TIDMNARF
RNS Number : 1179G
Narf Industries PLC
14 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
14 July 2023
NARF INDUSTRIES PLC
LIFTING OF SUSPENSION OF SHARE TRADING
Narf Industries plc ("Narf", the "Company", or the "Group"),
(LSE: 'NARF')(OTCQB: NFIN.F), the cybersecurity group specialising
in high-end threat intelligence and critical infrastructure
security, today announces that, following publication of the
audited financial statements for the year ended 31 December 2022
("FY2022"), suspension will be lifted and trading in the Ordinary
shares of the Company on the Official List will commence later
today.
Below is the Chairman's statement extracted from the recently
published Audited Financial Statements:
Dear Shareholder,
As the recently appointed Executive Chairman, this statement
offers me the opportunity to share your Company's accomplishments
while acknowledging the challenges transitioning from a private and
entrepreneurial led venture to the main operating business of an
LSE listed company.
Accomplishment and Goals
It has been a year of significant growth and development within
the Group. Our committed team of 15 research and software
developers led by our CEO, Steve Bassi, delivered record breaking
year-end contracted backlog of $10.4 million. It speaks to the
trust and confidence government entities place in our highly
specialized team and underscores its strong reputation as an
innovative and reliable partner.
The backlog is 4x our 2022 revenue of $2.5 million. The increase
in government contract backlog translates into a sustainable
revenue stream for our Group. These contracts provide a stable and
predictable source of income, enabling us to plan and execute
business strategies with confidence.
From this backlog alone, the Group forecast $5.9m revenue in
2023, delivering 130% year on year ("YOY") growth (up from 30%
growth in 2022). A significant decrease in expenses is also
targeted this year. As we transition from an acquisition vehicle to
focus on our core operations, we are expecting operating expenses
to drop by over 40% ($1.4 million) in 2023.
This combination of growing revenues and operational
efficiencies help position the Company to achieve break-even EBITDA
for 2023. This compares to a $2.6m operating loss in 2022. The plan
looks to accomplish this performance financed by internal cash
generation and current credit line facilities.
In summary, our team in 2023 looks to execute an invaluable,
high growth, fiscally responsible Company that protects and builds
shareholder value and confidence. From this foundation, we plan to
aggressively grow our government revenue, a market we are well
positioned to scale and expand. The attractive net margins, along
with our innovative government funded R&D work, can fuel our
intellectual property (IP) commercialisation targeted to
multi-billion dollar cybersecurity market segments.
I'd like to express my appreciation to the team for their work
ethic that delivered this outstanding business performance to date.
I'd like to thank our customers that acknowledge our worth through
repetitive contract awards.
Fiscal Year 2022 Audit
This is the first financial reporting period for which
consolidated financial statements, incorporating the businesses
acquired in March 2022 (see Note 8 to the Financial Statements),
are subject to International Finance Reporting Standards
(IFRS).
This administrative burden introduced by IFRS presented a
significant hurdle for a small team of 15 research and software
developers busy meeting contract deadlines, generating revenue and
cash flow. Previously, the private businesses produced records and
internal documents only needed for servicing its contracts and
primarily for tax purposes. This lack of infrastructure and
resources caused the Company to miss its 30 April 2023 deadline and
led to suspension of trading in its shares.
Today we've announced the completion of the audit expect the
trading suspension will be lifted within a matter of days. However,
not without accepting and acknowledging significant auditor
disclaimers.
I've taken this decision to accept the auditor's disclaimers
now. It's become evident that resolution will require more time and
extending the trading suspension of our shares would unfairly
impact our shareholders, limiting their ability to engage with the
market and potentially eroding investor confidence.
I want to assure you that this disclaimer of opinion does not
diminish the value of the team's achievement or the underlying
strength of our business. We are committed to resolving these
issues and bringing the Company's consolidated financial reporting
practices up to standards.
There are several matters linked to the disclaimer that need
resolution, but it's our inability to date to provide auditors
access to a sensitive contract (and all materials associated with
that contract), and our estimated timeline for resolution, that's
most influenced my decision.
This contract accounts for about 50% of our reported 2022
revenue with terms that state disclosing the name of the customer,
their address, or the nature of the work to restricted parties, is
a basis for termination. We are navigating this situation carefully
and executing a plan to resolve this matter over the course of the
next quarter in the interest of all parties.
As you read this annual report and the Company's accounts,
please be aware any financial figures presented are subject to
adjustment for overstatement or understatement as we work with
auditors to confirm the appropriate accounting treatment. The
Company believes it has taken a conservative approach in its
presentation of the accounts, for example applying a revenue
recognition that errs on the side of understatement.
Period of Transition
This year's audit circumstance speaks to the challenges we face
managing record revenue growth while building the infrastructure
required of a publicly reporting entity. While growth is a positive
indicator, it requires us to remain agile and adapt our
administrative systems to meet the evolving needs of our expanding
organisation.
While establishing the necessary administrative and financial
infrastructure during this transitional phase is important, it's
equally vital to instill a shared understanding among our team that
effective governance and responsible management extend beyond mere
structures and processes. For these reasons, your CEO strengthened
the Board and executive team in late April 2023, with my
appointment as Executive Chairman and appointment of our CFO.
Although posing short-term challenges, we recognise the
long-term benefit of investing now to improve the quality of our
executive leadership, financial reporting, and business execution
to instill confidence in our stakeholders and facilitating better
analysis and decision-making.
In respect to our most pressing challenge, our team, now
resourced with a new CFO, will continue to work diligently, and
resolve all matters.
Looking Forward
I am privileged to lead the Board, and as Executive Chairman,
join the CEO and his team to actively develop, lead, and execute
strategies to grow the business. I would like to express my
gratitude to our shareholders for their understanding during this
initial, difficult past few months.
Here's what to expect in the next 6 months:
-- Scale and expand our government business. We have the
potential to turbo-charge our growth, in a market we already know,
with a proven competitive position. Our team is already fast at
work in driving success and identifying 18, 36, and 54 month
strategic growth goals.
-- Unlock the value of our IP with innovative and efficient go to market strategies.
-- Build an experienced and capable Board. We look to align
strategic objectives with specific areas of expertise, source
qualified candidates, and appoint new members over the course of
the year.
-- Strengthen our internal and external financial reporting. A solid foundation to support our decision-making processes, protect the interests of our shareholders, and maintain the trust of our stakeholders is paramount. Included is a resolution of our auditor's disclaimers and opinion.
-- Maximize shareholder value. We are committed to engaging with
the investment community to ensure our accomplishments and
strategies are reflected in the valuation of our Company.
Thank you all.
John Herring
Executive Chairman
S
For further information on the Group please visit
www.narfgroup.com or contact:
John Herring NARF Tel: +44 (0) 20 3468
2212
Catherine Leftley/Paul St Brides Partners narf@stbridespartners.co.uk
Dulieu/Isabel de Salis
------------------- ---------------------------
Peter Krens Tennyson Securities Tel: +44 (0)207 186 9030
------------------- ---------------------------
About NARF Industries plc
Narf Industries (LSE: NARF)(OTCQB: NFIN.F) is a US based cyber
security group specialising in high-end threat intelligence with a
focus on critical infrastructure. The Group leads commissioned
cyber security R&D and is commercialising a portfolio of
products including TIGR that can be used by utilities and cyber
first responders to restore power to electric grids and protecting
other key infrastructure that have suffered a cyber-attack. The
Group aims to further strengthen its portfolio organically and via
acquisition; its team of highly qualified cyber security experts is
well placed to identify opportunities.
Important notice
The content of this announcement has not been approved by an
authorised person within the meaning of the Financial Services and
Markets Act 2000 (FSMA). This announcement has been issued by and
is the sole responsibility of the Company. The information in this
announcement is subject to change. This announcement is not an
offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the Securities Act),
and may not be offered or sold, directly or indirectly, in or into
the United States, except pursuant to an applicable exemption from
registration. No public offering of securities is being made in the
United States. This announcement is not for release, publication or
distribution, directly or indirectly, in or into the United States,
Australia, Canada, the Republic of South Africa, Japan or any
jurisdiction where to do so might constitute a violation of local
securities laws or regulations (a Prohibited Jurisdiction). This
announcement and the information contained herein are not for
release, publication or distribution, directly or indirectly, to
persons in a Prohibited Jurisdiction unless permitted pursuant to
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END
SRSRIMJTMTTBBMJ
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July 14, 2023 09:26 ET (13:26 GMT)
Narf Industries (LSE:NARF)
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