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Corero – announces “secures second $1m+ SmartWall customer”. How much is the order for?

By Steve Moore | Wednesday 17 May 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


An announcement entitled “Corero (CNS) secures second $1m+ SmartWall customer”. Sounds good but, having previously written bearishly on this company, let’s take a look at the detail here.

The announcement states that the company “is pleased to announce an additional order of $0.5m for its SmartWall Threat Defense System”. Wait a minute, I thought it was $1 million+?

Er, it seems this is with “the US-based international hosting provider” customer’s initial $0.7 million order in… March 2016! Corero does though also add “the recurring revenue from this contract now exceeds $0.5 million per annum”.

This though compares with a 2016 results announcement which showed, on revenue of $8.8 million, even after a net $11.4 million of new equity, just a $0.95 million swing in current assets against total liabilities to +$0.19 million and it cash crunch ahoy! As such, I noted I bet the company “pleased to announce… it has conditionally raised approximately £5.6 million”!

This latest order itself won’t change the above cash burn dynamics much and the market hasn’t taken the attempted spin – with the shares currently unchanged on the day. As previously noted, the track-record and financials here suggest continued caution and this currently remains on my bargepole list.


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