Cyber security pioneer shares set fresh record
THE security concerns of UK businesses in the wake of several high profile cyber attacks this year are continuing to fuel record growth at FTSE 250 favourite Sophos Group.
Shares in the firm, whose Intercept X programme is designed to protect investors against cyber attacks, rose above their record 471p closing price in morning trading yesterday, hitting 474.5p.
Despite edging down a bit in afternoon trading, shares in Sophos have now risen 33pc since the WannaCry ransomware attack in May, which saw more than 230,000 computers in over 150 countries hit by hackers.
Sophos almost immediately predicted a pick-up in sales in the immediate aftermath of May’s attack and has since been upgraded by brokers such as HSBC, JP Morgan, Deutsche Bank and UBS.
Cyber security was thrust back into the limelight earlier this month after Reckitt Benckiser had to cut its sales forecast after being targeted by hackers, further benefiting Sophos and its peers.
Jeremy Gleeson, a fund manager at AXA Investment Managers, thinks cyber security firms could rise even further: ‘More regulated industries, such as financial services and healthcare, have historically invested heavily in their cyber security, with the big banks and drug companies being some of the biggest spenders in these kinds of security measures.
‘As all other industries become increasingly digital they’ll need similar protections and this is where we see real investment opportunities.’ Sophos finished 0.8pc, or 3.4p, ahead yesterday at 453.7p. The growth in demand for cyber security wasn’t enough to convince investors in junior cyber security firm Falanx Group from running for the hills though.
The AIM-listed firm, which provides cyber defence to blue chip firms and governments across the world, lost £1.2m over the year to March 31 and recommended against paying a final dividend.
However, the firm saw revenues grow 50pc to a record £2.7m. Furthermore, it said the ‘extremely favourable’ market for cyber security this year means it now expects to reach break even within the next 12 months.
‘Cyber and political risks continue to dominate our headlines and are highly likely to grow,’ said chairman Michael Read. Shares fell 11.3pc, or 0.88p, to 6.88p.
The FTSE 100 enjoyed a strong start to the week, up 0.26pc, or 19.11 points, to 7370.03. Schroders led the way after analysts at RBC said punters have been undervaluing the investment firm and blessed it with a double upgrade. It upgraded Schroders to ‘outperform’ from ‘sector perform’ and bumped up its price target to 3400p from 3000p.
Shares rose 2.15pc, or 68p, to a two-month high of 3225p.
In the junior market, investors in UK Oil & Gas Investments were sent on a roller-coaster ride, with shares dipping by more than 10pc in morning trading before ending the day 20pc higher.
The firm owns a 32.4pc stake in the oil well near Gatwick airport, nicknamed the ‘Gatwick Gusher’, and became notorious for claiming in 2015 that it could provide ‘multiple billion barrels’ of oil.
It was hit in morning trading after Surrey council announced that a decision on whether to allow longterm production from the Gusher will be delayed from July to August or September. But the firm turned this underperformance on its head in afternoon trading after claiming it believes to have found a 1,500ftdeep oil deposit at its nearby Broadford Bridge site. Shares were up 20.2pc, or 0.58p, at 3.42p.