following payment of fees relating to the potentially transformational transaction which did not progress because the vendor made other choices and 1st anniversary earn out payment for Threat Status Limited, cash at 31 March 2023 was £0.5 million. The Company anticipates that it will need to raise additional capital later this year as it continues to progress towards cash break-even and further announcements in connection with this will be made in due course.

Tom Ilube, CEO of Crossword Cybersecurity plc, commented:

“In 2022, Crossword achieved its highest growth rate since admission to AIM in 2018, with total revenue growing 68% to reach £3.65m in 2022.

In an environment of increasing number and complexity of cyber-attacks, Crossword’s business model centred around a strongly growing Consulting division and specialist cyber security products and services with distinct USPs, thrived in 2022.

Services (Consulting and Nightingale) recorded overall growth of 80%, of which 51% was recurring, as clients requested increased cyber consulting services and monitoring to better evaluate their current and potential exposure to cyber-attacks. In Products, Rizikon and Trillion both experienced strong growth, with their specialist features acting as a distinct draw for clients.

Rizikon user numbers grew to over 1,000 users by the year end, with continuous improvement and the launch of new Rizikon modules based on client feedback strengthening its offering year on year. We are confident in continued growth for Rizikon as companies turn to technology solutions supported by specialist consulting to address their supply chain cyber risk requirements.

The size of sales deals being secured by Trillion became noticeably larger compared to before its acquisition by Crossword in March 2022, supported by an increase in dedicated and specialist sales people, an increase in cross-selling, supporting a number of Consulting activities, and inclusion in the sales partnerships launched by Crossword during the period.

Increasing Annual Recurring Revenue (ARR) is a key objective for Crossword. The value of the acquisitions made by Crossword in recent years shone through powerfully in 2022, with all products and services experiencing strong growth. In 2022, Crossword made solid progress in increasing ARR, posting an excellent 81% growth in ARR, with 54% recurring revenue in 2022 for the Company as a whole.

In terms of specific products and services, Rizikon’s ARR grew 43% during the year, Nightingale’s grew 29%, and vCISO’s (virtual Chief Information Security Officer) ARR grew 68%.

Crossword’s focus on increasing the proportion of larger clients in its client mix continued apace. Larger clients are able to make use of Crossword’s range of products and services and incrementally add to revenues year on year as client relationships grow. We were pleased to see that Crossword’s increased investment in sales and marketing and products development is reaping results, with average product and consulting revenue per client increasing by 40% to £28,700 per client, up from £20,500 in 2021.

2022 was a year of significant investment for Crossword, as the Company strengthened its foundations to seize the many market opportunities available. Total cost of sales and administrative expenses increased by £2.6m in 2022 compared to 2021. The increase reflects the acquisition of Threat Status Limited in March 2022, and their inclusion of Stega UK Limited, acquired in August 2021, and Verifiable Credentials Limited, acquired in May 2021, for a full year in the 2022 accounts. Legal and professional fees increased by c£250k, reflecting Crossword’s ongoing drive for acquisitions during 2022. As an ambitious company, Crossword attempted to execute a transformational acquisition in 2022. This would have doubled the size of the company and given us critical mass in one step. However, after spending considerable effort and resources, including £346,000 of legal and professional costs, we were unable to complete the deal because the vendor made other choices for their business, late in the process. We were able to minimise the impact on our core business whilst we worked on this transaction, and therefore continued to drive significant organic growth.

A primary driver for the increase in costs was a 24% increase in the average number of staff during the year compared with 2021. In 2022, Crossword invested significantly in sales and marketing and product development, which are the areas that saw the largest FTE growth.

Having invested significantly for rapid growth in 2022, Crossword has now shifted its focus in 2023 towards establishing a clear path to profitability. Staff numbers have stabilised in 2023, with a strong foundation now in place to drive the revenue growth and path to profitability. Profitability will be underpinned by improving margins, as Consulting revenue scales to achieve critical mass and as product revenues increase. Crossword’s diversified product and services offering will drive scale while containing risk.

The momentum from 2022 places Crossword in a strong position to achieve at least 50% revenue growth in 2023 and our focus on margin improvement will ensure that there is a clear, carefully managed route to achieving profitability in the medium term.”

- Ends -

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain


Crossword Cybersecurity plc – Tel: +44 (0) 333 090 2587


Tom Ilube, Chief Executive Officer

Mary Dowd, Chief Financial Officer

Grant Thornton (Nominated Adviser) – Tel: +44 (0) 20 7383 5100

Colin Aaronson / Jamie Barklem / Ciara Donnelly

Hybridan LLP (Broker) – Tel: +44 (0)203 764 2341

Claire Louise Noyce

For media enquiries contact:

Financial PR:

David Hothersall, Kinlan Communications – Tel: +44 (0) 207 638 3435


Duncan Gurney, GingerPR – Tel: +44 (0)1932 485 300

About Crossword Cybersecurity plc

Crossword offers a range of cyber security solutions to help companies understand and reduce cyber security risk. We do this through a combination of people and technology, in the form of SaaS and software products, consulting, and managed services. Crossword's areas of emphasis are cyber security strategy and risk, supply chain cyber, threat detection and response, and digital identity and the aim is to build up a portfolio of cyber security products and services with recurring revenue models in these four areas. We work closely with UK universities and our products and services are often powered by academic research-driven insights. In the area of cybersecurity strategy and risk our consulting services include cyber maturity assessments, industry certifications, and virtual chief information security officer (vCISO) managed services.

Crossword's end-to-end supply chain cyber standard operating model (SCC SOM) is supported by our best-selling SaaS platform, Rizikon Assurance, along with cost-effective cyber audits, security testing services and complete managed services for supply chain cyber risk management. Threat detection and response services include our Nightingale AI-based network monitoring, our Trillion and Arc breached credentials tracking platforms, and incident response. Crossword's work in digital identity is based on the World Wide Web Consortium W3C verifiable credentials standard and our current solution, Identiproof, enables secure digital verification of individuals to prevent fraud.

Crossword serves medium and large clients including FTSE 100, FTSE 250 and S&P listed companies in various sectors, such as defence, insurance, investment and retail banks, private equity, education, technology and manufacturing and has offices in the UK, Poland and Oman. Crossword is traded on the AIM market of the London Stock Exchange.

Chair’s Statement

Growth accelerates rapidly in 2022

Crossword continued to build a strong and stable business, backed by our strategy of building a significant intellectual property-based, AIM quoted cyber security business.

Crossword recorded impressive revenue growth of 68% in 2022. The Company completed its third acquisition and continued to reap the benefits of successfully integrating previous acquisitions, with annual recurring revenue growing by 81%. Rizikon ended 2022 with over 1,000 organisations using the platform and our blue chip cyber security consulting team is growing its client base with major FTSE and Fortune clients.

Our focus now is to drive to profitability, underpinned by targeting healthy revenue growth of over 50% in 2023.

Further progress with our acquisition strategy

Crossword continued to build on its acquisition strategy in 2022 with the successful acquisition of Threat Status Ltd., a threat intelligence company. This added two additional products to the Crossword portfolio, Trillion™ and Arc. Arc is a similar product to Nixer, so post-acquisition, management took the decision to merge the two products, under the Arc product brand.

Later in the year, in line with its stated acquisition strategy, Crossword tested a further acquisition opportunity and decided it would not be in the interests of the company to proceed at that time. This exploratory approach signals the scale of Crossword’s ambition to build a scaled up, profitable

cyber security company.

A strong balance sheet and robust governance

To ensure that we had the funds to progress with our rapid growth, Crossword issued additional £550k of Convertible Loan Notes in July 2022 and carried out a £3.6m oversubscribed equity fund raise in September 2022. We are very pleased that our shareholders continue to see the growth opportunities for Crossword and we would like to thank them for their commitment.

To ensure that we maintain a robust framework of controls and high standards, the Board continues to adhere to the Quoted Companies Alliance (“QCA”) Corporate Governance Code (the “QCA Code”) in line with the London Stock Exchange’s requirement for all AIM quoted companies to adopt a recognised corporate governance code. The Corporate Governance Statement on page 38 of this report provides

further details.

Continued healthy growth with a clear path to profitability

Having invested significantly in 2022 to achieve impressive growth of nearly 68% over the past year, Crossword has now shifted its focus to defining a clear path to profitability. This is backed by strong current momentum, which aims to grow revenue in the region of 50% in 2023.

I am very proud of what our expert team has achieved over the past year and I would like to acknowledge them all. Crossword has a very strong culture and its core values of responsibility, openness, flexibility and learning underpin everything we do and are a source of particular strength that

we will leverage to grow into a strong, stable and profitable business.

Sir Richard Dearlove KCMG OBE

Chair, Crossword Cybersecurity

18 April 2023

Chief Executive Officer’s review

It is my pleasure, as Chief Executive Officer, to present the Annual Report and audited accounts for Crossword Cybersecurity Plc (‘Crossword’ or the ‘Company’ or the ‘Group’) for the financial year ended 31 December 2022.

Crossword grew revenue by a very impressive 68% to reach £3.65m in 2022, its highest growth rate since admission to AIM in 2018. This proves that Crossword’s services and products

have achieved real traction with a wide range of clients. With this momentum, we expect to see our growth rate continue strongly into 2023, whilst we drive towards profitability, which is our main priority now.

We were particularly pleased to see annual recurring revenue increase by 81% over the prior year and reach £2.4m. Whilst acquisitions naturally contributed to this strong growth in revenues, Crossword also recorded 55% growth in organic revenues.

The constantly increasing number and the growing sophistication of cyberattacks means that spending on cyber security defence is a key priority for business and governments. In 2021, the average number of cyberattacks and data breaches increased by 15.1 per cent. from the previous year. Over the next two years, security executives from over 1,200 companies polled by ThoughtLab in its 2022 cybersecurity benchmarking study see a rise in attacks from social engineering and ransomware as nation-states

and cybercriminals grow more sophisticated. As a result,“Cybersecurity failure” was ranked as a top-five risk over the next two years in East Asia and the Pacific as well as in Europe in the World Economic Forum’s 2022 Global Risks Report, while four countries, namely Australia, Great Britain, Ireland and New Zealand ranked it as the number one risk. Many small, highly digitalized economies such as Denmark, Israel, Japan, Taiwan (China), Singapore and the United Arab Emirates also ranked the risk as a top-five concern.

With the ever increasing cybersecurity market, in 2022 we made it our mission to achieve critical mass by investing for growth. The executive team wanted to accelerate Crossword’s growth aiming to achieve real momentum that would carry us into 2023 and beyond. We also made the decision to continue with our acquisition strategy and we succeeded in closing another excellent transaction by securing Threat Status Limited. Threat Status brought two excellent products into Crossword’s portfolio, Trillion™ and Arc. Both products deliver recurring revenue to the business and brought a range of

new clients to Crossword. Trillion™ is a data breach platform that contains billions of carefully curated and continuously updated credentials that organisations can search to check the status of their usernames and passwords. Arc makes this same vast pool of information available in a different form to

product websites to protect against credential attacks. Due to Arc’s overlap with our existing product, Nixer, we made the decision to merge the two products, under the product brand

name of Arc.

Rizikon, Crossword’s lead product, ended 2022 with more than 1,000 organisations using the freemium version, trialling or contracted to use the product. In June we launched a new service, Supply Chain Cyber, with Rizikon at its heart wrapped in a full-service consulting offer. We are developing new leading edge modules for Rizikon and are in conversation with several potential large scale supply chain cyber clients. Increasing regulatory pressure on companies to monitor and take control of supply chain cybersecurity risks is also aiding the growth of Rizikon’s sales pipeline.

Crossword’s profitable and fast growing consulting business is now a trusted supplier to a number of large and medium sized companies, as well as continuing to work with smaller, entrepreneurial companies. Our vCISO (virtual Chief Information Security Officer) service, continues to be popular with all sizes of client and delivers a growing stream of recurring revenue. Along with our Nightingale network monitoring platform, which we acquired the previous year with the Stega acquisition, the Services business saw very positive overall growth of 80%, of which 51% is recurring.

On the international front, Crossword invested time and effort to firmly establish itself in Oman and is using that as a base to explore opportunities in the wider Gulf region. This effort has put us in prime position for a major Government contract in the region that, if we are successful, will generate significant revenue as well as make Crossword a strategic cyber security supplier across Government. We also signed a distribution agreement with Oman’s major cloud services provider who will offer our Trillion™ product and other Crossword services to their 600 client organisations. Outside of Oman, we won business in the insurance sector in Bermuda as well as established a small team in Singapore to enable us to offer our Nightingale network monitoring service on a 24 hour basis to major clients.

During 2022, Crossword took steps to ensure that it had the funding it needed to continue executing on its strategy. Crossword extended its Convertible Loan Note programme by adding a further £550k of loan notes in July and completed a £3.6m equity fundraise in September through an oversubscribed subscription of Crossword Ordinary Shares. I was very pleased to welcome several major new

shareholders and delighted that our existing shareholders continue to back our vision and support our commitment to the journey.

Crossword is now a 70-strong, well respected, British cyber security business, with a growing reputation in the UK and beyond. We take our wider social responsibilities seriously and have supported our Polish colleagues in their efforts to help Ukrainians exiled in Poland, by matching staff donations each month for a period of 6 months up to PLN 2,500 each month.

As I close, I particularly wish to thank everyone who has helped Crossword achieve this record revenue growth which, at 68% is our fastest annual growth rate since Crossword joined AIM. Having invested significantly for rapid growth in 2022, we have now shifted our focus in 2023 towards a clear

path to profitability. The momentum from last year places us in a strong position to achieve at least 50% revenue growth in 2023 and our focus on margin improvement will ensure that there is a clear, carefully managed route to achieving profitability in the medium term. Crossword’s exceptional team and its culture of responsibility, openness, flexibility and learning, gives me and the whole Executive team the confidence that we will achieve our goals for our staff, our clients and our investors.

Tom Ilube, Chief Executive Officer

Crossword Cybersecurity

18 April 2023


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