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RNS Number : 8504C
Shearwater Group PLC
22 October 2020
22 October 2020
SHEARWATER GROUP PLC
("Shearwater", or the "Group")
H1 Trading update
Resilient performance and continued strategic progress
Shearwater Group plc (AIM: SWG), the organisational resilience
group, is pleased to provide an update on trading for the six
months ended 30 September 2020, ahead of the publication of the
Group's Interim Results in late November. The Group delivered a
resilient performance during the period in line with Board
expectations. The period saw Shearwater winning new customers and
benefitting from strong cash generation, improving the strength of
the balance sheet, while delivering on its strategic roadmap.
While COVID-19 has delayed client corporate decision making
processes and has resulted in the commencement of some services
contracts being deferred into the second half of the financial
year, the Group benefits from little exposure to the sectors most
impacted by COVID-19 and continues to see good levels of activity
from sectors such as financial services and in the telecoms market
as it prepares for the introduction of 5G.
Order intake during the period was in line with the prior year
and Management plan, with several multi-million pound renewals
and/or expansions with existing customers, alongside new client
wins. The weighting of orders towards the end of the period
provided for a lower level of recognised revenue, but an increased
order book of contracted forward revenue as the Group enters the
second half of the year. The Group expects to report H1 FY21
revenue of approximately GBP11m (H1 FY20: GBP16.3m) and underlying
EBITDA(1) of GBP1m (H1 FY20: GBP1m), delivering a considerably
improved underlying EBITDA margin in comparison to H1 FY20.
Improved efficiencies in the Group's Software division continue to
deliver an underlying EBITDA margin of circa 40%.
The Group has continued to strengthen its balance sheet,
generating high levels of cash, reflecting the increasing quality
of earnings resulting in unaudited gross cash as at 30 September of
GBP3.8m, having repaid outstanding legacy loans of circa GBP4.0m
since 31 March 2020. The Group continues to benefit from a n
undrawn revolving facility of GBP4.0m, positioning it well for
future opportunities.
The Group continues to make good progress towards achieving its
goal of becoming the UK's leading organisational resilience
provider, expanding its customer base and offering. Investment in
research & development has continued, broadening the Group's
portfolio in high growth market niches and further developing its
managed security service and SaaS based Secure Identity &
Access Management Platform, with new products due for launch in the
second half of the year.
The Group's executive management team remain engaged with
potential M&A targets, in line with its stated strategy, with a
healthy number of prospects progressing through the pipeline. The
Group is committed to maintaining a strict acquisition discipline,
pursuing only those opportunities which have a clear strategic fit
and which will have the ability to enhance value for all
stakeholders.
Phil Higgins, Chief Executive Officer, commented,
"The robust performance of the Group during a period of
significant uncertainty points to the strength and breadth of our
customer relationships and continued evolution of our offering as
we execute on our strategy to become the UK's leading
organisational resilience provider. Many of the world's leading
businesses rely on Shearwater to provide critical solutions and
infrastructure to help protect, recover and operate their
organisations.
"While we have seen some delays in the implementation of service
contracts and protracted client corporate decision making, we have
secured new customers and expanded our existing relationships,
while investing in product development to provide us with a wider
portfolio of offerings to take to market in the second half of the
year. In particular, we believe the opportunity for our SaaS based
Identity and Access Management platform is significant, as access
management becomes a key contributor in satisfying both security
and regulatory requirements within businesses. We continue to
progress our M&A discussions, as we seek to bring in new
offerings to the Group.
"While we remain cognisant of the ongoing disruption to
businesses globally caused by COVID-19, we have entered the second
half of the year in a strong position, with an increased order book
of contracted revenue, and are excited by the opportunity ahead of
us."
(1) 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, depreciation and amortisation
Enquiries:
Shearwater Group plc www.shearwatergroup.com
David Williams c/o Alma PR
Phil Higgins
Cenkos Securities plc - NOMAD and
Joint Broker
Max Hartley / Ben Jeynes - NOMAD
Julian Morse / Michael Johnson -
Sales +44 (0) 20 7397 8900
Berenberg - Joint Broker
Matthew Armitt / Mark Whitmore +44 (0) 20 3207 7800
Alma PR shearwater@almapr.co.uk
Susie Hudson / Caroline Forde / +44 (0) 20 3405 0205
Harriet Jackson
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
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 with offices in the US, UK
and Europe, 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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END
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