LONDON (Alliance News) - Security and risk management consultancy Falanx Group Limited has a significant pipeline of business in place, with its contract with QinetiQ Group PLC set to generate GBP2.5 million in revenue per annum, it said in its maiden results as a listed company Friday.
"Admission to AIM has given the company additional gravitas in our target markets and we are already seeing the benefit of this, in particular in the Middle East. We have further expanded our pipeline of work throughout the region," John Blamire, chief executive, said in a statement.
Blamire, a former officer in the British Army, also is keen to support Falanx's growth by making acquisitions: "In addition, flotation has allowed us to move ahead with our acquisition strategy and we are in discussion with a number of potential partners - each offering a specialist capability," he added.
Falanx Group is hoping to ride the wave of some USD30 trillion it expects the Middle East and Asia to spend on security in the next five years, and it said its new projects include bids for large-capacity building contracts, as well as a security implementation programme for a major infrastructure project in the Middle East.
Meanwhile, Falanx said it was in advanced discussions with five companies as potential acquisitions, with the internal expectation being that the first of these will be made in early 2014. The targets include profitable, niche security providers across its business divisions, it said.
Falanx said its March acquisition of political and security risk intelligence provider Stirling Assynt has provided it with its first significant revenue stream. Stirling Assynt signed in May a GBP2.5 million three-year deal with QinetiQ to restructure and retrain a major Middle East government department, though the figures have not been included on Falanx's maiden income statement.
Falanx said its Resilience division was involved in advanced discussions with government and corporate clients for a large security project in a Middle Eastern country and two significant capacity building projects in a North African country, neither of which country it named.
The division's bid to upgrade ministerial buildings in the Middle East, mentioned in its AIM-admission document, is expected to be formally agreed later in 2013, with the first revenues to follow in the first-quarter of 2014, Falanx said.
Falanx's Technology division could also benefit from two potential acquisitions, which include a "highly successful" technical security firm and an anti-blast material supplier. Falanx also said it obtained exclusive licences for some advanced blast-mitigation products, including blast protective window blinds for which it says it is the sole licensee in the Middle East and parts of Asia.
The security company's cyber security division is in partnership talks with four companies which would allow it to purchase a controlling stake in three of these companies after a period of six months, enabling Falanx to monitor progress in three of them before making a decision to go through with the purchase of a controlling stake.
As a newly established company, Falanx has no trading history in the 2013 financial year, so its financial statement included figures based on Stirling Assynt's activities before its acquisition by Falanx, though these figures do not include any revenues from the QinetiQ contract. Falanx said the results do not represent the full extent of its current business.
Falanx reported a GBP73,774 pretax loss for the period between August 23 and March 31, all of which came from administrative expenses. There were no revenues recorded.
Falanx was admitted to AIM on June 20. Its IPO raised GBP595,000 through a placing of 5.0 million shares, representing about 13.24% of the company's share capital. On September 19 it raised a further GBP225,000 through a subscription of 1.9 million shares.
Falanx shares were Friday quoted at 12.25 pence, unchanged.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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