Q&A with Guido Branca COO & Philipp Price CFO at Defenx PLC (LON:DFX)

Defenx PLC (LON:DFX) Chief Operating Officer Guido Branca and Chief Financial Officer Philipp Price caught up with DirectorsTalk for an exclusive interview to discuss their 2015 Full Year Preliminary Results, routes to market, how the market is developing and their good start to 2016

 

Q1: First off, congratulations to you both on Defenx PLC’s maiden Full Year results since the IPO. Philipp, can you talk us through the highlights?

A1: Sure, I’d like to make three points I think. The first is the top line of revenue growth, 88% year on year growth to €4.5 million, it exceeds market expectation slightly and we’re very pleased with that. It’s been driven by real awareness in the mobile space, that you need to protect your phone, and 70% of our revenues come from the mobile space but it’s also driven by our B2B model which I’ll discuss in a moment. The second is that this is the fourth year of profitable growth, we’ve grown sales fivefold in the last four years. Thirdly, the end of last year we successfully IPO’d on AIM and we really see this as a start for the future, to set us up with funding, profile, paper currency and the ability to do deals as and when with customers, channel partners and maybe in the future M&A so we’re very confident that the costs and the pain last year really set us up for next year.

 

Q2: Guido, can you explain your routes to market?

A2: Yes, it’s been mentioned but we have a B2B strategy, we call it a channel partner strategy, so we provide security apps, cloud solutions, to end users such as families, small businesses and individuals but Defenx PLC don’t sell directly to those end users, we use a channel strategy that includes distributors, resellers, OEM’s, device manufacturers, systems integrators, these are our clients. We provide them with inventory to sell to their end users so we leverage those pre-existing relationships giving us a faster route to market and we target very large markets because obviously mobile phones, we’re talking about 3.6 billion subscribers worldwide, PC’s we’re talking about 1.8 billion PC’s being used every day, those need to be protected, they need to have cloud backup and sync services, so we provide great solutions to large homogenized markets through a B2B or channel partner strategy. That is our business model and we share the revenue with them, we white label our products and we integrate to their back end, their business systems so we do offer more than what our competitors do both in terms of what devices are being offered but also what our channel partners are being offered, we create sticky relationships with our clients.

 

Q3: Can you tell us a bit more about how you’re seeing the market develop?

A3: Obviously we’re in the security and data business, there’s more malware ever year, Symantec just came out with an analysis that shows there’s 77% more malware variants in 2015 than 2014, there’s more exploit kits available; these are the devices used by hackers to build malware, there are more threats, we read about it in the press every day and more actors are playing in this field than ever before, you don’t just have hackers; white hats or black hats, but you have governments, you have terrorist organisations, all sorts of players are coming into this space, threatening your personal devices. So security is growing for the mobile user and it’s growing especially for the android mobile user and that’s what we’re focussed on. So that’s in terms of the security. In terms of the cloud, there’s more people storing their data in cloud services than ever before, Apple sells a phone that on the get-go, the first day you use it starts to back up your address books, your SMS’s, your content onto their i-cloud servers, you can do the same thing for android if you buy our cloud product, that means that your address book, your photos can be shared, your emails, your SMS’s can be saved in case you lose your phone. Cloud back up is really the only way to offset the danger of a ransomware, ransomware is a particularly malicious malware that encrypts your phone and asks you for money to give you the password to get back in, so there’s no effective way to avoid by using anti-virus software that type of a threat. However, if you’ve created a regular back up of the content of your phone or your PC, you’ll be able to roll back to that point when you were not infected, that’s the only effective means of avoiding to pay the ransom in a ransomware situation. So cloud, we see as an integral offering to security for these devices in the future and we see the market developing there for us very well.

 

Q4: Do you, Philipp, think you’ve seen a good start to 2016?

A4: Short answer is yes. Our internal forecast for the first quarter have been exceeded so in terms of our trading, we’re doing well and we’ll announce to the market for the interims how things are going. In terms of our activity, we’ve continued to invest in our products and we recently launched a Windows 10 Phone which was the first promise from the IPO so we’ve delivered on that and as Guido’s just mentioned we’ve also launched Cloud Backup. So we have broadened our proposition and it’s that much more compelling for channel partners. Defenx PLC continues to sign up new distribution deals and we will announced those to the market as and when we can and we’re bringing on new sales resources. So I think it just reiterates that we are growing using the IPO fundraising to drive this business forward.

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