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:

 

 

Enquiries:

ECSC Group plc
Ian Mann (Executive Chairman)
Matthew Briggs (Chief Executive Officer)

+44 (0) 1274 736 223

Allenby Capital (NOMAD and Broker)
David Hart
Piers Shimwell

+44 (0) 203 3285 656


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/


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:


 

Performance

Indicator

 

Rationale

Jun

2022

(interim)

Dec

2021

(full year)

Jun

2021

(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 existing client contracts

£2.9m

£2.2m

£2.7m

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 property

18%

15%

16%


* 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

Listerhills Science Park

Bradford

BD7 1HR

18 April 2017

Dormant





ECSC Labs Limited

28 Campus Road

Listerhills Science Park

Bradford

BD7 1HR

18 April 2017

Dormant





ECSC Australia Limited

28 Campus Road

Listerhills Science Park

Bradford

BD7 1HR

29 September 2016

Intermediary holding company

 

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

1 Farrer Place

Sydney

NSW 2000

20 March 2017

Provision of professional cyber security services

 

The share capital of each Group entity is as follows:

 

Entity

Ordinary Shares in Issue

Nominal Value

Investment at Cost

1 share

£1

£1

1 share

£1

£1

1 share

£1

£1

100 shares

AUD 1

 AUD 100

 



 

Total



£60

 

* AUD = Australian dollars

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