Tuesday 20th March 2012 |
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Shares in Endace sank 13 percent after the Auckland-based company, which commercialised cyber-security research done by Waikato University, slashed its annual profit forecast in half.
Endace, which is listed on the London Stock Exchange, expects pretax earnings of US$1 million after adjusting for share options in the 12 months ending March 31, half the US$2 million forecast in October, and almost a third of last year’s US$2.9 million pretax profit.
UK government spending cutbacks have sapped demand for its network security products, and sales will come in 10 percent below predictions, it said in a statement. Endace expects to hold US$4 million in cash at the year end.
“Against the backdrop of continuing economic uncertainty, decision-making by a number of clients remains slow,” the company said. “Budget restraints, particularly in the UK government customer base, have resulted in a shortfall of expected purchases.”
The warning comes after Endace posted pretax earnings of US$200,000 on rising sales of US$18.6 million in the first half.
The shares sank 72.5 pence to 492.5 pence on the London Stock Exchange, the lowest closing level since Oct. 31. That values Endace at 74.9 million pounds.
The tepid economic environment prompted the company to tap Deutsche Bank to review its future options, though the company didn’t elaborate on what those were.
The company provides high-performance traffic analysis, latency measurement, network security and application acceleration solutions that capture, inspect and report on every single data packet, according to its website.
BusinessDesk.co.nz
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