Falanx Group Ltd (LON:FLX), the global cyber security and intelligence services provider, has today announced its audited results for the year-ended 31 March 2019.
Financial highlights
· Revenues increased 73% to £5.2m (2018: £3.0m)
· Gross margin increased significantly to 44% (2018: 31%) driven by favourable revenue mix and strong services utilisation
· Contribution from monthly recurring revenue represented 56% of revenue (2018: 62%) with the lower % being attributable to strong growth in professional services. The monthly recurring revenue run rate at 31 March 2019 was £0.24m (2018: £0.19m) and monitoring recurring revenues grew by 91% to £1.0m (2018: £0.52m)
· Adjusted EBITDA loss reduced by 25% to £1.2m (2018: £1.6m), reported loss £1.9m (2018: £2.4m)
· £3.2m future contracted revenues (2018: £2.3m) of which £1.1m (2018: £0.7m) was deferred income
· Debt free with cash balances of £2.4m (2018: £0.9m) following successful institutional share subscription in November 2018
· Loss per share reduced by 53% to 0.58p (2018: 1.24p)
· Shareholders’ funds £7.6m (2018: £5.3m)
Operational highlights
· Strong performance from our core business, Falanx Cyber buoyed by the successful integration and contribution of First Base acquisition
· Strategic partnership with SolarWinds continues to develop with Falanx appointed as the first Threat Monitoring Service Provider (“TMSP”) for the UK, continental Europe and South Africa
· Falanx Intelligence (Assynt) shifted efforts from one-off sales to high-quality recurring revenue income
· Increased customer base by over 10% to 400
· Management team strengthened and well placed for next stage of growth
Post period highlights
· Trading to the end of July 2019 in line with management’s expectations with professional services in Cyber growing by 10% compared with prior year
· New premises in Reading secured as part of planned Cyber expansion and current investment program largely complete
· Successful delivery of Cloud security service with our in-house developed CASB (Cloud Application Security Broker) capability
· Strong pipeline of business in each division from new name and existing accounts
· 50% growth in the Managed Service Providers (“MSPs”) channel since the start of the current year
* Adjusted EBITDA is a non-IFRS headline measure used by management to measure the Group’s performance and is based on operating profit before the impact of financing costs, share based payment charges, depreciation, amortisation, impairment charges and exceptional items.
Mike Read, Chief Executive, said:
“This has been a very busy period for Falanx with a number of operational improvements made and a renewed focus on channelling our efforts towards the most profitable sales opportunities. We have seen strong organic growth across the core areas of our business, and we see growth continuing into the current financial year. We anticipate the SolarWinds partnership to start to bring benefits in the second half of the current financial year as they rollout their product.
The Board has set out its strategy of driving top line growth and reducing costs as it targets cashflow breakeven. We are confident of achieving this goal in the near term as our sales pipeline continues to grow with our enhanced cyber security offering. As a result, the Board views the future with optimism.
There is no doubt that the cyber security market is growing rapidly so it is essential that we focus our efforts on the best near term situations as we seek to increase shareholder value.”
The Company will post its report and accounts for the financial year ended 31 March 2019 together with its notice of AGM in the coming few days and these will be available to download from www.falanx.com, in accordance with AIM Rule 20.
