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I have to say MrBBD I am at a loss about their reporting skills. Lots of new companies seem perfectly capable of reporting an operating loss in the light of transitional costs and scaling up (necessary preparation for ambitious growth)and highlighting the growth that they have achieved as an opportunity. It is very strange. Why did they set such high expectations anyway for the first year? The real opportunity is 2018- companies are massively behind in getting up to speed on cybersecurity- there's a cultural complacency and institutional failure here- companies not wanting to invest until the last minute. I guess it isn't very pertinent of any new company to criticise their client base so they would need to choose their words carefully. But this is a widely reported problem- Lloyds research shows only a fraction of directorates understand their obligations for cybersecurity. I am also however, sadly, wondering about the advice they're getting. Nigel Terence Payne, non exec director (done very well from the early rapid share rise) also advises or has recently advised another 7 companies that I have found. He has 'resigned with immediate effect' from two according to RNS'. Interesting to note the experience of one of them, EG Solutions- recently agreed a buyout from Verint Solutions. Last year they reported a profit warning- due to 'lower than expected' profits and revenue. Then a series of high profile contract wins begin to be published, one after another. Decent growth and relatively good profits -up 52%, but from a low baseline- similar market cap, and revenue to our guys- quite easy to achieve in a high growth context. Then an upgrade to full year forecasts and away goes the share price- up and up. I am at a loss to understand why I am having to recognise the obvious advantage of this stock- the FT tipped it in Feb/March, recognising GCHQ and Barclays as clients. GCHQ are the lead agency for the UK cyber-security strategy. Why aren't they saying something about it? Who bangs on about every small problem ('focusing on our better performers')? No mention that they won an award for 'best employer of the year' this year in a climate where they are competing for the best people and expanding their staff base rapidly? No mention that they won the 2017 best payment protection provider? They are an authorising body for CREST- they approve those who want to be able to offer CREST- a key industry standard. They manage to undermine the fact that they are growing? If you grow in a BtoB service you're getting new clients? Do they get a mention- even by sector? We know they've got big players on board already. Feeling cynical MrBBD. I don't think I'll stay long in this investment business.
Agreed, I say FLX a much better bet, these muppets couldn't sell tea to China and so for me feels like moving tables on the Titanic!
Tricky - Appreciate your points and what you are saying..The interim report however leaves me wondering, in this age of increased cybersecurity being of utmost importance, with GDPR and Brexit (and even North Korea!), why are ECSC having trouble converting sales pipelines into sales & contracts. So much so they have stated they are having these issues in the interim report and not only this, they mention that the company has identified costs that can be reduced and/or efficiencies can be achieved, but this will still not help them completely achieve its EBITDA target for the FY. Thats the bit for me. At the end of H1, ECSC are stating they will not achieve the FY year target. Question is why? Especially when the Cybersecurity market is booming? Definitely GLA.
Company growing good post
Say ECSC bargepole stock. Cut your losses and enter more exciting FALANX! Just an idea to make winnings back...
Maybe it's too soon to point out that this company is actually growing- 9% organic revenues; 14% consulting revenues and 13% managed services. Pretty much in line with or exceeding the predicted annual growth for UK cybersecurity companies though not as fast as they had originally forseen immediately. Demand is also up. Unsurprising that sales conversion wasn't as fast as hoped when they have doubled the size of their workforce and expanded to new sites including one in Australia. They won the 2017 award for best in class for payments protection and it isn't their clients who are being hacked- a fate recently experienced by one of their big competitors (Deloitte's). They are a CREST accreditation body which is required for the forthcoming cybersecurity regulations requiring all big companies to ensure protection or face fines of 4%. The loss to company's reputation is even more expensive as Equifax etc have discovered to their cost. As a GCHQ provider they are well positioned at the forefront of the UK cybersecurity strategy to grow more substantially next year when the rest of our UK companies finally get round to paying for the cybersecurity support and protection they will be legally obliged to ensure.
er, run that by us again Mr Durex...
Soundingoff - Agreed there. Dont belive the MCAP is a true value of the business. Currently �12m for the company and the total sales were only �2-4m last year, none of which is really RMR/long term revenue. Im expecting the SP to go below 100p. Currently asking of 140p is a big ask by the Traders!
I've no idea why they floated it when they did, far too early IMO. It needs to drop further, then it has potential for me.
Omedone - Bet you feel like a plonker now. How is your 376p SP?
Buying in is a brave move. Look at the fundamentals of the business. Unfortunatelty for ECSC they have been victims of Share Rampers and the hype around GDPR, the NHS malware infection and general cybersecurity worries. They are probably regretting going public on the AIM. There share price has gone from over 500/550p to 100p in 6x months. Interim H1 report and the business is reporting it will miss its yearly targets, buy in at your peril. Expecting further SP drops IMHO.
Looks like nobody's going to discuss the elephant in the room which is the shocking results then? Treat it like good news and the problem will go away?
...chance of a profit with the spread though.
Good opportunity to buy in and top up
I see the Guardian have revealed that Deloitte's were hacked for several months from Nov 2016 only revealing the problem in March with huge numbers of emails and passwords in the states being stolen. They've had to bring in other experts to remedy the problem. So maybe Deloitte's aren't the world's number 1 cybersecurity firm any more then?
https://www.ft.com/content/dcfa6430-9bb4-11e7-8cd4-932067fbf946 This is a link from the FT today about Equifax's big overnight hit to their shares after a data breach affecting millions. They are being sued by one of their clients. UK firms can expect fines to increase from the current max of £0.5 million to £4 million once the new cybersecurity legislation comes into force- announced for May next year.
I'm holding onto this share because of the EU regulation for all big companies to be cybersecurity resistant which is coming in by May 2018 (which the UK government have confirmed they are adopting as UK legislation). Interesting that Barclays bank recently resisted the spate of hacking afflicting big banks this Summer (for some reason I'm having trouble posting links to articles on this site so you'll have to DYOR of course). Barclays are an ECSC client as are GCHQ who are leading the UK government cybersecurity strategy. The government are meant to be publishing more about standards and expectations for cybersecurity this October or November. It seems very obvious that a lot of our blue chip companies need to be much more cyber security aware. The damage reported to Equinax this week is one more in the list of reminders to companies to get on top of this for the sake of their own reputations -cybersecurity is a necessary investment- data breaches are much more expensive to put right after the event aren't they? I think shorters have had a complete laugh with this share. The profit warning was in the context of a strategy to grow fast- they were already in a good place with over 10% of FTSE companies on their books and a growing international presence. The CEO is ex GCHQ. They say they have a bigger pipeline than before the IPO- they had a problem converting it fast enough to meet expectations. Could be seen as a victim of their own success really. Very hopeful that this will come good in the coming months.
Hopefully a steady rise now until interim results at the end of the month.
rise today. Long may it continue.
with so few shares it goes the other way just as fast, a couple of large trades this afternoon and it will swing back. I've followed this a long time and it has always been the same. Current target price is 350p. GLA
Cannot see of any reason for the sudden fall so have bought in at just under 165. Price seems to be all over the place at the moment.
Taking a bit of a hit today, any reason?
Much appreciated Kingsandqueens. You're right - it is a good sign. I called them a week ago too, and the representative confirmed that they are incredibly busy and the sales are increasing. He wouldn't say anything that would be classed as inside info, just that the outlook was positive. It satisfied me enough :)
when a company does actually come back to you I take it as a good sign!! K&Q
Steve, "Thank you for getting in touch with your concerns, we appreciate you taking the time to contact ECSC. As I am sure you are aware, unfortunately we cannot share any new information with you that has not yet been publicly released to the market, but the Company will update on its progress in due course. ECSC's financial half year ended on 30 June 2017, and as such you can expect that the Company will be reporting its half yearly report over the coming few weeks. As mentioned in the June trading statement, the Board is pleased with new sales pipeline generation and remains confident of the long-term success of the business. We can assure you the Management team remain extremely focused on capitalising on the strong cyber security market that you mentioned, and accelerating the growth of the Company. " hope this helps GLA