Falanx Group Limited Trading Statement (1359V)
05 August 2020 - 4:00PM
UK Regulatory
TIDMFLX
RNS Number : 1359V
Falanx Group Limited
05 August 2020
5 August 2020
FALANX GROUP LIMITED
("Falanx", the "Group" or the "Company")
Trading Update
Falanx Group Limited (FLX.L), the AIM listed provider of cyber
security and strategic intelligence services, announces a trading
update for the year ended 31 March 2020 together with a Q1
update.
The Company expects to report revenues for the year ended 31
March 2020 in the region of GBP5.8m (2019: GBP5.2m). The Cyber
division won 42 new customers in the period and the Assynt
strategic intelligence division benefitted significantly from the
rollout of major contracts.
The Company also updates on its trading for the quarter ended 30
June 2020. Despite the disruption caused by COVID-19 and its impact
on the delivery of certain aspects of consultancy work, as well as
wider economic factors, revenues were approximately 5% ahead of
those for the same period last year. Sales orders were lower in
April and May but began to accelerate from June onwards as
organisations respond to Cyber security issues of working from home
and its increased risk profile. The Board is pleased that this
increase in sales has continued into the second quarter of the
financial year.
Falanx Assynt, the Group's strategic intelligence division, has
been trading consistently profitably on the back of its strong
recurring revenue contracts with global companies. Overall monthly
recurring revenues comprised circa 94% of its total revenues. The
Group was recently recognised by Chambers & Partners as one of
the leading global political risk advisory firms in the UK.
Overall costs have been reduced and a portion of Falanx staff
furloughed as the Group's move to a remote home environment has
proved successful. This has enabled the Group to exit premises
leases in July 2020 located in Sussex and London, resulting in the
Group HQ being located at its Reading office. Overall, the Group's
total monthly expenditure (cost of sales, capex, exceptional &
opex) each month has been reduced by approximately 30% in the same
period in 2019. For additional context, the Group's average monthly
revenues in the final six months of the year ended 31 March 2020
exceeded the current monthly cost base on an operating level.
Whilst there has clearly been some impact of COVID on the Group's
recent revenues, its overall EBITDA loss in Q1 FY21 was reduced
significantly by 60%. Furthermore, the bulk of the Group's
investment programme was completed in 2019 and its Cloud technology
platform 'Furnace' was spun out in December 2019, further reducing
the monthly cash expenditure.
The Group's Cyber division's order book recovered strongly in
July with sales order values for the month being greater than the
total for the first quarter. Overall, the pipeline of potential
business remains strong.
At 30 June 2020 cash balances stood at GBP0.75m following
favourable working capital movements customer payments. Debtors and
creditors (including HMRC) are within agreed terms, and banking
facilities of up to an additional GBP0.5m remaining unused.
Enhanced offering for Managed Detection and Response ('MDR')
Falanx Cyber has been providing a MDR service for years now
which is based upon underlying technologies with an additional
service offering. As a result, businesses can benefit from a
Managed Service as opposed to acquiring the technology and
deploying it themselves, without the requisite skills to interpret
the output from the technologies.
The Company is pleased to announce the launch of its
significantly enhanced MDR service, Triarii. Triarii has been
created using a combination of best of breed and enterprise-class
external components. This service delivers superior capabilities
greatly enhancing the Group's MDR service and making it
market-leading in all respects, yet still at a competitive price
point. This supports the Group's mantra of offering
'enterprise-class security solutions to all businesses, whatever
the size'.
Following extensive internal and customer trials, Triarii is now
either deployed or being deployed with 4 customers including
Managed Service Providers.
Following successful trials, the Group's largest partners are
showing significant interest in Triarii with a view of deploying it
into their customer bases, providing a robust pipeline of
opportunities for the service. This pipeline includes the
previously announced SolarWinds channel, which has accepted the
Triarii service for use within its community, having been invited
to join their Technology Alliance Partner Program, which makes
third party solutions available to all of its MSP partners.
In conjunction with the launch of the service, the Group will
shortly be launching its new website to promote and inform
customers as to the value of all Falanx Cyber services, including
Triarii. In the short-term a brief teaser for the site is available
at: https://falanxcyber.com/triarii-register-your-interest/
Notice of results
Prior to COVID-19m the Group had anticipated to release results
in July 2020. However the logistical process of the audit with BDO
LLP, which is currently underway, means that the Group now expects
full year results for the year ended 31 March 2020 to be released
towards the end of September 2020. The Board will continue to
monitor this timeline and update as necessary.
Enquiries:
Falanx Group Limited Via IFC
Alex Hambro Chairman
Mike Read CEO
Ian Selby CFO
Stifel Nicolaus Europe Limited,
Nomad and Joint Broker
Alex Price / Fred Walsh + 44 (0) 207 710 7600
Turner Pope Investments (TPI) Limited,
Joint Broker
Andy Thacker/Zoe Alexander +44 (0) 20 3657 0050
IFC Advisory Ltd, Financial PR &
IR
Graham Herring / Zach Cohen +44 (0) 203 934 663
About Falanx
Falanx Group Limited, is a global intelligence and cyber defence
provider working with blue chip and government clients. For more
information: http://www.falanx.com/
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END
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