Falanx Group Ltd (LON:FLX), a cyber defence and intelligence service provider working with blue chip and government clients worldwide, has today announced its interim results for the six months ended 30 September 2017.
The Board is pleased to announce robust growth and believes Falanx is on track to deliver against markets expectations of achieving profitability in the year.
Period Highlights
Financial
· Continued growth across all service lines with significant growth in revenue year on year
o Group Revenue +18% increase
o Cyber Revenues +40% increase
o Intelligence Revenues +9% increase
· Cash balance of over £1m on 30th Sept 2017 (Sept 2016: £0.8m)
· Balance sheet entirely equity financed and debt free
· Oversubscribed placing of £2m of equity in May 2017 used to undertake acquisitions, seed the development of MidGARD and augment growth
Operational
· Launch of MidGARD, our proprietary Advanced Threat Detection platform at the UK’s leading ethical hacking conference, resulting in highly positive industry feedback
· Acquisitions of Cloudified Ltd and AuditSec Ltd, increasing market reach and proprietary IP embedded in MidGARD
· Appointment of highly experienced Director of Intelligence division and an industry leading Chief Technology Officer of Cyber division, further strengthening the management team
Outlook and Strategy
Cyber
The MidGARD monitoring business model represents the latest innovation in advanced threat detection and security incident and event management. It brings together big data analytics and external intelligence aggregation, backed up with our own live Security Operations Centre based in the UK, manned by UK Security Cleared Staff. This generates predictable recurring revenues over multi-year customer contracts. These contracts have attractive margin and cash generation attributes. Our investment in this Cloud based platform allows a high level of operational leverage and scalability to support expected customer growth and high customer retention rates are expected.
The board believes therefore that such a platform can deliver strong cash generation against a demand fuelled by powerful market and regulatory drivers. As a result, our acquisition strategy so far has been to obtain complimentary cyber service businesses, such as Consulting and Assessment, which results in demand for Monitoring services being cross-sold into the MidGARD platform.
Intelligence
Falanx Assynt covers geo-political intelligence in 35 countries and regions, corporate business information and due diligence and has intelligence staff embedded within our clients’ own offices. It has delivered organic growth of 9% over the six months to September 2017. With the arrival of a new Managing Director in late July, together with an enhanced senior team, the capacity to drive the level of organic growth over the next year is greatly enhanced.
Client retention in the Assynt Report business and embedded analyst service remains very high with the addition of two additional high profile clients in the past six months, provides clear visibility of forward revenue. The Intelligence Consulting business continues to enjoy strong growth, generating additional revenues from individual assignments
Mike Read, Chairman and Acting CEO of Falanx Group Ltd, commented: “The advent of the General Data Protection Requirement (GDPR) and the need for corporates to be compliant is further fuelling a growth Cyber market. Combined with rapidly increasing corporate migration to Cloud based applications, increasing costs of in-house IT and security solutions and a growing cyber ‘skills gap’ in the UK, we continue to view market conditions for our Cyber services as highly favourable for the foreseeable future.
“Our intelligence business under its product name Assynt has been extremely busy. This is driven by the continued unrest in the world and the need for our research team to brief our customers on all the activities in a timely manner. More multinational customers are now seeing the need for regular briefings to protect their people and operations worldwide.
“We believe our strategies have positioned the Company well, against highly attractive market opportunities and our business model will generate long-term, growing, cash flows to drive shareholder value.”