REG - Narf Industries PLC - Business Update & Financial Guidance

Narf IndustriesAnnouncement

07/11/2024 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241107:nRSG2336La&default-theme=true

RNS Number : 2336L  Narf Industries PLC  07 November 2024

7 November 2024

NARF INDUSTRIES PLC

('NARF', the 'Company', or the 'Group')

 

Business Update & Financial Guidance

 

Growing traction for "Social Cyber" platform drives updated business model

 

Narf Industries plc (LSE: Narf), the cybersecurity group specialising in
high-end threat intelligence and critical infrastructure security, is pleased
to provide an update on the commercialisation of its AI-Powered Social Cyber
Solution ("Social Cyber") and financial guidance.

 

OVERVIEW

·    Continued progress in accelerating the Social Cyber platform towards
commercialisation.

·    Re-aligned team focused on early concept demonstrations of Social
Cyber to drive a joint venture opportunity.

·    First Social Cyber contract for $1.3 million announced ahead of
schedule (see RNS dated 27 August 2024)

o  This contract is helping to support product development.

·    Concept demonstrations and first Social Cyber contract win resulting
in:

o  Engagement with wider group of Government Systems & Solutions
("GS&S") customers and potential for recurring annual revenue.

o  Interest amongst major cybersecurity systems integrators and service
providers to form a joint venture to commercialise Social Cyber with a more
lucrative Software as a Service ("SaaS") revenue model.

 

OPERATIONS UPDATE

In February 2024, Narf announced that its AI-powered Social Cyber platform had
been recognised as a leading candidate within its R&D portfolio for
commercialisation. The Company subsequently shifted its strategic focus,
reallocating resources to address the rising demand for cybersecurity
solutions specifically targeting vulnerabilities in the open-source software
supply chain. This adjustment was underscored by the April 2024 discovery of a
backdoor in XZ Utils (see RNS dated 1 May 2024), which highlighted the
critical need for enhanced security in open-source software.

 

The Company is pleased to report that its change in strategic direction to
focus resources on the development of its Social Cyber platform has progressed
in a balanced and positive manner and is being achieved within its existing
capital resources. Narf remains financially stable while positioning itself
for the significant upside that its Social Cyber platform promises.

 

Social Cyber Resource Allocation

An earlier-than-expected $1.3 million Social Cyber contract award for work
with the Air Force's Platform 1/Iron Bank has helped offset part of the
Company's planned resource allocation for the development of its Social Cyber
platform. This external funding has directly supported its product
development, allowing the Company to stretch its internal resources further,
while staying on track with its development timeline.

 

Government Traction with Social Cyber Platform Opportunity

The reallocation of resources toward the Company's Social Cyber platform
required a shift of focus from other government programmes, making it crucial
that the Company should gain meaningful traction for its Social Cyber platform
within its government customer base. The Company is pleased to report that
this traction is building on the back of the Platform1/Iron Bank contract and
that the Company's Social Cyber platform is beginning to generate
opportunities that over the next 12 months are projected to surpass those it
would otherwise have achieved from government contracts it set aside.

 

Social Cyber Spin-Off

With solid traction among government customers and having demonstrated the AI
technologies and capabilities within its Social Cyber platform, the Company is
seeing interest from industry partners regarding potential investment,
expanding market opportunities and the acceleration of commercialising Narf's
Social Cyber platform with a more lucrative Software as a Service ("SaaS")
revenue model. The Company therefore believes it is on track to achieving its
objective of entering a joint venture partnership with strategic partners in
early 2025.

 

FINANCIAL GUIDANCE

The Company has experienced some budget funding delays from its U.S.
government clients in respect to existing contracts and the granting of some
new contract awards until the budget was finalised. These delays, combined
with rising awareness of threats to the global open-source software supply
chain, provided the Company with the capacity to accelerate the development
and commercialisation of its Social Cyber platform.

 

With the U.S. budget now approved, the Company expects to receive a number of
new contract awards in the coming months. Additionally, it has expanded its
government client base by partnering with established defence and intelligence
contractors, which have strong government relationships and will help mitigate
similar government budget approval risks in the future.

 

Narf projects that revenue for the year ending 31 March 2025 will be not less
than $5 million, with the Company broadly at cash flow break-even at the FY
end. For the following year ending 31 March 2026, the Company anticipates
revenue of not less than $8 million, having fully navigated any impact from
last year's U.S. budget delays.  This guidance does not include a significant
contribution from our Social Cyber platform development, and we would be
disappointed not to see some incremental revenues from this platform over the
next financial year.

 

Steve Bassi, President and CEO of Narf Industries said: "We are continuing to
make good progress in targeting new opportunities in the area of Social Cyber
and extending the capabilities to create a new generation AI Powered DevSecOps
platform (see below).  This is expanding our government opportunities and
driving  growing interest from strategic partners as we work to finalize our
joint venture in early CY25."

 

ABOUT NARF'S SOCIAL CYBER PLATFORM

Narf's Social Cyber platform introduces a groundbreaking approach to
integrating security earlier in the software development lifecycle, addressing
a critical need in development operations ("DevOps") environments where
security often takes a back seat to speed and efficiency. Traditionally,
security checks occur late in the pipeline, creating delays and
vulnerabilities that disrupt workflows and require costly reworks. Narf's
Social Cyber platform changes this dynamic by embedding advanced
instrumentation and observability ("I&O") into the pipeline itself and
providing AI powered real-time threat detection and proactive risk management
without slowing down development. This approach not only ensures a more secure
software supply chain but also allows DevOps teams to maintain the agility and
pace they rely on, making Narf's Social Cyber platform a valuable asset for
organisations seeking seamless, early-stage security integration.

 

For further information visit www.narfgroup.com or contact:

 

 Narf Industries plc         John Herring      jh@narfgroup.com
 Joint Broker                Simon Bridges     Tel: +44 (0) 207 523 8000

 Canaccord Genuity Limited   Harry Rees
 Joint Broker                Peter Krens       Tel: +44 (0)207 186 9030

 Tennyson Securities plc
 Financial PR, UK            Paul Dulieu       narf@stbridespartners.co.uk

 St Brides Partners          Isabel de Salis

 

About NARF Industries plc

Narf Industries (LSE: NARF) is a U.S. based leading provider of cybersecurity
research, solutions, and services to government entities. With a steadfast
commitment to protecting national security and critical infrastructure, it
offers comprehensive expertise in addressing the evolving cyber threats faced
by its clients.

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDQQLFBZFLZFBV