Defenx PLC (LON:DFX) Update & WH Ireland Comments

Published On 28th January 16

Defenx Plc (LON:DFX) is a profitable, fast growing software company focused on the provision of anti-malware products for a range of devices from traditional PC’s, to smart phones and Network Attached Storage (NAS) drives. With a 27% CAGR in EPS over three years (2014A to 2017E) combined with its shares currently trading at a mere 9.1x 2016E PER, we believe Defenx offers investors an attractive proposition: growth and value, which in our opinion makes it the investment vehicle of choice to gain exposure to the fast growing cyber security market. We initiate coverage on Defenx with a Buy rating. Initiation of coverage: Market Cap: £7.1m; Current Price: 117p

Defenx Plc today provided an update on current trading and anticipated results for the year ended 31 December 2015.
• Admission to AIM in December 2015, raising £2.1 million
• Financial results for the year ended 31 December 2015 in line with management expectations
• Revenues in the region of €4.3m representing 80% year-on-year growth
• Memopal strategic relationship already yielding results
Financial Performance
In December 2015, the Group was admitted to trading on AIM, raising £2.1 million before expenses via a placing and subscription with new and existing investors.
The Group is pleased to report that its financial results for the year ended 31 December 2015, which are expected to be released in April 2016, are in line with management expectations. Defenx traded well in the second half of 2015 and expects to report revenues for the year ended 31 December 2015 in the region of €4.3 million (2014: €2.4 million) representing 80% year-on-year growth.
Defenx has now sold over 2.9 million security software licences, reflecting continued strong demand from channel partners and end-users.
Memopal strategic relationship
The company’s strategic relationship with Memopal, whose shareholders invested €1 million in the IPO, continues to develop rapidly. Memopal, founded in Rome in 2007, is a cloud storage provider that offers multi-lingual, multi-device file synchronisation and backup. Memopal’s internally-developed software provides highly cost-competitive and scalable cloud storage infrastructure to customers in 75 countries.
The Directors believe that this strategic relationship provides the Group with significant cross-selling opportunities due to the complementary nature of its product offerings with those of Memopal.
The Group is already engaged with Memopal’s key customer and anticipates launching Defenx security products with them in the coming months. In addition, several of the Group’s channel partners have expressed a strong interest in Memopal’s solutions, which will sell under the Defenx brand, sharing revenue with Memopal.
2016 Outlook
Trading conditions for the Group remain positive and the board is confident that 2016 will show continued growth in revenue and profit driven by the launch of new products and its expanding channel partner relationships consistent with its stated strategy.

Andrea Stecconi, Chief Executive of Defenx PLC, commented: “I am pleased that, since our successful admission to AIM last December in extremely challenging markets, we continue to grow by bringing our security and protection products to an ever wider audience. Our distinctive B2B business model will enable us to capitalise profitably on increasing public awareness of mobile security and privacy threats. I look forward to reporting on new products, channel partners and continued strong growth in 2016.”