Shares in Shearwater Group PLC (AIM:SWG) dropped 18% to 50.53p after the cybersecurity services company reported solid underlying growth but heavy one-off costs that diverted investor attention from the solid outlook for the business.
Revenue for the 15-month period to 30 June 2025 rose 62% to £39.5 million, equivalent to annualised growth of 29%, while adjusted EBITDA nearly doubled to £2.2 million.
The group posted an adjusted pre-tax profit of £0.6 million versus a loss a year earlier, supported by a strong performance in its services division and new long-term contracts with major telecom clients worth more than £20 million combined.
However, statutory results were hit by £11.3 million of exceptional charges, including £11.1 million in goodwill and intangible impairments. Without these items, results would have slightly exceeded expectations.
Chief executive Phil Higgins said the company enters FY26 with optimism, citing robust demand for cybersecurity amid rising threat levels and a growing sales pipeline supported by a debt-free balance sheet and £5.1 million in cash.
The shares had risen 64% thus far this year, from 38p to 61.5p before the results, which sent them sliding back.