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ECSC Group confirms swing to profit in first half, highlights continued progress

The cybersecurity group highlighted a "strong recovery" in revenues for its Assurance division into the second half, adding that earnings profitability has also continued

ECSC Group PLC - ECSC Group confirms swing to profit in first half, highlights continued progress

ECSC Group PLC (LON:ECSC) has confirmed a swing to profit in the first half of its current year amid what it said were record levels of recurring revenues and orders for its managed detection and response (MDR) division.

In its results for the six months ended June 30, 2020, the cybersecurity firm reported adjusted underlying earnings (EBITDA) of £52,000, swinging from a £184,000 loss in the prior year, while revenues remained relatively steady at £2.61mln compared to £2.63mln in 2019.

WATCH: ECSC Group reports first half profit and strong growth in managed services

The EBITDA performance confirms a trading update issued by the company in early August, while the group also said MDR recurring revenues had jumped 25% to £1.17mln while the division’s order book expanded to £2.9mln from £2.7mln.

ECSC reported that revenues in its Assurance division, which covers testing, standards and certification services, had risen by 4% to 1.24mln in the first half.

Post-period, the group reported a “strong recovery” in revenues for Assurance, which it said were 33% higher than the second quarter average in July, while total bookings for the division in mid-September were 75% higher than the first-half average. ECSC also said adjusted EBITDA profitability has continued.

"We are delighted to report a return to Adjusted EBITDA profit with record levels of recurring revenues and orders within our Managed Detection and Response division, partly driven by an increase in cybersecurity incidents as organisations have accelerated the existing trend towards remote and cloud working during the [coronavirus] pandemic," ECSC chief executive Ian Mann said in a statement.

The CEO also highlighted uptake in the company’s partnership programme, with 120 registered partners now generating over 160 sales opportunities by the end of the first half, which had made a “material contribution to revenue”.

"We have so far exceeded our stated objective of maintaining a break-even Adjusted EBITDA position throughout the [coronavirus] crisis. We remain focused on our strategy of growing our Managed Detection and Response division in order to build our recurring revenue streams and target this fast-growing sector of the market … In summary, ECSC is well-positioned in the growing global cybersecurity marketplace, and we look forward with confidence to delivering improved operating results and shareholder value”, Mann added.

Quick facts: ECSC Group PLC

Price: 72.5 GBX

LSE:ECSC
Market: LSE
Market Cap: £7.26 m
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