Defenx, the mobile security software solutions company, saw revenues rise by 73% to €2.32 million in the six months to the end of June, reflecting the positive impact of new product launches and channel partner wins.
The gross profit margin was 81.5% (1H15: 85.8%) reflecting the increase in amortisation, charged on a straight line basis independent of sales seasonality.
Amortisation of €0.41 million (1H15: €0.17 million) reflects a full period's charge for our Enterprise NAS product plus customer integration costs and the launch of Defenx Mobile Security Suite for Windows 10 in March 2016.
As in previous years, we expect gross profit margins to increase in the second half of the year.
Marketing contributions, staff costs and the costs of maintaining our AIM listing account for the majority of expenses. Strong control of overheads resulted in operating expenses excluding marketing contributions falling 39% compared to 2H15 to €0.71 million (1H15: €0.39 million).
While sales seasonality results in a majority of group revenue falling into the second half, the opposite is true for marketing contributions which are incurred in the first half to front-load the benefit over the whole year. Marketing contributions were €1.48 million (1H15: €0.67 million) reflecting the planned post-IPO investment in developing the Defenx brand.
There has been no recruitment in the first half with staff and consultant costs of €0.39 million (1H15: €0.23 million) reflecting a 32% reduction on 2H15.
The operating loss before exceptional expenses for the Group was €0.30 million (1H15: €0.12 million profit).
Non-recurring expenses of €0.15 million for legal and professional fees in respect of the acquisition of Memopal incurred during the period have been disclosed as exception
Chief executive Andrea Stecconi said: "We are pleased with the strong progress in the first half of 2016 and have delivered against our stated strategy with the addition of new channel partners and products.
"The acquisition of Memopal in August brings a significant opportunity and we look forward to integrating it fully into our existing business to improve and extend our offering.
"Based on our performance to date and strong confirmed order book, we are confident of continuing to deliver significant growth in revenues and profits this year in line with market expectations."