Endace, the New-Zealand registered network security venture that claims to have a market-leading technology, floated on AIM in June, raising £8m of new money at 162p. The first Kiwi concern to join AIM boasts technology that helps companies and governments protect themselves against the rising tide of internet viruses and hackers. Founded back in 2001, Endace designs and sells specialised network interface devices and systems for a market growing on rising volume and sophistication of web-related crime.

Endace, which sports several US government security clients among its customers, as well as a raft of telecommunications and ISP clients, recently cheered followers with a bullish first half update to September. Chief executive Selwyn Pellet said interim sales hit forecasts, and reported a burgeoning order book. The great news was that higher than average margins and tight cost controls mean the company now expects to report modest pre-exceptional pre-tax profits for the half, instead of the losses originally budgeted.

Pellet also flagged up sales increases in all regions, with Europe performing especially well, although he did point out that ‘lumpy revenue cycles will remain a reality’. Endace reports interim figures in mid-November and is a second-half weighted concern, so the best months of the year are still to come.

Analyst Simon Strong at Panmure Gordon forecasts a rise in sales from $6.5m to $13m for the current year to March, with EBITDA growing from $1.5m to $2.3m. Barriers to entry in this growth market are high, and the shares have speculative appeal ahead of results.

Endace	AIM	£47.92m	320.00p	0.00p
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