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Sophos swings to loss following one-off restructuring costs
6th Nov 2019 07:26
(Sharecast News) - Sophos swung to an interim loss in its first half, it said on Wednesday, after an increase in revenue was offset by higher administrative expenses.
The cyber security company booked a loss before tax of $1.5m for the six months ended 30 September, compared with a profit of $26.0m in the first half of 2018, as finance and administrative expenses jumped by 62% to $72.3m.
The FTSE 250-listed company said the growth of costs was due to exceptional restructuring and legal fees, as well as expenses related to regulatory compliance in overseas markets.
Excluding those factors, adjusted operating profit was down by 1% at $49.4m.
Turnover for the period rose by 5% to $365.8m, driven higher by 8% growth in subscription revenue to $313.7m following a strong performance for Sophos Central, the company's next-gen cloud management platform.
That offset an 8% decline in hardware sales, which dropped to $48.7m.
Sophos, which accepted a $4bn takeover bid from US private equity firm Thoma Bravo back in October, said sales had shown signs of recovery towards the end of the period.
Chief executive Kris Hagerman said: "Our performance in H1 FY20 shows the continued progress we are making towards fully transitioning our business to next-generation cybersecurity. As we pursue this strategy, we are benefiting from our advanced capabilities and investments in the cloud, machine-learning, APIs, synchronized security, automation, managed threat response and more, to deliver enterprise-grade protection to organisations of any size."
Sophos Group shares were down by 0.17% at 571.00p at 0809 GMT.
The cyber security company booked a loss before tax of $1.5m for the six months ended 30 September, compared with a profit of $26.0m in the first half of 2018, as finance and administrative expenses jumped by 62% to $72.3m.
The FTSE 250-listed company said the growth of costs was due to exceptional restructuring and legal fees, as well as expenses related to regulatory compliance in overseas markets.
Excluding those factors, adjusted operating profit was down by 1% at $49.4m.
Turnover for the period rose by 5% to $365.8m, driven higher by 8% growth in subscription revenue to $313.7m following a strong performance for Sophos Central, the company's next-gen cloud management platform.
That offset an 8% decline in hardware sales, which dropped to $48.7m.
Sophos, which accepted a $4bn takeover bid from US private equity firm Thoma Bravo back in October, said sales had shown signs of recovery towards the end of the period.
Chief executive Kris Hagerman said: "Our performance in H1 FY20 shows the continued progress we are making towards fully transitioning our business to next-generation cybersecurity. As we pursue this strategy, we are benefiting from our advanced capabilities and investments in the cloud, machine-learning, APIs, synchronized security, automation, managed threat response and more, to deliver enterprise-grade protection to organisations of any size."
Sophos Group shares were down by 0.17% at 571.00p at 0809 GMT.