Falanx losses widen as it invests in opportunities

updated: 3 December 2019 at 1:58pm Author: Josh White

(Sharecast News) - Cybersecurity and intelligence provider Falanx Group reported a 21% improvement in group revenues in its interim results on Tuesday, to £2.64m.
The AIM-traded firm said it saw a 31% increase in sales in its intelligence business unit 'Assynt', to £0.93m, while its Cyber business unit increased 16% year-on-year to £1.71m for the six months ended 30 September.

It said group monthly recurring revenues in September totalled £0.29m, compared to £0.22m a year earlier, while overall recurring revenues comprised 56% of total revenue in the six month period, rising from 53% at the same time last year.

Adjusted EBITDA for the half-year came in at a loss of £0.93m, widening from £0.71m, after £0.3m was "spent in readiness" for the company's major Cyber opportunities.

Cash at period end totalled £0.71m, compared to £0.07m a year earlier, with receivables rising to £1.76m from £1.18m.

The board said the receivables balance had reduced post-period end by around £0.2m, with collections remaining "strong".

It added that its new 'Security Operations Centre' in Reading was now fully operational, and ready to support 'SolarWinds'.

"We are reporting strong revenue growth of 21% for this six-month period during which we have invested to position ourselves for the considerable opportunities for our business," said chief executive officer Mike Read.

"The move to the new premises in Reading has delivered a stronger operational infrastructure for the group as we prepare to support SolarWinds, and we expect this to deliver benefits in the second half of the current financial year as they rollout their product.

"The second half has been historically a stronger period in terms of demand and delivery of our services, and we are delighted that it has started well with increased activity for our Cyber business."

That combined well with the major increase in recurring revenue for the Assynt division, Read said, as it moved into sustainable profitability in recent months.

"The board continues its focus on driving top line growth and reducing costs as it targets cash flow breakeven.

"Demand for our services is increasing as the company sees strong growth in its sales pipeline.

"As a result, the board is confident that the company will deliver on its growth strategy and continues to view the future with optimism."

At 1348 GMT, shares in Falanx Group were down 5.16% at 1.52p.