Post Close Trading Update

RNS Number : 2349W

Shearwater Group PLC

22 April 2021

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (as amended), which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018. Upon publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

22 April 2021

SHEARWATER GROUP PLC

("Shearwater", or the "Group")

Post Close Trading Update

Second half momentum; underlying EBITDA expected to be ahead of expectations

Shearwater Group plc, the organisational resilience group which provides cybersecurity, advisory and managed security services, is pleased to provide the following post close trading update for the financial year ended 31 March 2021¹.

Following a robust second half of trading, and subject to audit, the Group expects to report FY21 underlying EBITDA² in excess of £3.6 million (FY20: £3.4m), ahead of market expectations. Revenue of £31.8m was delivered in the year (FY20: £33.0m), reflecting a substantial increase in sales activity converted across the second half and strong margin improvement.

Over the past 12 months the Group's balance sheet has significantly strengthened. Cash collection also exceeded expectations, resulting in unaudited net cash³ balances of £7.3 million as at 31 March 2021 (31 March 2020: £1.4m net debt), of which £1.3m will be applied towards the settlement of deferred VAT payments relating to FY21 revenues.

Shearwater delivered very strong trading in H2 FY21 with year on year revenues for the six months up by 24% on the same period in the prior year. Revenue was driven by new client wins and several high value contract renewals. The Group noted numerous positive signs of returning business confidence, including the early commencement of the previously announced £3.6m project to monitor and provide support to next generation mobile communications which had initially been scheduled to commence in Q1 FY22.

A particular demonstration of execution on strategy was the success of the Group's cross-selling initiatives seen over the year, which contributed in excess of £500,000 of revenue in FY21. There are good opportunities to expand these projects, and many new leads, generated through cross-company introductions, remain in the pipeline.

The Group also continued to invest in innovation, further developing its SaaS based Secure Identity & Access Management Platform in the period. Demand for this offering is set to increase substantially and represents an exciting opportunity for the business as hybrid working is adopted as routine. Shearwater's platform is well positioned to take market share in this area.

The Group remains committed to making acquisitions in line with its buy, focus, grow strategy and strict acquisition criteria. It has an active pipeline of M&A opportunities.

The Group expects to publish its audited results for the financial year ended 31 March 2021 in July 2021.

Phil Higgins, Group Chief Executive Officer of Shearwater, commented:

"I am very proud of what Shearwater has achieved in the year, navigating Covid-19 related challenges and continuing to both renew contracts with existing customers and to secure new business to deliver underlying EBITDA ahead of market expectations. This performance reflects the strength of our offering and the growing demand for organisational resilience services, alongside the recovery of more normalised patterns of decision making as greater macro-economic confidence begins to return.  

"The majority of our businesses are reporting a solid increase in enquires, quotations and consulting utilisation for Q1 of the new financial year, in comparison to the same period last year. We are very encouraged by the uplift in market activity and remain confident of our ability to capitalise on the numerous opportunities for growth going forward, both organic and in the consolidation of the market. Whilst inevitably, uncertainty remains, we are well-placed to now return to driving growth in the business over the coming year and beyond, delivering value to all our stakeholders."

¹ All figures unaudited

² Underlying EBITDA is defined as profit before tax, before one off exceptional items, share based payment charges, finance charges, impairment of intangible assets, fair value adjustments to deferred consideration, contingent consideration depreciation and amortisation.

³ Net cash includes gross cash on hand less loans and drawings against RCF (excluding lease liabilities).

Enquiries:

Shearwater Group plc David Williams Phil Higgins	www.shearwatergroup.com c/o Alma PR
Cenkos Securities plc - NOMAD and Joint Broker Max Hartley / Ben Jeynes - NOMAD Julian Morse / Michael Johnson - Sales	[phone]
Berenberg - Joint Broker  Matthew Armitt / Mark Whitmore	[phone]
Alma PR Susie Hudson / Caroline Forde / Harriet Jackson	[e-mail]  [phone]

About Shearwater Group plc

Shearwater Group plc is an award-winning organisational resilience group that provides cybersecurity, advisory and managed security services to help assure and secure businesses in a connected global economy.

The Group's comprehensive cybersecurity solutions and services maintain trust between users, assure the protection of information assets and critical infrastructure, and support organisations' operational effectiveness. Its capabilities include identity and access management and data security, cybersecurity solutions and managed security services, and security governance, risk and compliance.

The Group is headquartered in the UK, serving customers across the globe who are active in a broad spectrum of industries.

Shearwater shares are listed on the London Stock Exchange's AIM under the ticker "SWG".  For more information, please visit www.shearwatergroup.com.

 

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