Interim Results
27/09/2022 07:00
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RNS Number : 7102A ECSC Group PLC 27 September 2022
27 September 2022
ECSC Group plc
('ECSC' or the 'Company' or the 'Group')
Unaudited interim results for the six months ended 30 June 2022
ECSC Group plc (AIM: ECSC), the provider of cyber security services, announces
its unaudited interim results for the six months ended 30 June 2022.
Financial Highlights
· MDR order book up 30% to £2.9m (31 December 2021: £2.2m)
· Group revenue of £2.77m (H1 2021: £3.01m)
· Assurance division (testing, standards and certification services)
revenue of £1.48m (H1 2021: £1.49m)
Post-Period Highlights
· Mid-Sept 2022 Assurance booking level up 30% upon the year-to-date
mid-month average
· Appointment of new CEO
· Return to a level of MDR new service wins comparable to pre-COVID
levels
· Partnership with Securonix, joining their global Managed Service
Provider (MSP) programme
Matthew Briggs, Chief Executive Officer of ECSC, commented:
"H1 was a challenging period, however, we have a firm handle on what caused
the under performance. Some changes have already been implemented. With
several more tactical and strategic initiatives now identified and being
executed, I am expecting to see improvements in H2 with further improvements
during 2023."
Enquiries:
ECSC Group plc +44 (0) 1274 736 223
Ian Mann (Executive Chairman)
Matthew Briggs (Chief Executive Officer)
Allenby Capital (NOMAD and Broker) +44 (0) 203 3285 656
David Hart
Piers Shimwell
Notes to Editors:
Founded in 2000, ECSC Group plc (AIM: ECSC) is the UK's longest running
full-service cyber security service provider. With an extensive range of
in-house developed proprietary technologies, including advanced Artificial
Intelligence (AI) systems, ECSC provides expert security breach prevention and
advisory support to organisations across all sectors.
ECSC operates from two Security Operations Centres (SOCs): one in Yorkshire,
UK, and the other in Brisbane, Australia. ECSC offers flexible 24/7/365 cyber
security monitoring, detection, and response support to its clients, either as
a fully managed service or to enhance an organisation's existing cyber
security systems. In addition, ECSC's Assurance division provides guidance,
certification to industry standards, and extensive testing services to allow
organisations to assess their cyber security protection.
ECSC is led by a highly experienced senior management team with over 80 years'
combined experience within the company and has delivered consecutive organic
growth for the last 20 years.
The Company's broad client base ranges from e-commerce start-ups to global
blue-chip organisations, including 10% of the FTSE 100.
For more information, please visit the following: https://investor.ecsc.co.uk/
(https://investor.ecsc.co.uk/)
Chairman's Statement
Following fresh challenges in H1, I am pleased to see how the group has
responded, as reflected in the recent MDR recurring revenue wins and the
current level of Assurance consulting bookings. Increases of 30% in both MDR
order book and current Assurance booking levels illustrate the up-turn we are
seeing on a range of internal KPIs.
There is now strong evidence that post COVID-19, cyber security has returned
as the number one priority for most organisational boards. ECSC is the ideal
partner to advise and secure these organisations.
I am delighted with the recent appointment of Matthew Briggs as our new Chief
Executive Officer (CEO). He brings a wealth of senior commercial experience,
placing him in an ideal position to lead us through the next stage of our
development. As a previous client of ECSC, with a good understanding of our
services, he has worked rapidly to understand the opportunities for the group
and brought with him the highest expectations for the whole team.
We intend to fully report the current, and planned, board structure in our
annual report. However, in line with QCA guidance, my position as Chairman
will be temporary, and reviewed in light of future non-executive appointments.
On behalf of the Board, I would like to thank all of our clients, staff,
partners and wider stakeholders for their continued support.
Ian Mann
Executive Chairman
27 September 2022
Chief Executive Officer's Statement
Having commenced the CEO role in August this year, I am still identifying the
mission critical tasks which need to be executed along with their sequencing.
That said, our overall focus on profitable, sustainable growth remains
unaltered and very much central to our strategic intentions.
It is clear from what has been observed so far, and what I know of the market,
that there are significant opportunities for ECSC. And whilst at a macro
level, there may be some headwinds from inflation, cost of living, salary
costs and interest rate rises, history tells us that the cyber security
industry is resilient compared to many other sectors.
Some of the areas which will be getting my attention over the coming weeks and
months include re-energising the culture of our people and ensuring they feel
empowered to deliver very clearly defined targets and objectives. We will be
implementing enhanced KPIs and reporting to ensure full performance
transparency exists across the business. We will also be co-creating our 3
year business strategy. Essentially, this will produce a roadmap for how we
will stay relevant and appealing so we deliver P&L growth over the coming
years, whilst also ensuring we don't get distracted from business as usual
activities.
Two particular aspects which have struck me since joining are that firstly,
the business has been very inward looking. In turn, understanding a client's
wants and needs and competitor intelligence is lacking. However, with the
combination of Ian's new role and my connections we can remedy this in
relativity short order. Secondly, ECSC has many significant opportunities to
build different partner relationships, moving away from IT resellers towards
like minded 'trusted advisor' businesses. From a standing start since I
joined, we already have over 25 conversations in play many of which are with
blue chip brand's with extensive client banks potentially interested in
offering our services to their clients.
Whilst revenue growth during 2022 will not have been at a level the Board
would have wished, one of the overwhelming reasons for me joining ECSC was the
opportunity for significant profitable growth, and the early signs are
indicating that this is within our gift.
Key Performance Indicators
The following Key Performance Indicators:
Jun Dec Jun
Performance Rationale 2022 2021 2021
Indicator (interim) (full year) (interim)
Revenue Growth* Measurement of the success of the organic growth strategy -8% 8% 15%
Managed Detection and Response Recurring Revenue Growth* Visibility of the success of increasing the percentage of revenue from
long-term recurring revenues
-17% 7% 12%
Managed Detection and Response Recurring Revenue Proportion Visibility of the success of increasing the percentage of revenue from
long-term recurring revenues
39% 42% 44%
Managed Detection and Response Order Book Combined measurement of new client contracts together with renewals of £2.9m £2.2m £2.7m
existing client contracts
Managed Detection and Response Gross Margin Delivery efficiency measurement 46% 61% 64%
Assurance Repeat Revenue Quasi-recurring from longer-term consulting clients 87% 81% 83%
Assurance Gross Margin Delivery efficiency measurement 58% 63% 61%
Research and Development (percentage of Group revenue) Investment in future cyber technologies, service enhancements and intellectual 18% 15% 16%
property
* Percentage change when compared to the prior comparable period.
Matthew Briggs
Chief Executive Officer
27 September 2022
Financial Review
Principal Activities
The principal activity of the Group during the period continued to be the
provision of professional cyber security services, including Assurance,
Managed Detection and Response Services and the sale of Vendor Products.
Unaudited Unaudited Audited
6 months 6 months Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Revenue
Assurance 1,476 1,489 3,123
MDR 1,218 1,450 2,886
Vendor Products 45 49 93
Other 31 19 42
2,770 3,007 6,144
Gross Profit
Assurance 860 905 1,965
MDR 561 932 1,757
Vendor Products 7 8 15
Other (33) (29) (63)
1,395 1,816 3,674
Adjusted EBITDA*
Other Income 140 117 282
Sales & Marketing Costs (859) (1,025) (2,018)
Administration Expenses (1,040) (889) (1,773)
(364) 19 165
EBITDA**
Share Based Payments (24) (69) (100)
Exceptional Items (137) (26) (145)
(525) (76) (80)
Depreciation and Amortisation (197) (206) (400)
Adjusted Operating Loss* (561) (187) (235)
Operating Loss (722) (282) (480)
* Adjusted Operating Loss and Adjusted EBITDA excludes one-off charges and
share based charges
** EBITDA is defined as Earnings before Interest, Tax, Depreciation and
Amortisation
Revenue & Organic Growth
Total revenue in the period ended 30 June 2022 was £2.77m, down 8% on the
comparable prior period (revenue in the six months ended 30 June 2021 was
£3.01m). Within this, Assurance revenue was down 1% to £1.48m (June 2021:
£1.49m).
Managed Detection and Response division revenue was down by 16% to £1.22m
(June 2021: £1.45m). This was due to MDR pipeline issues caused by COVID
which are now resolved. Within this division, Incident Response revenues
decreased to £0.09m (June 2021: £0.14m) during the period.
Vendor Products revenue remained at £0.05m, (June 2021: £0.05m), and remains
a small part of ECSC's business, contributing only 2% of revenues.
Margin Generation
Gross Profit in the period was £1.40m representing a 50% gross margin (prior
year interim period: £1.82m representing a 60% gross margin).
Assurance margin fell to 58% in the period (prior year interim period: 61%).
This was due to a 5% increase in costs over the prior period.
Managed Detection and Response margin fell to 46% (prior year interim period:
64%) due to a 16% decrease in revenue and a 27% increase in costs due to wage
inflation and additional headcount in the MDR division during the period.
EBITDA & Operating Loss
Adjusted EBITDA for the period, which excludes one-off charges and share based
charges, was a loss of £0.36m (June 2021: Adjusted EBITDA profit of £0.02m).
EBITDA in the period was a loss of £0.53m (June 2021: EBITDA loss of
£0.08m).
Adjusted Operating loss in the period was £0.56m (June 2021: Adjusted
Operating loss of £0.19m). The Operating loss in the period was £0.72m (June
2021: Operating loss of £0.28m).
Cash Flow
Cash and cash equivalents decreased by £0.87m to £0.30m as at 30 June 2022,
primarily due to wage inflation pressures and reduced revenues compared to the
prior year.
During H1 2022, the Group took action to reduce cash burn by cost control,
resulting in costs of over £500k per year being removed from the business.
The Group will continue to prioritise cash management and closely monitor this
to ensure that the Group has adequate liquidity to meet all of its financial
commitments as they arise. The budget figures are closely monitored against
actuals on a monthly basis. Variances that may arise are discussed at Board
level on a monthly basis. The Directors also consider a sensitivity analysis
based on lower revenue growth and margins achieved and have formulated
appropriate contingency plans which enable the Group to preserve its financial
resources.
Gemma Basharan
Chief Financial Officer
27 September 2022
Consolidated Statement of Comprehensive Income
For the 6 months ended 30 June 2022
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note £'000 £'000 £'000
Revenue 5 2,770 3,007 6,144
Cost of Sales (1,375) (1,191) (2,470)
Gross Profit 1,395 1,816 3,674
Other Income 6 140 117 282
Sales & Marketing Costs (859) (1,025) (2,018)
Administration Expenses (1,398) (1,190) (2,418)
Operating Loss before Exceptional Items (561) (187) (235)
Share Based Payments 24 69 100
Exceptional Items 137 26 145
Operating Loss (722) (282) (480)
Finance Cost (62) (20) (42)
Loss before Taxation (784) (302) (522)
Taxation Credit/ (Charge) 69 (21) (5)
Loss for the Period (715) (323) (527)
Other Comprehensive Income - - -
Total Comprehensive Loss for the Period (715) (323) (527)
Attributed to Equity Holders of the Company
Loss Earnings per Share pence pence pence
Basic Loss per Share 7 (7.1) (3.2) (5.3)
Diluted Loss per Share 7 (7.1) (3.2) (5.3)
Consolidated Statement of Financial Position
As at 30 June 2022
Unaudited Unaudited Audited
6 months ended 6 months ended 6 months ended
30 June 2022 30 June 2021 31 December 2021
Note £'000 £'000 £'000
ASSETS
Non-current Assets
Intangible Assets 8 521 489 483
Property, Plant and Equipment 76 103 88
Right of use Assets 571 677 613
Deferred Tax Asset 224 139 147
Total Non-current Assets 1,392 1,408 1,331
Current Assets
Inventory 13 9 9
Trade and Other Receivables 643 719 675
Corporation Tax Recoverable 429 333 289
Cash and Cash Equivalents 9 299 591 1,168
Total Current Assets 1,384 1,652 2,141
TOTAL ASSETS 2,776 3,060 3,472
LIABILITIES
Current Liabilities
Trade and Other Payables (1,523) (1,799) (1,489)
Borrowings (189) - (105)
Lease Liabilities (104) (119) (107)
Total Current Liabilities (1,816) (1,918) (1,701)
Non-current Liabilities
Deferred Tax Liability (132) (132) (124)
Borrowings (770) - (858)
Lease Liabilities (528) (616) (568)
Total Non-current Liabilities (1,430) (748) (1,550)
TOTAL LIABILITIES (3,246) (2,666) (3,251)
NET (LIABILITIES) /ASSETS (470) 394 221
EQUITY
Equity attributable to Owners of the Parent:
Share Capital 100 100 100
Share Premium Account - 6,098 -
Share Option Reserve 516 461 492
Retained Earnings (1,086) (6,265) (371)
TOTAL EQUITY (470) 394 221
Consolidated Statement of Changes in Equity
For the 6 months ended 30 June 2022
Share Share
Share Premium Option Retained
Capital Account Reserve Earnings Total
£'000 £'000 £'000 £'000 £'000
Balance as at 31 December 2020 100 6,098 392 (5,942) 648
Loss and Total Comprehensive:
Total comprehensive loss for the year - - - (527) (527)
Transactions with shareholders
Share Based Payments - - 100 - 100
Reduction of capital (6,098) 6,098 -
Balance as at 31 December 2021 100 - 492 (371) 221
Loss and Total Comprehensive:
Total comprehensive loss for the year - - - (715) (715)
Transactions with shareholders
Share Based Payments - - 24 - 24
Balance as at 30 June 2022 100 - 516 (1,086) (470)
Consolidated Cash Flow Statement
For the 6 months ended 30 June 2022
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note £'000 £'000 £'000
Cash Flow from Operating Activities
Loss before Taxation (784) (302) (522)
Adjustment for:
Amortisation of Intangibles 93 79 166
Depreciation of right-of use asset 66 80 143
Depreciation of Property, Plant and Equipment 38 47 91
Loss/ (gain) on Disposal of Asset - 4 4
Finance Costs 62 20 42
Share Based Payment 24 69 100
Cash (used in)/generated from Operating Activities
Before changes in Working Capital (501) (3) 24
Change in Inventory (4) - -
Change in Trade and Other Receivables (108) (25) (146)
Change in Trade and Other Payables 34 (286) (624)
Cash (used in)/generated from Operating Activities (579) (314) (746)
Corporation Tax received - - 209
Net Cash Flow (used in)/generated from Cash flow
from investing activities (579) (314) (537)
Acquisition of Property, Plant and Equipment (27) (5) (34)
Development Costs Capitalised (131) (113) (194)
Net Cash Flow used in Investing Activities (158) (118) (228)
Cash flow from financing activities
Principal paid on lease liabilities (80) (97) (172)
Interest paid on loans and borrowings (52) (2) (2)
Proceeds from issue of loan - - 985
Net Cash (used in)/generated from Financing Activities (132) (99) 811
Net increase/ (decrease) in Cash & Cash Equivalents (869) (531) 46
Cash & Cash Equivalents at beginning of period 1,168 1,122 1,122
Cash & Cash Equivalents at end of period 299 591 1,168
Notes to the Financial Statements
For the 6 months ended 30 June 2022
1. Corporate Information
ECSC Group plc is incorporated in England and Wales and quoted on the London
Stock Exchange's Alternative Investment Market (AIM: ECSC). Further copies of
these financial statements will be available at the Company's registered
office: 28 Campus Road, Listerhills Science Park, Bradford, West Yorkshire,
BD7 1HR. These condensed consolidated interim financial statements as at and
for the six months ended 30 June 2022 were approved by the Board of Directors
on 26 September 2022.
2. General Information
These financial statements may contain certain statements about the future
outlook of ECSC Group plc. Although the Directors believe their expectations
are based on reasonable assumptions, any statements about future outlook may
be influenced by factors that could cause actual outcomes and results to be
materially different.
3. Basis of Preparation
These interim financial statements for the period ended 30 June 2022 have been
prepared in accordance with UK adopted international accounting standards
(collectively 'UKIAS) and as applied in accordance with the provisions of the
Companies Act 2006.
The financial statements for the period ended 30 June 2022 (and comparative)
have been prepared on a consolidated basis. The consolidated financial
statements present the results of the Company and its subsidiaries ('the
Group') as if they formed a single entity. The financial statements of the
Group and Company are both prepared in accordance with UKIAS. They do not
include all of the information required for a complete set of UK IFRS
financial statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an understanding of
changes in the Group's financial position and performance since the last
annual statements.
Alternative performance measures (APM)
In the reporting of financial information, the Directors have adopted the APM
'Adjusted EBITDA' (APMs were previously termed 'Non-GAAP measures'), which is
not defined or specified under International Financial Reporting Standards
(IFRS).
This measure is not defined by IFRS and therefore may not be directly
comparable with other companies' APMs, including those in the Group's
industry. APMs should be considered in addition to, and are not intended to be
a substitute for, or superior to, IFRS measurements.
Purpose
The Directors believe that this APM assists in providing additional useful
information on the underlying trends, performance and position of the Group.
This APM is also used to enhance the comparability of information between
reporting periods and business units, by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid the user in
understanding the Group's performance.
Consequently, APMs are used by the Directors and management for performance
analysis, planning, reporting and incentive setting purposes and this remains
consistent with the prior year. Adjusted APMs are used by the Group in order
to understand underlying performance and exclude items which distort
compatibility, as well as being consistent with public broker forecasts and
measures (see note 10).
The financial statements have been presented in thousands of Pounds Sterling
(£'000, GBP) as this is the currency of the primary economic environment that
the Company operates in.
4. Accounting Policies
The principal accounting policies applied in the preparation of the financial
statements are set out below. These policies have been consistently applied to
all periods presented, unless otherwise stated.
4.1 Basis of Accounting
The financial statements have been prepared on the historical cost basis
except as stated.
4.2 Going Concern
The Directors have reviewed whether the Group has adequate resources to
continue in operational existence for the foreseeable future. In conducting
this review, the Directors have considered a range of factors, including the
market prospects for cyber security services, client relationships and
dependency, supplier relationships and dependency, actual or potential
litigation, staff retention and reliance, relationships with HMRC and
regulators, financing arrangements, historic trading and cash flow
performance, current trading and cash flow performance, and future trading and
cash flow expectations.
The budget figures continue to be closely monitored against actuals on a
monthly basis. Variances that may arise are discussed a Board level on a
monthly basis during a review of the monthly numbers. In the event that this
revenue and cost performance is not achieved, the Directors have also
considered a sensitivity analysis based on lower revenue growth and have
formulated contingency plans for this scenario, which enable the Group to
preserve its financial resources.
During H1 the Group took action to reduce cash burn by cost control, costs of
over £500k were removed from the business.
As at 30 June 2022, the Group had cash and cash equivalents of £0.30m (2021:
£0.59m) and achieved an Adjusted EBITDA loss of £0.36m (2021: profit of
£0.02m) and an operating loss of £0.72m (2021: £0.28m).
Based on this review, the Directors have concluded that the Group has adequate
resources to meet its liabilities as they fall due and continue in operational
existence for the foreseeable future, which is considered to be at least the
next 12 months. Consequently, the Directors have adopted the going concern
basis in preparing the interim financial statements.
4.3 Revenue Recognition
The core principle is that revenue should only be recognised as the client
receives the benefit of the goods or services provided under a commercial
contract, in an amount that reflects the consideration to which the provider
expects to be entitled for the transfer of the goods or services.
Performance obligations and timing of revenue recognition
Revenue comprises the sales value of goods and services supplied during the
year, exclusive of Value Added Tax and trade discounts. Revenue from the
provision of Consulting services is recognised as services are rendered, based
on the contracted daily billing rate and the number of days delivered during
the period.
Revenue from Pre-paid contracts are deferred in the balance sheet and
recognised on utilisation of service by the client. Pre-paid revenue is
included within Assurance in note 5. Revenue from MDR contracts includes:
Hardware - hardware revenue is recognised on delivery and is included within
other revenue as set out in note 5. This is when control of hardware passes to
the customer.
Device build - Device build revenue is deferred and recognised on a straight
line basis over the term of the contract.
Licensing - deferred and recognised on a straight line basis over the invoice
period, due to the performance obligation not being considered distinct from
management and monitoring performance obligation.
Management and monitoring - deferred and recognised on a straight line basis
over the invoice period.
Performance obligations and timing of revenue recognition
Management and monitoring - deferred and recognised on a straight line basis
over the invoice period.
Revenue from the sale of products (vendor) is recognised when control passes
to the customer, which is considered to occur when the software or hardware
product has been delivered to the client.
Determining the transaction price
The Group's revenue is derived from fixed price contracts and therefore the
amount of revenues to be earned from each contract is determined by reference
to those fixed prices.
Costs of obtaining long-term contracts and costs of fulfilling contracts
Commissions paid to sales staff for work in obtaining Managed Service
contracts are prepaid and amortised over the terms of the contract on a
straight line basis.
Commissions paid to sales staff for work in obtaining the Prepaid Consultancy
contracts are recognised in the month of invoice.
These costs are recognised in the Consolidated Statement of Comprehensive
Income within Sales & Marketing costs.
Contract Balances
Contract Contract Contract Contract
Assets Assets Liabilities Liabilities
30 June 31 December 30 June 31 December
2022 2021 2022 2021
£'000 £'000 £'000 £'000
At 1 January 20 34 (683) (878)
Commission expensed during the period (20) (91) - -
Commissions paid in advanced of contract completion - 77 - -
Recognised as revenue during the period - - 1,380 3,286
Invoiced in advanced of performance during period - - (1,376) (3,091)
- 20 (679) (683)
4.4 Finance Income
Finance income is accrued on an annual basis, by reference to the principal
outstanding at the applicable effective credit interest rate.
4.5 Government Grant Income
A government grant is recognised only when there is reasonable assurance that
(a) the entity will comply with any conditions attached to the grant; and (b)
the grant will be received.
The grant is recognised as income over the period necessary to match them with
the related costs, for which they are intended to compensate, on a systematic
basis.
Government Grant Income is recognised in the Statement of Comprehensive Income
over the period in which the Company recognises expenses for the related costs
for which the grants are intended to compensate. Grants relating to income are
deducted from the related expense.
Government tax credits available on eligible Research and Development
expenditure ('R&D Tax Credits') and not reclaimable through other means
are recognised as Other Income.
5. Revenue and Segment Information
The Group's principal revenue is derived from the provision of cyber security
professional services.
During this period, the Directors received information on financial
performance on a divisional basis. The Directors consider that there are three
reportable operating segments: Assurance (including Remote Support services),
Managed Detection and Response, and Vendor Products. There were a small number
of other transactions recorded during each period which are not considered to
be part of either of the three reportable operating segments. These are
presented below within the 'Other' caption and are not significant.
The Directors do not receive any information on the financial position of each
segment, including information on assets and liabilities. Accordingly, such
information has not been presented.
The Group is not reliant on any single client, with no single client
accounting for 10% or more of revenue. All revenue recognised is derived from
external clients.
The Group's revenue and gross profit by operating segment for the period ended
30 June 2021 and comparative periods is as follows:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Revenue
Assurance 1,476 1,489 3,123
MDR 1,218 1,450 2,886
Vendor Products 45 49 93
Other 31 19 42
Total Revenue 2,770 3,007 6,144
Gross Profit
Assurance 860 905 1,965
MDR 561 932 1,757
Vendor Products 7 8 15
Other (33) (29) (63)
Gross Profit 1,395 1,816 3,674
Operating Loss (722) (282) (480)
Finance Cost (62) (20) (42)
Loss before Taxation (784) (302) (522)
6. Other Income
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
R&D Tax Credits 140 117 282
Total 140 117 282
7. Earnings per Share
Basic Earnings per Share is calculated by dividing the Profit for the period
Attributable to Equity Holders of the Company by the weighted average number
of Ordinary Shares outstanding during the period ('Basic Number of Ordinary
Shares').
Diluted Earnings per Share is calculated by dividing the Profit for the period
attributable to Equity Holders of the Company by the weighted average number
of Ordinary Shares outstanding during the period plus the weighted average
number of Ordinary Shares that would be issued on conversion of all the
potential dilutive Ordinary Shares ('Diluted Number of Ordinary Shares'),
subject to the effect of anti-dilutive potential shares being ignored in
accordance with IAS 33.
Adjusted Earnings per Share is calculated by dividing Adjusted Profit by
Diluted Number of Ordinary Shares.
The calculation of Basic, Diluted and Adjusted Earnings per Share is as
follows:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Net Profit attributable to Equity Holders of the Company (715) (323) (527)
Add back: Exceptional Costs 137 26 145
Add back: Share Based Payments 24 69 100
Adjusted Profit (554) (228) (282)
Number of Ordinary Shares ('000)
Initial Weighted Average 10,007 10,007 10,007
Basic Number of Ordinary Shares 10,007 10,007 10,007
Weighted Average Dilutive Shares in Period 1,160 1,107 1,160
Diluted Number of Ordinary Shares 11,167 11,114 11,167
Earnings per Share (pence):
Basic Earnings per Share (7.1) (3.2) (5.3)
Diluted Earnings per Share** (7.1) (3.2) (5.3)
Adjusted Earnings per Share (5.5) (2.3) (2.8)
** In accordance with IAS 33, the effect of anti-dilutive potential shares has
been ignored
8. Intangible Assets
GROUP & COMPANY
Development Costs
Costs £'000
As at 1 January 2021 1,279
Additions 194
As at 31 December 2021 1,473
As at 01 January 2022 1,473
Additions (6 months) 131
As at 30 June 2022 1,604
Amortisation
As at 1 January 2021 824
Charges for the year 166
As at 31 December 2021 990
As at 01 January 2022 990
Additions (6 months) 93
As at 30 June 2022 1,083
Net Book Value
As at 31 December 2021 483
As at 30 June 2022 521
9. Cash & Cash Equivalents
Unaudited Unaudited Audited
GROUP GROUP GROUP
As at As at Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Cash & Cash Equivalents 299 591 1,168
10. Adjusted (Loss) before Taxation and Adjusted EBITDA
Adjusted (Loss)/Profit before Taxation
Unaudited Unaudited Audited
6 months 6 months Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Loss before Taxation (784) (302) (522)
Share Based Payments 24 69 100
Exceptional Items 137 26 145
Adjusted (Loss) before Taxation (623) (207) (277)
Adjusted EBITDA:
Unaudited Unaudited Audited
6 months 6 months Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Operating Loss (722) (282) (480)
Depreciation and Amortisation 197 206 400
EBITDA** (525) (76) (80)
Share Based Payments 24 69 100
Exceptional Items 137 26 145
Adjusted EBITDA* (364) 19 165
Unaudited Unaudited Audited
6 months 6 months Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Operating Loss (722) (282) (480)
Share Based Payments 24 69 100
Exceptional Items 137 26 145
Adjusted Operating Loss* (561) (187) (235)
* Adjusted Operating Loss and EBITDA excludes one-off charges and share based
charges.
* * EBITDA is defined as Earnings before Interest, Tax, Depreciation and
Amortisation.
11. Subsidiary Undertakings
ECSC Group plc currently has the following wholly-owned subsidiaries, which
are incorporated and registered in England and Wales:
Name of Subsidiary Registered Office Date of Incorporation Principal Activity
ECSC Services Limited 28 Campus Road 18 April 2017 Dormant
Listerhills Science Park
Bradford
BD7 1HR
ECSC Labs Limited 28 Campus Road 18 April 2017 Dormant
Listerhills Science Park
Bradford
BD7 1HR
ECSC Australia Limited 28 Campus Road 29 September 2016 Intermediary holding company
Listerhills Science Park
Bradford
BD7 1HR
ECSC Australia Limited currently has the following wholly-owned subsidiary,
which is incorporated and registered in Australia:
Name of Subsidiary Registered Office Date of Incorporation Principal Activity
ECSC Australia Pty Limited Governor Phillip Tower Level 36 20 March 2017 Provision of professional cyber security services
1 Farrer Place
Sydney
NSW 2000
The share capital of each Group entity is as follows:
Entity Ordinary Shares in Issue Nominal Value Investment at Cost
ECSC Services Limited 1 share £1 £1
ECSC Labs Limited 1 share £1 £1
ECSC Australia Limited 1 share £1 £1
ECSC Australia Pty Limited 100 shares AUD 1 AUD 100
Total £60
* AUD = Australian dollars
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. END IR EAPNKAEPAEFA
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