Falanx Group Limited - Trading Update

Cloudified Holdings

04/08/2022 07:00

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RNS Number : 8500U  Falanx Group Limited  04 August 2022

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain

 

4 August 2022

 

FALANX GROUP LIMITED

(the "Company")

Trading Update

 

Falanx Group Limited (AIM: FLX), the AIM listed provider of cyber security
services, is pleased to provide an update on its results for the year ended 31
March 2022 and the first quarter's trading to 30 June 2022.

 

Results for the Year Ended 31 March 2022 (continuing operations)

 

Revenues are expected to be c.£3.5m (2021: £3.1m) representing organic
growth of c.14%, mainly arising from improved professional services
revenues.  The Company moved to a new cyber security monitoring platform
(Triarii) during the year and this, combined with higher services utilisation,
has increased the gross margin to c.40% (2021: c.32%).  The Group expects to
record a reduced adjusted EBITDA loss than in the previous year, despite
having commenced an investment programme in the expansion of the cyber
business following the disposal of the Assynt strategic intelligence
divisions.  The audit is very largely complete, no issues have been raised,
and the audited results are expected to be announced in the middle of
September 2022.

 

Current Trading

 

The Group has been trading in line with management expectation since the start
of the current financial year. Significant planned investment has taken place
in the cyber division, particularly around sales and marketing expansion and
product innovation.  As a result of this, the business has established a far
greater pipeline than in previous years. The pipeline is not only much larger
in terms of financial value but also has a high level of advanced prospects
and, most notably, the bulk of the pipeline now comprises recurring revenue
opportunities for cyber security monitoring, including Triarii based on
Microsoft Sentinel. Falanx continues to grow its channel business and has
brought on dedicated resources to expand channel coverage. This investment has
proved effective with new partners such as ESET, where opportunities have
already been established for providing cyber security monitoring services to
their MDR and EDR clients, as well as a much higher level of activity with
longer standing partners.

 

New products have been launched for Continuous Vulnerability Scanning (CVS)
and Retained Incident Response (R-IR) and these are expected to contribute to
recurring revenues.  These complement the previously launched Falanx: Cyber
Exposure Level (f: CEL) tool which has been adopted by existing clients as
well as creating a separate revenue opportunity with new customers.

 

Balance Sheet Position

 

At 30 June 2022, the Group had cash balances of £2.7m which were in line with
budget.  The Group has a normal working capital profile, HMRC legacy support
around Covid-19 has been paid down save for a very small scheduled amount. The
Board expects these cash balances to be sufficient for its organic growth
plans.

 

Mike Read, CEO of Falanx, commented:

 

"We are very pleased with the Group's performance over the past few months
which is benefiting from the focus on growing a pure play cyber security
business. The recent investments in sales, marketing and new products has
created a considerable pipeline of new business which is more significant than
at any time in the Group's history. With a healthy balance sheet, we are able
to focus on future growth and we are optimistic about outlook of the
business."

 

Enquiries:

 Falanx Group Limited                     Via IFC

 Alex Hambro Chairman

 Mike Read CEO

 Ian Selby CFO
 WH Ireland Limited, Nomad and Broker     +44 (0) 207 220 1666

 Mike Coe / Sarah Mather

 IFC Advisory Ltd, Financial PR & IR      +44 (0) 203 934 6630

 Graham Herring / Zach Cohen

 

 

About Falanx

Falanx Group Limited, is a cyber defence provider providing enterprise class
defensive and offensive security solutions to SME. For further
information: http://www.falanx.com/ (http://www.falanx.com/)

 

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