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Shearwater expects full-year results to be at the upper end

Acquired companies are blossoming under Shearwater's management. This year the acquisitive company has bought Crystal IT Services and GeoLang Holdings
SecurEnvoy, its identity and access management subsidiary, has seen revenues grow strongly since joining the Shearwater Group

Digital technology firm Shearwater Group plc (LON:SWG) expects full-year results to be at the upper end of the board’s expectations.

For the financial year ended 31 March 2018, the company generated unaudited revenues of roughly £6.3mln, reflecting 11 months of trading from SecurEnvoy and eight months of trading from Xcina Consulting.

READ: Shearwater Group shares rise as its portfolio company SecurEnvoy announces partnership with Citrix

Both of its acquired companies have received a turbo-boost since joining the group and the board said it is delighted with the progress.

Since completing the acquisition of SecurEnvoy in May 2017, the business has achieved revenues of £3.4mln, representing 17% revenue growth on AA pro forma basis compared to the pre-acquisition period.

The business expanded its channel partnerships, established its international footprint and continued to develop its software-as-a-service and access management portfolio.

Xcina Consulting, which was loss-making at the time of acquisition in July 2017, is now trading profitably at the EBITDA (earnings before interest, tax, depreciation and amortisation) level and ahead of the board's expectations (as announced previously).

The business has gained more than thirty new customers since joining the group and achieved revenues of £2.9mln, representing pro forma revenue growth of 79% compared to the pre-acquisition period.

Progress seen

"Throughout 2018 we have continued to build upon the transformational steps taken since we launched our new digital resilience strategy. Each of our portfolio companies has made substantial progress since joining the group, and we are delighted that the investment we have made in creating a platform for growth is now starting to benefit our shareholders,” said David Williams, the chairman of Shearwater.

“We are still at the early stage of our development but under Mo's leadership we are confident that we can create a great British company encompassing a wide range of attractive assets within the digital resilience space,” he added, referring to Michael “Mo” Stevens, the group’s chief executive officer.

“Our recent acquisition of GeoLang is showing great promise and the quality of our M&A pipeline suggests that we will have the opportunity to substantially grow, both through further organic growth and potential acquisitions, during this new financial year," he added.

Shares in Shearwater were up 3.5% in mid-morning trading.

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