Shearwater Regulatory News (SWG)

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.

2 November 2021

Shearwater Group PLC

("Shearwater", or the "Group")

Trading Update

Increase in underlying EBITDA in line with expectations

Shearwater Group plc, the organisational resilience group which provides cybersecurity, advisory and managed security services, is pleased to provide an update on trading for the six months ended 30 September 20211, ahead of the publication of the Group's Interim Results in late November.

For the traditionally quieter first half of the year, the Group expects to report encouraging underlying EBITDA2 growth, up 19% year-on-year to £1.3m in H1 FY22 in line with the Board's expectations (H1 FY21: £1.1m).

This growth is driven by an improved underlying EBITDA margin of 12% (H1 FY21: 10%), reflecting the increasing proportion of higher margin software and advisory revenue within the revenue mix. Revenue for the first half of the year is expected to be £10.6m (H1 FY21: £11.2m). In line with the Group's historical trends, c.50% of H2 revenue is either already contracted or anticipated to be generated through renewals.

The Group has a strong balance sheet with unaudited net cash of £4.4m as at 30 September 2021 (30 September 2020: £3.0m) following the repayment of £1.1m of VAT deferrals during the period (£0.2m remaining). The Group continues to benefit from an undrawn revolving credit facility of £4.0m.

Demand for Shearwater's offering has remained high across the Group. Particularly pleasing has been the continued rebound in advisory work, with the advisory businesses' pipelines now back to pre-COVID levels. 

New customers secured during the first half included a UK university and a number of public sector organisations, with cross-sales between Group businesses also having continued and a number of significant contract renewals concluded.

Phil Higgins, Chief Executive Officer of Shearwater Group PLC, commented:

"Confidence levels are high across Shearwater, reflecting both the level of business won in the first half of the year but also the increased activity levels at our clients. Demand for our cybersecurity, advisory and managed security services remains robust as the marketplace develops."

1All figures are unaudited

2Underlying EBITDA is defined as profit before tax, before one off exceptional items, share based payment charges, finance charges, impairment of intangible assets, fair value adjustments to deferred consideration, contingent consideration depreciation and amortisation.

Enquiries:

About Shearwater Group plc

Shearwater Group plc is an award-winning group providing cyber security, managed security and professional advisory solutions to help 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 across the globe 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.