Over £540m Wiped Off From Sophos

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Over £540 million has been wiped off the value of Sophos after it reduced its forecasts for the second half of the financial year.

The company stated that “challenging year-on-year” comparatives meant that it now expected just a modest improvement in billings growth through to March of next year.

Previously, it had hoped for “mid-teens” billings growth after it warned that it would not be able to keep up with the rapid growth of last year after high profile ransomware attacks.

The shares initially dropped by 39 percent, however, it gained some ground back to trade 25 percent down in the afternoon. It wiped more than £540 million off the value of the firm.

Kris Hagerman, the chief executive of the company, stated: “The market opportunity remains significant, and we have continued to add new customers while expanding and supporting our channel.”

He added: “We are confident that we are well positioned to deliver future growth.”

He continued: “We now expect a modest improvement in constant currency billings growth in H2 FY19 compared to the first half, as we continue to work through challenging year-on-year comparatives.”

Earlier this year, the firm warned that the growth would not be able to keep up with the “dramatic acceleration” of the previous year when its customers invested in protection against global ransomware outbreaks.

The company is based in Oxfordshire. It re-affirmed the warning in today’s trading update.

It stated: “The year on year growth rate was impacted by a challenging comparable in our Enduser business, given the dramatic acceleration in demand we witnessed in the comparative period as customers urgently invested in protection against high-profile, global ransomware outbreak.”

For the six months ending on the 30th of September, Sophos reported a billings growth that amounted to three percent to $353 million (£268 million) and swung to a pre-tax profit of $26 million through a combination of strong revenue and foreign exchange benefits.