COVID-19 Response

RNS Number : 4933I

GRC International Group PLC

02 April 2020

 

GRC International Group PLC ("GRC" or the "Group") - COVID-19 Response

Operations

· Business Continuity: GRC has executed its UK business continuity plan in response to the UK Government's instruction that where possible and as far they are able to, all employees should work from home. The Company is able to confirm that by 25 March all our staff across the Group in the UK, USA and EU were successfully working from home and carrying out business as usual. Encouragingly, to date this approach has meant that the Group has suffered minimal disruption as a result of staff having to self-isolate.

· Customer Focus: During March, we successfully shifted almost all of our client service delivery across our continuity, security and privacy compliance services worldwide, online. With very minor exceptions, we are now able to meet all our client's delivery needs - including classroom training, consultancy, audit, testing and legal compliance services, on a remote basis to clients across the world.

· Customer Demand: After a strong start to March, demand dropped slightly during the middle period of the month while clients focused on the transition to remote working.

We have had a strong finish to the period. In our training business, there have been more paying delegates attend (now all online) courses this March than in any month since June 2018, at the tail end of the GDPR peak. Despite the ongoing disruption COVID-19 has imposed on our clients, we were successful in delivering nearly 100% of our pre-contracted work in all our businesses.

· Privacy Management: While executing our continuity plan and completing our pivot to comprehensive online service delivery, we were also successfully audited against ISO/IEC 27701, the new privacy management extension to ISO/IEC 27001. It is another standard for which we provide training and implementation services.

· Product Innovation and Market Agility:  A key strength of the Group, in the last fortnight, we launched 10 new products, specifically tailored for the needs of clients at this challenging time. These include policy document packs for remote workers and for business continuity, as well as security testing, anti-phishing training, and online staff awareness training for remote workers - which is available internationally, deployable on desktop as well as mobile devices, on a 2-week free trial basis from 2 April.

Market

· In the current highly volatile climate, it is the Board's current view that security, continuity and privacy compliance projects will continue to be critical for clients in all those sectors that have ongoing business operations.

While some clients have understandably de-prioritised security and compliance projects while they deal with their more pressing continuity challenges, other clients recognise the level of risk in the changing environment and are prioritising security, continuity and compliance, with  the Company just securing two substantial contracts, with  an aggregate £255k revenue  in FY21 to 31 March 2021.

Finances

· The Group successfully recapitalised the Company in February, raising approximately £3.5 million (net of expenses), resolving the cash element of the deferred consideration (£1.6m) now paid to the vendors of DQM and repaying a bank borrowing facility (£0.5m). The remainder of the funds raised provided additional working capital for the Group to strengthen the overall balance sheet position. 

· Cost management is already very tight. We are continuing to take action to reduce costs and preserve cash and, where possible, will take advantage of emerging Government support schemes in all of the geographies in which we operate. We have made savings in marketing and in property and training venue costs and continue to rationalise IT infrastructure, having extended the hiring freeze and are continuing to see payroll costs reduce.

In particular, early progress on the integration of DQM with the rest of the GRC group has enabled one of the founder directors to take early retirement, and the other to reduce workload by 60%; and these savings (c. £0.2m annualised) are effective from 1 April.

Next Update

The Board expects to update the market on trading for the year to 31 March 2020 around the beginning of May 2020 and will provide a further CV19 update if necessary at that time.

Enquiries

GRC International Group plc Alan Calder (CEO) Chris Hartshorne (Finance Director)	www.grci.group 033 3800 7000
Grant Thornton UK LLP (Nomad) Philip Secrett / Jen Clarke / Ben Roberts / Seamus Fricker	020 7383 5100
Dowgate Capital Limited (Broker) James Serjeant	020 3903 7717

 

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