REG - Crossword Cybersec - Post Close Trading Update

Crossword CybersecurityAnnouncement

16/01/2023 12:00

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RNS Number : 8498M  Crossword Cybersecurity PLC  16 January 2023

Post Close Trading Update

2022 revenue up 59% to £3.7m.

2023 revenue growth of target 60% to c£6m.

 

16 January 2023 - London, UK -  Crossword Cybersecurity Plc
(http://www.crosswordcybersecurity.com/) (AIM:CCS, "Crossword", the "Company"
or the "Group"), the cybersecurity solutions company focused on cyber strategy
and risk, is pleased to confirm that it expects to report total revenue of
£3.7m, including £56k of grant income, (unaudited) for the year ended 31
December 2022, an increase of 59% from the previous year. Furthermore, the
Company is projecting the revenue growth rate for 2023 to be circa 60%, to
achieve total revenue of circa £6m in 2023.

Crossword had a strong H2 2022, with cybersecurity consulting and product
related revenue growth of over 100% compared to H1 2022. Organic growth for
the year was 56%.  Recurring revenue of 58% was achieved, and 2022 closing
ARR was £2.4m, which is growth of 81% over the previous year.  The
intensified demand for Crossword's products and services in H2 2022 provides
strong momentum going into 2023.  In the product division, Rizikon and
Trillion were the major contributors to growth. The Services division likewise
recorded strong growth, driven by larger contract sizes, both in Consulting
and Managed Services.

Rizikon, Crossword's leading product, continued to perform strongly. Demand
was driven by its attractive features that provide recurring savings and
increased efficiency for clients needing to manage cyber risk emanating from
their suppliers. With over 1,000 organisations using Rizikon to assess over
8,000 suppliers at the end of 2022, Rizikon achieved its target of 1,000 users
by the year end.  In November, Crossword announced a major agreement with the
UK arm of international defence and security company, Leonardo.  Leonardo UK
will utilise Crossword's Rizikon platform to enhance visibility, automation
and efficiency in their assessment of cyber risks throughout their supply
chain of 2,100 companies in the UK, two thirds of which are SMEs.

Crossword's Trillion product experienced strong revenue growth in H2 2022, as
its vast scalability and ease of adoption drives client demand. Trillion
continuously tracks, correlates and analyses billions of stolen usernames and
passwords, providing clients with account breach protection. Trillion's
average client contract size continued to grow during the period, as adoption
by larger companies and entities increased. By way of example, in H2 2022
Spain's National Cryptological Centre deployed Trillion to provide a central
view of threats across the Spanish public administration and public education
sector, protecting hundreds of thousands of users.

In H2 2022, Crossword continued with the ongoing development and
commercialisation of Identiproof, its verifiable credentials suite of
products. In parallel, Crossword worked on the merging of Arc and Nixer into
an enhanced product focused on account protection for B2C commerce platform
owners.

The Services division again performed strongly during the period. Consulting
saw continued improvement in gross margin as Crossword continues to grow the
number of larger clients and records increasing revenue per client. In Managed
Services, demand for Nightingale, Crossword's comprehensive security
monitoring platform, continues to grow. Nightingale brings together multiple
facets to identify organisational assets, users, traffic, networks and
endpoints in order to mitigate the threats and vulnerabilities an organisation
faces. Nightingale's clients at present are mainly financial services
companies, providing recurring fees.

Internationally, Crossword made good progress on a number of fronts. In
November 2022, 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. Crossword sees multiple opportunities to
grow its products and services in Oman and the Gulf region and is continuing
to grow its sales pipeline. In Singapore, Crossword's team is now well
established and is enabling the conversion of the pipeline of larger clients
that require around the clock monitoring.

Revenue growth in 2023 will be led by growth in both cybersecurity consulting
and product related revenue, driven by the attractive features of Crossword's
products in the market and increased cross-selling.  Since May 2021,
Crossword has successfully integrated three acquisitions, resulting in an
expanded portfolio of SaaS products and services to offer clients. Growth in
cross-selling to Crossword's established client base will make a significant
contribution to overall revenue growth in 2023. During 2022 Crossword has
continued to invest in cross-selling processes with the objective of
optimising cross-selling opportunities. The three acquisitions means that the
sales team now benefits from an expanded product portfolio to grow established
client relationships as well as develop new ones and is well placed to
integrate further acquisitions.

The closing cash as at the end of December 2022 was £2.1m.  During 2022, the
Company extended £700k of its £1.4m convertible loan notes in issue at
December 2021, to June 2025.  Two loan note holders loaned a further
£150,000 to the Company. The extensions and new loan notes from current
lenders had a conversion price of 25.2p. Additionally, 3 year convertible loan
notes of £650k were issued at a conversion price of 26.1p in July 2022.
£700k of loan notes were repaid at the end of their term in December 2022.
The current convertible loan note balance is £1.5m, and they have a repayment
date of mid-2025.  As announced on 13 July 2022, Tom Ilube, CEO of Crossword
intended to extend his £250,000 loan note on the same terms as the other loan
note holders. Tom Ilube's loan note has expired and Tom intends to make his
investment in the form of a new investment, the form, content and timing of
which are currently under discussion with the Company and its advisers.

 

Tom Ilube CBE, CEO at Crossword Cybersecurity Plc, said:

 

"Demand for Crossword's leading products and services grew strongly in 2022 by
59% thanks to servicing areas of high demand and the quality of our offering.
I am delighted that in 2022 Crossword made outstanding progress in growing its
average contract value and increasing the contribution of cross-selling to
revenue growth. In 2022, Crossword completed its third successful acquisition,
delivering on its acquisition strategy. As previously highlighted, Crossword's
strategy is to continue building on its organic revenue growth and to acquire
outstanding cyber security companies that complement and diversify its revenue
base.  Regarding acquisitions, discussions are being held that are leading to
positive conversations currently taking place.  Crossword enters 2023 with
strong momentum and a highly capable team to leverage a growing pipeline and
we look forward to updating shareholders on progress."

 

- 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.

 

Contacts

 

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

Email: info@crosswordcybersecurity.com

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

davidh@kinlan.net - Tel: +44 (0) 207 638 3435

General:

Duncan Gurney, GingerPR

duncan@gingerpr.co.uk - 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.

Visit Crossword at https://www.crosswordcybersecurity.com/
(https://www.crosswordcybersecurity.com/)

 

 

 

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