REG - Shearwater Group PLC - Interim Results
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RNS Number : 8555W Shearwater Group PLC 17 March 2026
17 March 2026
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.
Shearwater Group plc
("Shearwater", or the "Group")
Interim Results
Strong revenue growth and confidence in H2 delivery
Shearwater Group plc, the cybersecurity, advisory and managed security
services group, announces its unaudited interim results for the six months
ended 31 December 2025.
Financial Highlights
· Revenue of £14.0m, an increase of 31% on the equivalent period in the prior
year (Jul to Dec FY25 (restated): £10.7m) and an increase of 24% on the
reported FY25 interim result (Apr to Sep FY25: £11.3m), reflecting organic
growth and ongoing revenue from FY25 contract wins
· Adjusted EBITDA profit of £0.0m (Jul to Dec FY25 (restated): £0.1m profit)
and reported loss for FY25 H1 of £0.4m
· Adjusted administrative expenses of £2.9m, down 6% on equivalent period in
prior year (Jul to Dec FY25: £3.0m) reflecting successful cost reduction
initiatives and restructuring implemented in FY25
· Cash and cash equivalents of £2.2m, negatively impacted by short term timing
of project cash flow, with one material contract outflow unwound on 20 January
2026. Adjusting for this, the balance would have been £3.7m (31 Dec 2024:
£3.6m).
Operational Highlights
· Strong Services momentum, underpinned by continued demand from blue‑chip
customers across Telecommunications, Financial Services and Government
· Material Services contract wins and expansions, including a £7.3m extension
with a leading mobile network operator, expansion with a Central Government
department
· Return to profitability in the Pentest business, following restructuring
actions in FY25
· Continued demand for on‑premise software solutions, particularly from
customers in highly regulated sectors
· Positive start to H2, with £9m renewal and extension with a global financial
organisation delivered shortly following period end.
Board Update
· Robin Southwell appointed as Chair, effective from 1 February
2026.
Outlook
· Strong pipeline supported by continued Services momentum, with H2 contract
wins already secured and which align to the peak of the sales cycle
· Margin improvement expected in H2 as new solutions are delivered
· Board remains confident of delivery of full-year performance in line with
market expectations.
(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) Adjusted Loss Before Tax defined as net profit before tax, exceptional
items, share based payments and amortisation of acquired intangible assets.
Phil Higgins, Group CEO commented: "The first half of FY26 represents a period
of continued progress for the Group, with good revenue growth and improving
operational performance. We continue to see robust demand from customers
operating in high threat environments, particularly across Telecommunications,
Financial Services and Government, where cyber security remains a critical
strategic priority.
"Our Services business delivered strong momentum during the period, supported
by material multi‑year contract wins and a return to profitability in the
Pentest business following the actions taken in FY25. At the same time, we
have continued to invest in our software portfolio, with notable customer
expansions, reinforcing our confidence in its medium‑term potential.
"Against a favourable and growing cyber security market backdrop, we enter the
second half with a strong pipeline of opportunities. With recent contract wins
and margin improvement expected as new solutions are delivered, we remain
confident in our ability to deliver improved performance in H2 and to meet our
FY26 market expectations."
Investor Presentation
Shearwater Group's CEO, Phil Higgins and CFO, Jonathan Hall, will host an
investor presentation via the Investor Meet Company platform at 12pm today
(Tuesday, 17 March 2026).
Investors can sign up to Investor Meet Company for free and add to meet
Shearwater Group via:
https://www.investormeetcompany.com/shearwater-group-plc/register-investor
(https://www.investormeetcompany.com/shearwater-group-plc/register-investor)
(https://www.investormeetcompany.com/shearwater-group-plc/register-investor)
A video interview with Phil Higgins, CEO, and Jonathan Hall, CFO, is available
to view
here: http://www.voxmarkets.com/articles/interview-with-shearwater-group-c2e6219
(http://www.voxmarkets.com/articles/interview-with-shearwater-group-c2e6219)
Enquiries
Shearwater Group plc www.shearwatergroup.com (http://www.shearwatergroup.com/)
Phil Higgins, CEO c/o Alma
Jonathan Hall, CFO
Cavendish Capital Markets Limited - NOMAD and Broker +44 (0) 20 7397 8900
Adrian Hadden / Ben Jeynes - Corporate Finance
Dale Bellis / Michael Johnson - Sales
Alma Strategic Communications shearwater@almastrategic.com (mailto:shearwater@almastrategic.com)
Justine James / Joe Pederzolli / Emma Thompson +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/) .
Chief Executive's Review
Overview
We are pleased to report a positive start to the year. Results for the first
half of FY26 are in line with expectations and we are on track to deliver
full-year performance in line with market guidance, which would represent a
second consecutive year of strong growth in both revenue and underlying
profitability.
Revenue for the period increased by 31% compared to the equivalent period in
the prior year (restated in line with our revised revenue recognition policy).
This growth was underpinned by a 37% uplift in revenue from our Services
business, which accounted for 92% of total revenue in the period.
Our continued selection by many of the UK's most high-profile organisations,
most notably in the Telecommunications and Financial Services sectors, and
across multiple branches of HM Government, again underscores the value placed
on our expertise, track record, and proprietary technologies in an
increasingly complex threat environment.
Revenue growth in the period reflected not only organic growth but the impact
of changes to our accounting policies announced in 2025 and also business mix,
as outlined in greater detail in the Chief Financial Officer's report.
Accordingly, reported profitability at the EBITDA level remained similar to
the equivalent period (as restated) in 2025.
As we look ahead to the second half of the year, typically our strongest, we
have a rich pipeline of opportunities. Since the start of H2, I have been
pleased to be able to announce:
· A £9m contract renewal and expansion, with a major global financial
organisation for the provision of Advanced Email Gateway and Insider Threat
Management arrangements
· A £1.3m contract with a major UK telco to supply and install an advanced
network monitoring solution
We also continue to work on a number of further material opportunities across
both divisions. As a result, we expect both Revenue and EBITDA to improve
materially in H2, delivering full-year performance in line with market
expectations.
Market Opportunity
Cybersecurity remains a critical strategic imperative for organisations across
all sectors, fuelled by a persistent escalation in the volume, complexity, and
impact of cyber threats. This sustained demand is driving significant and
continued growth in the global cybersecurity market. Industry forecasts
predict a Compound Annual Growth Rate (CAGR) of approximately 14% over the
next decade, projecting a total market value exceeding $500 billion in the
medium term 1 (#_ftn1) . The UK market is similarly robust, forecast to grow
at a rate of 10-12% 2 (#_ftn2) .
Shearwater Group, with its portfolio of established and highly-regarded
brands, offers a differentiated, full-service cybersecurity solution. We are
well-positioned to capitalise on this substantial market opportunity,
leveraging our team's deep expertise, proven delivery record, and strong
relationships with a blue-chip customer base. We anticipate benefiting
directly from the continued expansion of both the global and UK cybersecurity
landscapes.
Services
H1 FY26 H1 FY25 3 (#_ftn3) YOY 15 months to
(unaudited) (unaudited) 30 June 2025
£m £m % £m
Revenue 12.9 9.4 +37% 37.0
Gross profit 2.2 2.3 -4% 8.0
Gross profit margin % 17% 24% 22%
Overheads (1.8) (1.8) (4.7)
Adjusted EBITDA 0.4 0.5 3.3
Adjusted EBITDA % 3% 5% 9%
Revenue in the Services segment of the business grew 37% on the equivalent
period in the prior year. This was in a large part, driven by the impact of
ongoing revenues relating to the provision of cloud-hosted software solutions
and oversight of third-party support from contracts delivered in FY25. In
part, this reflects the Groups revised revenue recognition policy announced
last year regarding cloud-hosted software and third-party support contracts.
This change in accounting policy diluted the gross margin during the period to
17%, resulting gross profit of £2.2m down slightly on the equivalent period
in the prior year (FY25 H1 restated: £2.3m).
Overheads of £1.8m in the period remain broadly in line with the prior year
(FY25 H1 restated: £1.8m), with operational efficiencies delivered through
FY25 and the investment in technology including our own proprietary AI
solution offsetting the impact of a £0.2m investment in further sales
capability, which we expect to benefit the Group in H2 and beyond.
Key contract wins within our Solutions business in the period included:
· A £7.3m contract extension and expansion with a leading mobile network
operator for the provision of data security licenses over 3 years, with £3.5m
of revenue from this contract expected to impact FY26 results
· A contract extension and expansion with a central Government department,
consolidating threat intelligence services for smaller government
organisations, with a total contract value of approximately £1m over 3 years.
Our Pentest business delivered premium penetration testing services to more
than 60 clients in the period, including globally recognised brands in the
technology, financial services and retail sectors, along with a number of
public sector bodies. Combined with restructuring activities undertaken during
H2 FY25, this returned the Pentest business to operating profitability. During
H1 FY26, we won a framework contract with another Government department to
deliver specialised web application and infrastructure testing services in
support of a significant transformation of its digital infrastructure. This
is expected to contribute £0.3m over the next 3 years.
We have benefited during the period from the opportunities created from being
part of the G-Cloud 14 portal. During H1 we completed the application
process for the G-Cloud 15 portal, which will come into effect in FY27,
expanding the number of Shearwater products available to public sector
organisations from 32 to 55. This will further increase the potential
opportunity from an expected increase in Government investment in
cybersecurity over the coming years.
Across all the brands within the Services segment of our business, we continue
to be selected by some of the world's leading brands, as a result of the
quality of our people, our technology and our proven track record of
delivering for our clients.
We enjoy strong relationships with providers of cutting-edge solutions,
selecting only the best products to bring to our clients. Our success in doing
this is evidenced by the frequency with which these solutions are renewed,
often on an expanded basis. With the rate of change in technology and hence
the nature of cyber threats, we also constantly monitor the market for new
products to deal with the next wave of threats. As a result, we were delighted
during the period to add Anzen, a post-quantum-safe data-protection system
that anonymises, shards, and securely distributes sensitive data to our
portfolio of products.
As we move into the traditionally stronger period of the year in H2, we have a
strong pipeline of opportunities. Since the start of the period, I am pleased
that we have already been able to announce two further major contract wins.
Our success in winning these contracts, together with the groundwork laid
during H1 and an ongoing strong pipeline of opportunities mean that we remain
confident in delivering a second year of strong growth in both revenue and
EBITDA within our Services business.
Software
H1 FY26 H1 FY25(1) YOY 15 months to
(unaudited) (unaudited) 30 June 2025
£m £m % £m
Revenue 1.1 1.3 -12% 2.6
Gross profit 0.7 0.9 -24% 1.6
Gross profit margin % 62% 72% 62%
Overheads -0.3 -0.4 -1.0
Adjusted EBITDA 0.4 0.5 0.6
Adjusted EBITDA % 36% 40% 23%
Revenue in H1 FY26 was £1.1m, down 12% from the equivalent period in the
prior year (FY25 H1: £1.3m), but 9% up on the pro-rated total for the full
year FY25. Cost of sales remained constant period on period at £0.4m. As a
result, gross profit for the period was £0.7m (FY25 H1: £0.9m).
Overheads reduced slightly from £0.4m to £0.3m, resulting in an adjusted
EBITDA profit for the period of £0.4m (FY25 H1: £0.5m).
We have seen continued interest in product from clients wanting a flexible,
on-premise solution, particularly including clients in highly regulated
sectors:
- Financial services:
o Global international bank committed to extension and expanded user base to
70,000 staff
o Major building society onboarded driven by increasing MFA compliance
regulations in sector
- Defence:
o Renewals and contract expansions delivered for suppliers to UK Naval Defence
sector and a European supplier to UK defence sector.
Due to the data sovereignty rules, high data security and a related preference
for on-premise solutions, directors also see Middle East and West Asia as key
areas of opportunity. During H1 a new distributor, AdvanzaTech was secured
covering this region.
Board update
On 31 January 2026, after more than a decade with the Company, David Williams
stepped down as Chair. He was replaced by existing Non-executive Director
Robin Southwell OBE. Robin holds over forty years' experience in the
aerospace and defence industry. His roles have included Chief Executive
Officer of Airbus UK and Airtanker Ltd, as well as senior positions at BAE
Systems. Robin was a DTI Business Ambassador for the UK Government and
received his OBE in 1997. Together with the rest of the Board, I am delighted
that he has agreed to take on the role of Chair and would like to thank David
for everything he has done for the Group.
Current Trading and Outlook
We enter the second half of the year with an increasing level of confidence.
Momentum in the Services business remains strong, with new deals progressing
through the pipeline across Telecommunications, Financial Services, Government
and other regulated sectors.
Margin improvement is expected in H2 as higher‑value solutions are delivered
and the benefit of recent contract wins feeds through. While revenue
visibility in the Software division is lower, post-period end wins in Services
mean we have more than £13m of contracted business since the start of H2,
which support the delivery of FY26 expectations.
The favourable market dynamics underpin encouraging levels of demand and
customer engagement. We are seeing increasing levels of technology and
cyber‑related investment from customers who are responding both to
intensifying regulatory requirements and to several years of
under‑investment that now need to be addressed, coupled with the accelerated
integration of AI across our end markets that increasingly fuels the need for
secure systems.
Combined with a strong pipeline, a highly respected portfolio of brands and a
robust financial position to facilitate growth, the Board is confident in
delivering improved profitability in H2 and achieving full‑year
expectations.
Philip Higgins
CEO
17 March 2026
Chief Financial Officer's Review
Overview
The six months to 31 December 2025 represent a positive start to FY26, with
revenue increasing by 31% to £14.0m compared to the equivalent period last
year 4 (#_ftn4) . This growth was primarily driven by a 37% increase in
revenue from our Services segment, largely reflecting ongoing revenue from
cloud-hosted software and third-party servicing contracts secured in FY25.
This component of revenue has a lower margin profile than up-front revenue
recognised on the delivery of new solutions. As a result, there was a slight
decrease in gross profit to £2.9m (FY25 H1: £3.2m). Further detail on
revenue and gross profit performance is provided below.
We delivered a reduction in Adjusted Administrative expenses of £0.2m to
£2.9m, achieved through the restructuring activities undertaken in the second
half of FY25, and despite a planned £0.2m investment in expanding our
Services sales capacity, which is expected to deliver benefits in the second
half of FY26 and beyond. This resulted in a small Adjusted EBITDA profit for
the period of £0.0m, broadly in line with that in the equivalent period of
the prior year (FY25 H1: £0.1m).
The Group has a strong pipeline and we are pleased to have already announced
two major contract wins since the period end, underpinning the Board's
confidence in achieving our full year expectations, which would represent a
second consecutive year of strong revenue and EBITDA growth.
Revenue and Gross Profit
Revenue for the six months to 31 December 2025 totalled £14.0m, representing
year-on-year growth of 31%. This was driven by a 37% increase in revenue from
our Services business to £12.9m, partially offset by a 12% decline in
Software revenue to £1.1m.
As previously disclosed, the Group revised its revenue recognition policy in
FY25 to better align with IFRS 16, specifically regarding cloud-hosted
software and third-party support contracts. This policy spreads the cost of
sales over the contract lifetime and recognises a margin consistent with a
standard reseller over the same period. The majority of profit from such
contracts, however, continues to be recognised at the point of solution
delivery - reflecting the value clients derive from design, procurement, and
deployment of a solution. This approach can result in a higher initial margin
upon deployment of these solutions, followed by a period of lower-margin
recurring revenue.
The FY25 H1 gross margin, restated to reflect the new policy, benefited from
the delivery of two significant multi-year cloud-hosted contracts. This,
combined with a smaller carry-forward of lower-margin revenue from prior
periods following reduced sales in FY23 and FY24, resulted in a Services gross
margin of 23.8% for the half year - higher than the full-year FY25 margin of
21.6%.
By contrast, FY26 H1 revenues were primarily comprised of new on-premise
solutions in the period, on which revenues and cost of sales are all
recognised on delivery, together with revenues brought forward into the period
from solutions deployed through FY25.
In total in FY26 H1, the services business delivered £10.0m of new solutions
in the period at a gross margin of 21.5%. By contrast in the comparative
period £12.0m of new contracts were delivered at an average gross margin of
19.2%.
Revenue in our Software business to £1.1m, representing a 12% decrease on the
same period in the prior year, however, representing a 9% increase from
pro-rated total across FY25 as a whole. The resulting £0.2m reduction in
revenue, resulted in a £0.2m reduction in gross profit also.
Adjusted EBITDA
Adjusted EBITDA profit for the period was £0.0m (£9k) representing a £0.1m
reduction on the equivalent period in the prior year (as restated), but a
£0.4m improvement on the reported interims for FY25. This result was the
net impact of the slight reduction in gross profit outlined above, coupled
with a £0.2m reduction in underlying Administrative Expenses, reflecting the
impact of cost reduction activities delivered during FY25.
H1 FY26 H1 FY25(1) YOY 15 months to
(unaudited) (unaudited) 30 June 2025
£m £m % £m
Revenue 14.0 10.7 +24% 39.5
Gross profit 2.9 3.2 -10% 9.6
Gross margin (%) 20% 30% 24%
Overheads (2.9) (3.1) -6% (7.3)
Adjusted EBITDA 0.0 0.1 2.2
Adjusted EBITDA margin % 0% 1% 6%
Finance income (net) 0.1 0.0 0.1
Depreciation (0.1) (0.1) (0.2)
Amortisation of intangible assets - computer software (0.6) (0.6) (1.5)
Adjusted loss before tax (0.6) (0.5) 0.6
Amortisation of acquired intangible assets (0.7) (1.1) (2.6)
Exceptional items & Share-based payments (0.0) 0.0 (11.4)
Loss before tax (1.3) (1.6) (13.4)
Taxation credit 0.3 0.4 1.4
Loss after tax (1.0) (1.2) (12.0)
Finance income (net)
Finance income of £0.1m (FY25 H1: £0.0m) reflects interest earned on bank
deposits, which more than offset interest charged on capitalised leases. The
Group continues to have no long-term debt.
Amortisation and Depreciation
Amortisation and Depreciation in the period consisted of:
· £0.1m of depreciation on tangible fixed assets;
· £0.6m of amortisation of capitalised product development expenditure relating
to the Group's proprietary software products; and
· £0.7m of amortisation on acquired intangibles relating to the acquisition of
the Group's subsidiary businesses.
The amortisation of acquired intangibles shows a reduction on the comparative
period, following an exceptional impairment charge applied in the FY25 full
year results.
Loss before tax
The loss before tax of £1.3m (FY25 H1: £1.6m) reflected the £0.1m reduction
year-on-year reduction in Adjusted EBITDA, net of the impact of depreciation,
amortisation and net finance income.
Taxation
The taxation credit for the period has been calculated at the prevailing rate
of 25%. It shows a slight reduction year on year, reflecting a reduction in
the deferred tax credit, following the impairment of intangible assets in
FY25.
Statement of Cash Flow
The second-half weighted trading performance of the Group typically results in
a cash outflow in H1, followed by net receipts in H2. FY26 H1 was no
exception, however, in this year the impact was exacerbated by one contract
which required payment to the software vendor to be made in December 2025,
with the receipt of £1.5m from the customer only arriving on 20 January 2026,
shortly following the period end.
This resulted in period-end cash of £2.2m (FY25 H1: £3.6m).
6 months to 30 September
H1 FY25 H1 FY24 12 months to 31 March 2024
(unaudited) (unaudited)
£m £m £m
Adjusted EBITDA 0.0 0.1 2.2
Movements in working capital and exceptional items (2.4) (1.8) (1.0)
Cash used / generated from operations (2.4) (1.7) 1.2
Capital expenditure (net of disposal proceeds) (0.5) (0.5) (1.4)
Tax received / (paid) 0.0 0.0 0.3
Net finance costs received/ (paid) 0.1 0.1 0.1
Payments of lease liabilities (0.1) (0.1) (0.2)
Movement in cash (2.9) (2.2) 0.1
Opening cash and cash equivalents 5.1 5.8 5.0
Closing cash and cash equivalents 2.2 3.6 5.1
Alternative performance measures
This review includes alternative performance measures ('APMs') alongside the
standard IFRS measures. The Directors believe that alternative measures
provide additional relevant information regarding the adjusted performance of
the business. APMs are used to enhance the comparability of information
between reporting periods by adjusting for one off exceptional and other items
that affect the IFRS measure. Consequently, the Directors and management use
APM's in addition to IFRS measures to assess the adjusted performance of the
business.
Alternative performance measures used include:
§ Adjusted EBITDA
§ Adjusted loss before tax
§ Adjusted loss after tax
§ Adjusted earnings/loss per share
Adjusting items include:
Exceptional items which are one off by their nature such as acquisition costs
or re-organisation costs and do not form part of the underlying operational
cost of the business.
Share based payment charges awarded from long-term remuneration incentives to
certain staff. Despite the plans not having a cash cost to the business, a
share-based payment charge is taken to the statement of comprehensive income
which the directors believe does not form part of the underlying operating
cost of the business.
Amortisation of identified intangible assets acquired as part of an
acquisition is charged to the statement of comprehensive income but does not
form part of the underlying operating cost of the business.
Principal risks and uncertainties
The Group works to minimise its exposure to operational, financial and other
risks, however in pursuit of achieving its growth strategy there will always
be an element of risk that needs to be considered. The Group's principal risks
and uncertainties, as detailed in the financial statements for the 15-month
period ended 30 June 2025, are all still considered to be valid.
Statement of Directors' responsibilities
We confirm that to the best our knowledge that:
· The condensed interim set of financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the United
Kingdom;
· The interim report includes a fair review of information required by DTR
4.2.7R (indication of important events during the first six months and
description of principal risks and uncertainties for the remaining six months
of the year); and
· The interim report includes a fair review of the information required by DTR
4.2.8R (disclosure of related parties transactions and any change therein).
Jonathan Hall
Chief Financial Officer
17 March 2026
Unaudited condensed consolidated statement of comprehensive income
for the 6 months to 31 December 2025
H1 FY 26 H1 FY25
Note £m £m
Revenue 3 14.0 10.7
Cost of sales (11.1) (7.5)
Gross profit 2.9 3.2
Administrative expenses (2.9) (3.1)
Depreciation and amortisation (1.4) (1.7)
Total operating costs (4.3) (4.8)
Operating loss (1.4) (1.6)
Adjusted EBITDA 3 0.0 0.1
Depreciation and amortisation (1.4) (1.7)
Share-based payments - -
Operating loss (1.4) (1.6)
Finance income/ (cost) (net) 4 0.1 0.1
Loss before taxation (1.3) (1.6)
Income tax credit 5 0.3 0.4
Loss for the period and attributable to equity holders of the Company (1.0) (1.2)
Other comprehensive loss
Items that may be classified to profit and loss:
Exchange differences on translation of foreign operations - -
Total comprehensive loss for the period (1.0) (1.2)
(Loss) per ordinary share attributable to the owners of the parent £ £
Basic and diluted (£ per share) 6 (0.04) (0.05)
Adjusted basic and diluted (£ per share) 6 (0.01) (0.01)
Unaudited condensed consolidated statement of financial position
as at 31 December 2025
H1 FY26 H1 FY25
Note £m £m
Assets
Non-current assets
Intangible assets 28.1 41.0
Property, plant and equipment 0.1 0.1
Right of use assets 0.2 0.3
Deferred tax 1.3 1.3
Trade and other receivables 7 5.2 2.4
Total non-current assets 34.9 45.1
Current assets
Trade and other receivables 8 15.7 17.1
Cash and cash equivalents 2.2 3.6
Total current assets 17.9 20.7
Total assets 52.8 65.8
Liabilities
Current liabilities
Trade and other payables 9 (16.6) (17.0)
Total current liabilities (16.6) (17.0)
Non-current liabilities
Creditors: amounts falling due after more than one year 10 (3.5) (4.5)
Total non-current liabilities (3.5) (4.5)
Total liabilities (20.1) (21.5)
Net assets 32.7 44.3
Capital and reserves
Share capital 11 22.3 22.3
Share premium 34.6 34.6
Other reserves 23.1 23.1
Translation reserve 0 0
Accumulated losses (47.3) (35.7)
Total equity 32.7 44.3
Unaudited condensed consolidated statement of changes in equity
as at 31 December 2025
Share capital Share premium Other reserves Translation reserve Accumulated losses Total Equity
£000 £000 £000 £000 £000 £000
At 30 June 2024 (unaudited) 22.3 34.6 23.1 - (34.5) 45.5
Loss for the period - - - - (1.2) (1.2)
Other comprehensive profit for the period - - - -
Total comprehensive loss for the period - - - - (1.2) (1.2)
Contributions by and distributions to owners
Share-based payments - - - - - -
At 31 Dec 2024 (unaudited) 22.3 34.6 23.1 - (35.7) 44.3
Loss for the period - - - - (10.6) (10.6)
Other comprehensive loss for the period - - - - - -
Expiry of share options - - - - - -
Total comprehensive loss for the period - - - - (10.6) (10.6)
Contributions by and distributions to owners
Share-based payments - - - - - -
At 30 June 2025 (audited) 22.3 34.6 23.1 - (46.3) 33.7
Loss for the period - - - - (1.0) (1.0)
Other comprehensive profit/loss for the period - - - - - -
Total comprehensive profit/loss for the period - - - - (1.0) (1.0)
Contributions by and distributions to owners
Share-based payments - - - -
At 31 Dec 2025 (unaudited) 22.3 34.6 23.1 - (47.3) 32.7
Unaudited condensed consolidated cash flow statement
for the 6 months to 31 December 2025
H1 FY26 H1 FY25
£m £m
Cash flows from operating activities
Loss for the period (1.0) (1.2)
Adjustments for:
Amortisation of intangible assets 1.3 1.7
Depreciation of right of use assets 0.1 0.1
Depreciation of property, plant and equipment - -
Share-based payment charge - -
Exceptional items - -
Finance costs - -
Finance income (0.1) (0.1)
Income tax (0.3) (0.3)
Cash flows (used in)/ from operating activities before changes in working 0.0 0.1
capital
Decrease/(increase) in trade and other receivables (5.4) (8.7)
(Decrease)/increase in trade and other payables 3.0 6.9
Cash used in operations (2.4) (1.7)
Net foreign exchange movements - -
Finance costs paid 0.1 0.1
Tax received - -
Net cash used in operating activities before exceptional items (2.3) (1.6)
Net cash flows on exceptional items - -
Net cash used in operating activities (2.3) (1.6)
Investing activities
Purchase of property, plant and machinery - -
Purchase of intangibles (0.5) (0.5)
Net cash used in investing activities (0.5) (0.5)
Financing activities
Repayment of lease liabilities (0.1) (0.1)
Net cash used in financing activities (0.1) (0.1)
Net decrease in cash and cash equivalents (2.9) (2.2)
Foreign exchange movements on cash and cash equivalents -
Cash and cash equivalents at the beginning of the period 5.1 5.8
Cash and cash equivalents at the end of the period 2.2 3.6
Notes
1. General information
The unaudited interim condensed consolidated financial information was
authorised by the board of directors for issue on 25 November 2024. The
information for the six-month period ended 30 September 2024 has not been
audited and does not constitute statutory accounts as defined in section 434
of the Companies Act 2006, and should therefore be read in conjunction with
the audited consolidated financial statements of the Company and its
subsidiaries for the year ended 31 March 2023, which have been prepared in
accordance with UK Adopted International Accounting Standards (IFRS) and filed
with the Registrar of Companies. The Independent Auditor's Report on that
Annual Report and Financial Statements for 2023 was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
a) Basis of preparation
These unaudited interim condensed consolidated financial statements have been
prepared on the historical cost accounting basis, in accordance with UK
adopted International Accounting Standards ('IFRS') and with those parts of
the Companies Act 2006 applicable to companies reported under IFRS and are
consistent with those that are expected to be adopted in the annual statutory
financial statements for the year ended 31 March 2025.
The interim consolidated financial information does not comply with IAS 34
Interim Financial Reporting, as permissible under the rules of AIM.
b) Going concern
After making enquiries, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for at least
twelve months from the date of publication of these interim financial
statements. Accordingly, they continue to adopt the going concern basis in
preparing these consolidated financial statements.
The Directors have reviewed the Group's going concern position taking into
account its current business activities, performance to date against budgeted
targets and the factors likely to affect its future development which include
the Group's strategy, principal risks and uncertainties and its exposure to
credit and liquidity risks.
The Directors have reviewed a detailed reforecast of trading which includes a
cash flow forecast for a period which covers a period of trading to June 2027
and have challenged the assumptions used to create these forecasts. This
forecast demonstrates that the Group is able to pay its debts as they fall due
during this period.
The Directors have reviewed a highly sensitised stress test which has factored
in what the Directors believe would be an extreme scenario which incorporates
a significant reduction in new business revenues across both segments of the
Group, a reduction of renewal rates in our software division and a scaling
back of revenues within our Services division. Overall, the sensitised cash
flow forecast demonstrates that the Group will be able to pay its debts as
they fall due for the period to at least 30 June 2027.
c) Critical accounting judgements estimates and assumptions
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the amounts reported for
income and expenses during the year and that affect the amounts reported for
assets and liabilities at the reporting date.
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those described in the last annual financial statements.
Revenue recognition
Management make judgements, estimates and assumptions in determining the
revenue recognition of material contracts sold by the Group's Services
division. The Group work with large enterprise clients, providing services and
solutions to support the clients' needs. In many cases a third-party's
products or services will be provided as part of a solution. Management will
consider the implications around timing of recognition, with factors such as
determining the point control passes to the client and the subsequent
fulfilment of the Group's performance obligations. In addition to this
management will consider if it is acting as agent or principal.
Impairment of goodwill, intangible assets and investment in subsidiaries
Management make judgements, estimates and assumptions in supporting the fair
value of goodwill, intangible assets and investments in subsidiaries. The
Group carry out annual impairment reviews to support the fair value of these
assets. In doing so management will estimate future growth rates, weighted
average cost of capital and terminal values.
Leases
Management make judgements, estimates and assumptions regarding the life of
leases. Management continue to review all existing leases, which all relate to
office space, and will look to reduce the number of offices across the Group
if they are not sufficiently utilised. For this reason management have assumed
that the life of leases does not extend past the current contracted expiry
date. A judgement has been taken with regard to the incremental borrowing rate
based upon the rate at which the Group can borrow money.
3. Segmental information
In accordance with IFRS 8, the Group's operating segments are based on the
operating results reviewed by the Board, which represents the chief operating
decision maker. The Group reports its results in two segments as this
accurately reflects the way the Group is managed.
The Group is organised into two reportable segments based on the types of
products and services from which each segment derives its revenue - software
and services.
Segment information for the 6 months ended 30 September 2024 is presented
below and excludes intersegment revenue, as it is not material, and assets as
the Directors do not review assets and liabilities on a segmental basis.
Six-month period ended 31 December
2025 2025 2024 2024
Revenue Profit Revenue Profit
(unaudited) (unaudited) (unaudited) (unaudited)
£m £m £m £m
Services 12.9 2.2 9.4 2.3
Software 1.1 0.7 1.3 0.9
Group total 14.0 2.9 10.7 3.2
Group costs (2.9) (3.1)
Adjusted EBITDA (0.0) 0.1
Amortisation of intangibles (1.3) (1.6)
Depreciation (0.1) (0.1)
Share-based payments - -
Exceptional items - -
Finance costs (net) 0.1 0.1
Loss before tax (1.3) (1.6)
The Group is domiciled in the United Kingdom and currently the majority of its
revenues come from external customers that are transacted in the United
Kingdom. A number of transactions which are transacted from the United Kingdom
represent global framework agreements, meaning our services, whilst transacted
in the United Kingdom, are delivered globally. The geographical analysis of
revenue detailed below is on the basis of country of origin in which the
master agreement is held with the customer (where the sale is transacted).
Six-month period ended 31 December
2025 2024
(unaudited) (unaudited)
£m £m
United Kingdom 10.9 9.4
Rest of Europe 1.5 0.6
North America 1.5 0.6
Rest of the world 0.1 0.1
14.0 10.7
4. Finance costs and income
Six-month period ended 31 December
2025 2024
(unaudited) (unaudited)
Finance costs £m £m
Revolving Credit Facility charges - -
Interest payable on lease liabilities - -
- -
Finance income in the period was £79k (H1 FY24: 53k)
5. Income Tax
The tax credit recognised reflects management estimates of the tax for the
period and has been calculated using the estimated average tax rate of UK
corporation tax for the financial period of 25% (FY24: 25%)
6. (Loss) per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period. For diluted loss per share, the weighted
average number of shares in issue is adjusted to assume conversion of all the
potential dilutive ordinary shares. The potential dilutive shares were
anti-dilutive for the six months ended 30 September 2024 and six months ended
30 September 2023 as the Group was loss making.
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation but before amortisation of acquired
intangibles after tax, share based payments, impairment of intangible assets
and exceptional items after tax. The potential dilutive shares were
anti-dilutive for the six months ended 30 September 2023 as the Group was loss
making.
The calculation of the basic and diluted earnings per share from total
operations attributable to shareholders is based on the following data:
Six-month period ended 31 December
2025 2024
(unaudited) (unaudited)
£000 £000
Net loss from total operations
Loss for the purposes of basic and diluted loss per share being net loss (1.0) (1.2)
attributable to shareholders:
Add/(remove)
Amortisation of acquired intangibles (net of tax) 0.7 1.1
Share based payments - -
Exceptional items (net of tax) - -
Adjusted earnings for the purpose of adjusted earnings per share (0.3) (0.1)
Number of shares No No
Weighted average number of ordinary shares for the purpose of basic and 23,826,379 23,826,379
adjusted earnings per share
Weighted average number of ordinary shares for the purpose of basic and 23,826,379 23,826,379
adjusted diluted earnings per share
(Loss) per share £ £
Basic loss per share (0.04) (0.05)
Diluted loss per share (0.04) (0.05)
Adjusted Basic and diluted (loss) per share (0.01) (0.01)
7. Non-current assets: Trade and other receivables
Period ended 31 December
2025 2024
(unaudited) (unaudited)
£m £m
Trade and other receivables 3.0 0.6
Accrued income 2.2 1.7
Deferred tax asset 1.3 1.3
6.5 3.6
8. Current assets: Trade and other receivables
Period ended 31 December
2025 2024
(unaudited) (unaudited)
£m £m
Trade receivables 4.4 11.6
Accrued income 5.9 1.7
Prepayments and other receivables 5.4 3.8
15.7 17.1
9. Trade and other payables
Period ended 31 December
2025 2024
(unaudited) (unaudited)
£m £m
Trade payables 2.9 9.6
Accruals and other payables 4.2 2.3
Other taxation and social security 0.3 1.1
Deferred income 9.1 4.0
Corporation tax - (0.1)
Lease liabilities 0.1 0.1
16.6 17.0
10. Creditors: amounts falling due after more than one year
Period ended 31 December
2025 2024
(unaudited) (unaudited)
£m £m
Deferred tax 1.6 3.2
Accruals and other payables 1.9 1.2
Lease liabilities - 0.1
3.5 4.5
11. Share capital
The table below details movements in share capital during the year:
Six-month period ended 31 December
In thousands of shares 2025 2024
000 000
In issue at 31 March 23,826 23,826
In issue at 30 September 23,826 23,826
Allotted, called up and fully paid £m £m
Ordinary shares of £0.10 each 2.4 2.4
Deferred shares of £0.90 each 19.9 19.9
22.3 22.3
The Company did not issue any shares in the six-month period ended 31 December
2025.
12. Related party transactions
The Directors of the Group and their immediate relatives have an interest of
19% (H1 FY25: 19%) of the voting shares of the Group.
13. Events after the reporting date
There are no material events after the reporting period to report.
14. Cautionary statement
This Interim Report has been prepared solely to provide additional information
to shareholders to assess the Company's strategies and the potential for these
strategies to succeed. The Interim Report should not be relied on by any other
party or for any purpose. The Interim Report contains certain forward-looking
statements with respect to the financial condition, results of operations and
businesses of the Company. These statements are made in good faith based on
the information available to them up to the time of their approval of this
report. However, such statements should be treated with caution as they
involve risk and uncertainty because they relate to events and depend upon
circumstances that will occur in the future. There are a number of factors
that could cause actual results or developments to differ materially from
those expressed or implied by these forward-looking statements. The continuing
uncertainty in global economic outlook inevitably increases the economic and
business risks to which the Company is exposed. Nothing in this announcement
should be construed as a profit forecast.
1 (#_ftnref1) Fortune Business Insights - Cybersecurity Market Industry
Report - January 2026
2 (#_ftnref2) IMARC Group - UK Cybersecurity Market Report
3 (#_ftnref3) H1 FY25 results reflect the equivalent 6-month period in the
prior year (i.e. from July to December 2024, with results restated to reflect
the revised revenue recognition policy applied in preparation of the full year
FY25 Annual Report and Accounts.
4 (#_ftnref4) Comparative period data for FY25 reflects the 6-month period
from 1 July 2024 to 31 December 2024, restated in line with the revised
revenue recognition policy applied in the FY25 Annual Report. This will not
correspond to FY25 H1 published interims which relate to the period from 1
April 2024 to 30 September 2024, prepared using the previous revenue
recognition policy.
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. END IR BQLLFQXLLBBQ
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