Cipherpoint Limited Directors' report
30 September 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Cipherpoint Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the period ended 30 September 2021.
The following persons were directors of the Company during the whole of the financial period and up to the date of this report, unless otherwise stated:
Edward (Ted) Pretty - Managing Director and Chairman
Steven Bliim - Non-Executive Director (appointed on 21 September 2021) (formerly Executive Director and COO) Graham Mirabito - Non-Executive Director
The principal activity of the Group is the provision of cyber security services development and data security technology to the enterprise and government sectors.
Review of operations
The profit for the Group after providing for income tax amounted to $314,697 (30 September 2020: loss of $1,117,070).
The Company is beginning to gain momentum in identified target markets. Management continues to see growth opportunities in the market for managed security services and data security products.
The Company achieved the following in the first half:
The completion of the acquisition of Brace168 Pty Limited;
A capital raising of $2.9m to drive growth; and
The sale of the Company's cp.Protect and cp.Discover technology assets to ArchTIS Limited.
The Company continues to build a solid sales pipeline and is focused on hiring further sales, pre-sales and technical resources to enable growth.
The Company has seen an improvement in its revenue generating capability as a consequence of the Brace168 acquisition. With purchase orders including five new significant customers as well as growth in existing customers for penetration testing, network and application monitoring and code security reviews valued at $103,000 received subsequent to year end. Additionally, a further two renewals under a master licence agreement with a major customer, valued at $607,000, were received.
As the pandemic and economic environments improve across the world, the Board is confident of capitalising on the sales groundwork completed in the past year, to maximise the growth trajectory of the combined cyber security services business.
Significant changes in the state of affairs
On 1 April 2021, the Company completed the acquisition of 100% of the shares in Brace168 Pty Limited ('Brace168'). Brace168 is a managed security service provider, who monitor customer networks, applications and data to identify threats and respond to security incidents. They have a high mix of annuity revenue across large enterprise and small business customers, operating in the financial, property, social and consumer sectors in Australia. Since acquisition Brace168 has continued to grow its large sales pipeline and deliver strong service revenues and financial results.
In August 2021, the Company raised $2.9m (before costs) to be applied to completion of the upgrade to its security operations centre, acceleration of recruitment activities, further investment into business development and the pursuit of potential acquisition opportunities.
In September 2021, the Company entered into an agreement to sell select assets and products from its software division to archTIS Limited for a purchase price of $1.4m in cash and up to $1m in shares. The Company retained a right to resell the products.
There were no other significant changes in the state of affairs of the Group during the financial period.