Shares in Sophos sank 18 per cent in early trading on Thursday, after the British cyber security group reported a slowdown in billings growth at the end of 2017.

The FTSE 250 group enjoyed bumper growth for most of last year, and lifted its forecasts in November, predicting full-year growth of between 20 and 22 per cent.

On Thursday it said billings rose 19 per cent year on year in the last three months of the year — the third quarter of its financial year — and even that weaker figure was flattered by currency movements. On a constant currency basis, growth was 14 per cent, a slowdown the company blamed on difficult comparisons after a new product launch a year ago.

Sophos maintained all its full-year forecasts and revenue growth strengthened, but investors appeared to be unimpressed, sending shares in the company down as much as 18 per cent to a five-month low. At publication time the stock was down 13.7 per cent to 537p.

Kris Hagerman, Sophos chief executive, said the company had continued to see “strong demand” over the quarter, and said customer reaction to a series of recent product launches had been “very positive”.

Comments from Northern Trust Capital Markets analyst Ameet Patel, however, suggested investors were taking the slight slowdown as an opportunity to crystallise profits after the company’s strong:

We’ve been buyers of Sophos since its IPO, principally on grounds that it offered investors pure play exposure to the appealing cyber security theme - a theme which has grown in profile during that time …while we think the long term thematic is still interesting and that Sophos remains the clean way to play that, out initial read on today’s update is that there is at least some reason to question that momentum now. For now we think it would be wise to take profits and step off the buy, as may others, with the stock up 180 per cent since IPO in June 2015 to yesterday’s closing price.

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