Security scares bring nCipher back from the brink

The former golden company of the stock exchange hit a low late last year after profits spiraled downwards to become a net loss of £949,000 and its value tumbled from a high of 365p to just 102p per share.

Despite the prevailing market conditions, founder and CEO, Alex van Someren, remains upbeat, claiming Q1 revenues of £4.5m - up from £2.2m last year - shows the market for security products is still growing.

"We've been the victim of circumstances which have affected the whole IT industry, which is a little bit frustrating," he admitted. "But it remains up to us to deliver what we have promised.

"We've proved hard work and determination are delivering the numbers," he added.

nCipher's survival plan includes moving away from its reliance on product sales, increasing its services revenue from eight per cent in Q3 2000 to 12 per cent in Q1, and upping the number of sales through resellers.

And despite previously priding itself on success in the US market, which dominated the company's corporate literature before floatation, nCipher is now focussed on increasing sales in Europe and Asia Pacific.

But van Someren is still guarded over future market predictions. "The indication are that things aren't really getting any better at the sales and revenue level," he said, "although we are seeing some cautious optimism."

nCipher's results follow hot on the heels of Dublin-based rival Baltimore, which yesterday admitted up to 18 per cent of its workforce face the axe because of increasing losses.