Wynyard plunges to six month $37.5m loss

Struggling NZX-listed cyber security company, Wynyard (NZX: WYN) has reported a pre-tax loss of $37.6m for the six months to 30 June 2016, double its loss for the same period in 2015. Revenue was $12.9m, only marginally up on the $12.4m for the same period last year.

These results follow the company earlier this month putting in place a short term $10 million revolving credit facility from major shareholder, the UK’s Skipton Building Society to help manage its working capital needs over the next 12 months.

On a positive note, Wynyard said it had cut its cash burn rate from $4.8m per month in the first half of 2016 to a forecast $2.m in the second half and expected to be cash flow positive by year end “as a result of expected revenue increase and implemented cost savings.”

Revenue for the year to 31 December 2016 is forecast to be in the range $27m-$30m. This is less than half the earlier guidance of $54m-$65m. The company explained the difference saying it was “excluding large government deals ranging between $3m-$20m” adding: “None of the large deals in our pipeline have been lost - we’re making good progress but wish to be cautious in setting market expectations.”

It said customer wins in 1H had been “strongly aligned with a more focused strategic plan and include: a major US County Sheriff’s Department; a US state police force; a major US department of corrections; one of the world’s largest consulting and risk management firms.”

Wynyard Group chair, Guy Haddleton, said: “It’s been a tough first half for everybody; employees, your board and shareholders alike. We have focused our limited resources on building our US public sector business, our Middle East homeland security business and proving our securities analytics opportunity. This relentless focus has yielded significant cash savings of $17m annualised and I believe the company is now in much better shape to deliver on its opportunities.”

Wynyard said its government business was focused on the US and the Middle East, but was targeting commercial customers primarily in Australia and New Zealand, and in the security analytic market with its ACTA product. It describes this as “a second-generation security analytics solution using machine learning technologies and advanced analytic techniques … [that] detects deviations from baseline behaviours, consolidates high risk behaviours and surfaces value alerts for analysis.”

Wynyard said ACTA had been deployed by Telstra in Australia and Deloitte in the US and was “proven to discover unknown unknowns.”