REG - Shearwater Group PLC - FY24 Trading Update

ShearwaterAnnouncement

03/04/2024 07:15

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RNS Number : 0629J  Shearwater Group PLC  03 April 2024

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now considered to be in the public domain.

 

3 April 2024

Shearwater Group PLC

 

("Shearwater", or the "Group")

 

FY24 Trading Update

 

Shearwater Group plc, the cybersecurity, advisory and managed security
services group, announces an update on trading for the financial year ended 31
March 2024 ("FY24").

 

As guided at the half year, trading is traditionally weighted to the second
half and whilst the Group was bolstered at the beginning of Q3 with visibility
of sales opportunities across both the Services and Software divisions, it
continued to experience delays in concluding larger contracts which were
expected and remain in negotiation.

 

Revenue in FY24 is expected to be c.£22.5m (FY23: £26.7m), with Adjusted
EBITDA(1)  returning to profit compared to the prior year at just under £1m
(FY23: £(0.2)m). Whilst this unaudited financial performance was below market
expectations(2  )the Group continues to maintain a healthy balance sheet with
year end cash at £5m, in line with market expectations, £1m ahead of the
prior year and £3m higher than the cash position at the half year, reflecting
the expected cash generation in the second half.

 

The Board is reassured by a particularly strong renewal schedule for FY25 and
a number of high value contracts in advanced negotiations with blue chip
customers, providing confidence in returning to growth during FY25.  The new
year has started well, with the first scheduled contract renewal already
secured, to a value of £1.4 million. The deal has been signed with a British
media and telecommunications company, for an enhanced and renewed data
protection service with Brookcourt Solutions.

 

Phil Higgins, CEO of Shearwater Group, commented: "Although we are
understandably disappointed by our performance this year, there are compelling
reasons for optimism as we look ahead. Our confidence in achieving growth in
FY25 and beyond remains strong. Notably, our new business opportunity pipeline
has reached an exceptionally robust level, and we are actively negotiating
several substantial contracts."

 

David Williams, Chairman of Shearwater Group, commented: "With small company
valuations continuing to remain under considerable pressure, it is important
to note that nearly half of the Shearwater market valuation is represented by
the £5 million of cash announced today. This attributes precious little value
for what is a profitable company with a solid market position and growth
opportunities, and one in which the Board continues to see growth potential as
we strive to improve returns."

 

(1) Adjusted EBITDA is defined as profit before tax, before one off
exceptional items, share based payment charges, finance charges, impairment of
intangible assets, depreciation and amortisation.

 

(2) The Company considers current consensus market expectations, ahead of this
trading update, for the year ended 31 March 2024 are for revenues of £32.5m
and Adjusted EBITDA of £2.5m.

 

All figures are subject to finalisation following the year end and are
unaudited.

 

Enquiries:

 Shearwater Group plc                                               www.shearwatergroup.com

 David Williams, Chairman                                           c/o Alma

 Phil Higgins, CEO

 Adam Hurst, Interim CFO

 Cavendish Securities plc - NOMAD                                   +44 (0) 20 7397 8900

 Adrian Hadden / Ben Jeynes / Fergus Sullivan - Corporate Finance

 Henry Nicol / Dale Bellis / Michael Johnson - Sales

 Alma                                                               shearwater@almastrategic.com (mailto:shearwater@almastrategic.com)

 Justine James / Joe Pederzolli                                     +44 (0) 20 3405 0205

 

About Shearwater Group plc

 

Shearwater Group plc is an award-winning group providing cyber security,
managed security and professional advisory solutions to create a safer online
environment for organisations and their end users.

 

The Group's differentiated full service offering spans identity and access
management and data security, cybersecurity solutions and managed security
services, and security governance, risk and compliance. Its growth strategy is
focused on building a scalable group that caters to the entire spectrum of
cyber security and managed security needs, through a focused buy and build
approach.

 

The Group is headquartered in the UK, serving customers globally across 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
(http://www.shearwatergroup.com/) .

 

 

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