03 Aug 2020 – London, UK – Crossword Cybersecurity Plc (AIM:CCS, “Crossword”, the “Company” or the “Group”), the technology commercialisation company focused solely on cyber security and risk, is pleased to provide the following trading update ahead of the Group’s interim results for the six months ended 30 June 2020, which are expected to be released in September 2020.
Within revenues, as anticipated, income from Consulting and product sales were 43% higher than the comparative period in 2019, with planned reduction in revenues from software development. The Company expects to report total revenues of £674k, 18% ahead of the comparative period in 2019. Although there is a high degree of uncertainty due to the current economic climate, the Company is cautiously optimistic of reporting full year results in line with market expectations, subject to the outcome of a few major product led bids over the coming months, and continued conversion of our pipeline of opportunities.
At the end of June 2020, the Group’s closing cash position was £1.6m. This reflects the £1m equity fund raise completed in early May 2020.
Highlights of the period
Early in 2020, Sean Arrowsmith joined Crossword as Group Sales Director, responsible for both product and consulting sales activity, strengthening the leadership team. Additionally, Dr Robert Coles took on the role as Non-Executive Chair of Crossword Consulting Ltd, the Group’s consulting subsidiary.
Software and process development in the first half of 2020 culminated in the launch of Rizikon Pro post period, on 16 July 2020. Rizikon Pro is an out-of-the-box, online SaaS solution, offered on a pay-as-you-go basis, giving smaller and medium sized organisations access to a set of core easy-to-use supplier assurance platform features, at a lower cost. Modules can be chosen according to need, meaning customers only pay for the features they use, and can be expanded as required. Crossword anticipates a rapid roll out to a wider client base over the coming year.
Crossword demonstrated Rizikon Assurance’s value within large and complex enterprises, with some notable client wins, including Cammell Laird, one of the most famous names in British industry, and Barron McCann, the IT Services company. In Q2 2020, Crossword began collaborating with leading security reseller and managed security services provider Satisnet Limited, on the provision of third party assurance technology to its clients, as part of the expansion of Crossword’s partner programme. The number of Rizikon opportunities continued to grow in the period.
Crossword’s cyber security consulting division continued to grow in a range of high-profile sectors including legal, insurance and financial services. Crossword issued guidance for businesses on how to address some of the most common security concerns for employees when working from home. The advice was made widely available as many of Crossword’s clients mobilised to keep their businesses running as normally as possible whilst adhering to UK Government and Public Health advice designed to control the spread of the COVID-19 virus.
In April 2020, Crossword completed £1m equity fundraise through a placing and subscription of Crossword Ordinary Shares at a price of 230 pence per share.
COVID-19, Brexit and a host of Environmental, Social and Corporate Governance (ESG) matters, have highlighted weaknesses within supply chains, raising awareness of the financial, regulatory, and reputational risks organisations indirectly carry. The launch of Rizikon Pro is expected to drive a reduction in the sales cycle timescales, as the technology offered on a pay-as-you-go basis, is expected to be attractive to a large section of small and medium sized organisations.
At the end of June, Crossword launched a series of webinars which cover topics from ‘the focus of the CISO in two years time’ to a ‘live demo of a real world stuffing attack’. As part of this series we will be launching a webinar on Diversity in the Cyber Security and Technology Industry hosted by Tom Ilube, Crossword’s CEO, previously ranked first in the Powerlist of the UK’s most influential Black people.
With the end of the furlough scheme likely to have widespread impact across the business sector and the shape of the economic recovery still unpredictable, the second half of 2020 is difficult to forecast. As things stand, Crossword has secured contracts worth more than 50% of the revenue required in the second half of 2020 to achieve results in line with market expectations. With a healthy pipeline, there is cautious optimism of delivering on the market expectations, although this depends on the outcome of several large bids that are currently in progress.
Our flexible approach enabled us to quickly and effectively implement remote working, before it was mandated, with minimal impact on clients and sales activity. Costs have been closely monitored and managed throughout this time of increased uncertainty in order to be prudent, with a hiring freeze in place, some redundancies and careful management of any discretionary spending. Advantage has been taken of the Government’s Coronavirus Job Retention scheme, with some staff now returning to work.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
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Crossword Cybersecurity plc – Tel: +44 (0) 20 3953 8460
Tom Ilube, Chief Executive Officer
Mary Dowd, Finance Director
Grant Thornton (Nominated Adviser) – Tel: +44 (0) 20 7383 5100
Colin Aaronson / Jamie Barklem / Niall McDonald
Hybridan LLP (Broker) – Tel: +44 (0)203 764 2341
Claire Louise Noyce
About Crossword Cybersecurity plc
Crossword Cybersecurity plc focuses on the development and commercialisation of university research-based cyber security and risk management related software and cyber security consulting. The Group’s specialist cyber security product development and software engineering teams work with its university partners to develop the research concept into a fully-fledged commercial product that it will then take to market. The Group’s aim is to build up a portfolio of revenue generating, intellectual property based, cyber security products. Rizikon Assurance, Crossword’s leading product, is a SaaS platform that enables medium to large companies to assess and manage all risks from their suppliers. Nixer CyberML, Crossword’s most recently launched product, is a new tool for businesses that want to solve advanced security and cybercrime problems, such as detecting and dealing with compromised accounts, fraud, and in-application denial of service attacks. Crossword’s team of expert cyber security consultants leverages years of experience in national security, defence and commercial cyber intelligence and operations to provide bespoke advice tailored to its clients’ business needs.
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