Falanx Group Limited Trading Statement (1337I)
31 Marzo 2020 - 12:00AM
UK Regulatory
TIDMFLX
RNS Number : 1337I
Falanx Group Limited
31 March 2020
31 March 2020
FALANX GROUP LIMITED
("Falanx", the "Company" or the "Group")
Trading update
Falanx Group Limited, the AIM listed (FLX.L) provider of cyber
security and strategic intelligence services, today provides an
update as to its expected results for the year ended 31 March 2020
and the impact of the ongoing global COVID-19 crisis.
Trading for the year ended 31 March 2020
The Group has experienced strong trading with circa GBP1m of
significant new orders between December and mid-February in the
Cyber division. These wins are significant as they are in addition
to the usual run rate of the cyber business and are the result of
new high-profile customer wins as well as incremental spend by
existing customers. The Group has also been successful in
cross-selling new services to its existing Penetration Test or
Manage, Detect and Respond ("MDR") customers. These new customer
wins (the majority of the revenue for which will be recognised in
the next financial year), combined with much stronger recurring
revenues in the Assynt strategic intelligence division, result in
the Board expecting to deliver revenues of circa GBP5.9m for the
year ended 31 March 2020 representing growth of 13% on last
year.
COVID-19 impact
In very recent weeks the COVID-19 crisis has begun to
significantly affect the global economy. The protection of health
and welfare of staff is paramount for Falanx and, to that end, in
line with government guidance all employees are now working
remotely. This has been made possible by our technical
infrastructure in addition to our processes and protocols and has
resulted in zero interruption to our service provision. We are,
therefore, fully able to service our clients in this period with no
loss of quality or service.
It is widely reported that the move to homeworking during
COVID-19 will increase the vulnerability of all organisations to
Cyber-attacks, as highlighted by the National Cyber Security Centre
(NCSC) on 16 March 2020. Discussions with our customer base
indicate that they expect to resume spending on cyber
security-related measures once they move away from their immediate
crisis planning, and their home-based working infrastructure has
bedded in. Our Cyber division has put together a 'Rapid Response'
set of measures for newly-distributed networks of home workers (
https://falanxcyber.com/securing-wfh-solutions/ ).
The Company has already implemented, or is in the process of
implementing, certain measures designed to strengthen the Company's
balance sheet and expected cash performance over the next few
months. These include:
-- voluntary salary sacrifices by certain directors, management
and staff. The Company intends to compensate those participating by
the issuance of new share options to those participating at an
option price of 1 penny per share, an uplift of 75% above the
closing price of 0.57 pence per share on 30 March 2020, the trading
day immediately before this announcement. In order to seek to
minimise future dilution to shareholders as much as possible, this
new option pool is to be created partly by the waiver of certain
share options granted in March and December 2018 to directors and
senior managers. Further announcements will be made at the
appropriate time;
-- negotiated deferrals and reductions in property costs as well as other corporate overheads;
-- near elimination of capital expenditure and major reductions to discretionary spending; and
-- use of existing but undrawn banking facilities.
Overall, the Company currently expects to be able to operate
effectively within its existing resources and will closely monitor
the ongoing situation. Recent measures announced by the UK
Government may provide further support. The Company has a solid
base of recurring revenues (circa GBP3m per annum) and these
provide resilience. The Company does not have undue risk associated
with customer concentration or economy sector exposure.
COVID 19 in other countries
The Assynt division is a highly respected strategic intelligence
consultancy specialising in the forecasting and interpretation of
geopolitical business and security risks in emerging markets.
Recent coverage has been extended to include the analysis of
political, security, health and cyber-related risks from the
outbreak of COVID-19 in these markets. Summaries of these reports
are available at https://falanx.com/assynt/covid-19-coverage/.
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/
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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