Irish founded e-commerce security company, Baltimore Technologies, has announced plans to seek a listing on the US Nasdaq stock exchange.
It is understood, also, that the company hopes to raise between $100 million (€96.3 million) and $150 million (€144.5 million) in additional capital. Initially European investors will be offered the option to subscribe for the new shares and some may also be issued in the US.
Baltimore is already quoted on the London Stock Exchange, and investors reacted positively to yesterday's news, which coincided with interim results which were ahead of expectations. Yesterday's share price closed at 1290 pence, up 3.5 per cent on Friday's close of 1247.5 pence. The company now has a market capitalisation of nearly $700 million.
Recent weeks have seen a steady rise in Baltimore stock, spurred in July by the announcement it had secured a $30 million contract in the US to supply security software for Internet transactions to an international banking consortium, Identrus. Overnight its share price rose 12 per cent.
Since then US investor interest has been whetted by Baltimore's aggressive efforts to take a share of the competitive US market for encryption and security technology. There was also heavy trading last week in advance of interim results for the six months to June 30th.
Over the period Baltimore recorded a loss before tax of £16 million (€20.3 million), up from £324,000 over the same six months last year.
Despite the enormity of its losses, Baltimore is still viewed as a favourable buy, and yesterday Dolmen Butler Briscoe issued a long term buy recommendation on the stock.
According to Baltimore chief executive Mr Fran Rooney: "Nobody is concerned about our losses, the company is going very much according to plans outlined earlier in the year. Our costs are in line with budget, we're investing wisely, and investors are bullish about how they view our performance." Baltimore revenues came in slightly ahead of expectations, running at £9.8 million compared with £8 million last year. Gross profits for the year-on-year period have also increased from £4 million to £5 million.
According to Mr Rooney, the continuing losses fall into line with Baltimore's aggressive sales and marketing policy, which will account for 85 per cent of sales this year.
Most of its revenues are going into the company's globalisation strategy, and in the last six months it has opened 10 new sales offices in the US, along with offices in Spain, Germany and Canada.
The company has also been hit by goodwill write-offs of £55 million over a five year period, combined with depreciation costs amounting to around £13 million annually.
Baltimore is in the process of changing its revenue mix from being predominantly low margin hardware based, to a software focus returning higher margins.
Earlier this year, it set the target of making software products account for 60 per cent of sales by 2001. From a start of around 10 per cent late last year, this figure now stands at around 33 per cent.
By 2001 Baltimore predicts the US market will account for 25 per cent of its revenues. Its chief competitors in that market, Entrust Technologies of Texas, and Verisign of California, are valued at over $1.6 billion each. Entrust was first to record a profit in the first quarter of this year, while Verisign's losses ran at just $2.1 million at the end of June.
