Wednesday 11 September 2019

ECSC H1 stalls on cyber consultancy sales drop

ECSC H1 stalls on cyber consultancy sales dropAIM-listed ECSC Group stuttered in the first half of the year, with total H119 revenue flat at £2.6m following a strong FY18 when the company was one of the UK’s fastest growing cyber security suppliers. The Bradford-headquartered firm’s adjusted EBITDA loss shrank from £490k in H118 to £190k this time around while pre-tax losses too fell to £558k from £817k the year before.

The two sides of ECSC’s business exhibited very different levels of performance though. Turnover from managed security services (MSS) jumped 63% yoy to £1.2m while consultancy revenue declined 23% to be worth the same amount. Sales of third-party vendor security products halved to £87k as ECSC deliberately shifted its revenue mix in favour of MSS provision.

Chief executive Ian Mann cited “temporary uncertainty” in the UK market (where ECSC does 99% of its business) for the drop off as public and private sector organisations delayed consultancy projects. This was likely induced by the original 31st March Brexit deadline and subsequent postponements, combined with an inevitable drop off of GDPR-related advisory activity after the May 2018 compliance deadline.

Better fortunes are predicted in the second half of 2019 with ECSC revealing record levels of consulting bookings in Q3/Q4. July was certainly a good month with revenue jumping 42% yoy to be worth £620k.

In the current political climate only time will tell if UK businesses now feel sufficiently confident in the future to unlock further cyber security consultancy spend over the rest of the year. But TechMarketView has noted what looks like sufficiently sharp market growth in MSS to keep ECSC and other providers buoyant in the meantime (subscribers to TechMarketView can read our Cyber Security Supplier Ranking 2019 report here).

Posted by: Martin Courtney

Tags: results   consulting   H1   ECSCGroup   managedsecurityservices   cybersecurity  

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