IT group struggles in first year since going public

Cyber-security group ECSC remains optimistic about its future despite enduring significant losses in a difficult first year as a public company.

The business has struggled to drive growth as quickly as it wanted to, and had told investors it would, which has put it under pressure. Although it achieved growth of 9.5% in 2017, to £4.1m, its losses soared to £3.4m.

“Our first year as a public company has been a period of significant change for the Group,” said ECSC chief executive Ian Mann. “We have delivered on our planned investment and achieved growth, but we have experienced a number of challenges. These have had a detrimental effect on reported performance.

He pointed to significant investment in the business and an increase in head count, including opening a new centre in Brisbane, Australia.

However it is the disappointing growth in revenue, which Mann said was “significantly less than expected in our plans”, that forced the company to take action to slow the rate of cash burn.

ECSC joined the Alternative Investment Market in December 2016 and its share price rose strongly, more than trebling from its float price of 167p within six months. However a series of pessimistic updates saw ECSC’s share price fall back, reaching a low of 90p, before climbing back to trade around its float price.

However Mann remains positive. He said: “I am encouraged that further growth can be achieved in 2018. Our clients continue to recognise the growing importance of cyber security and the market is developing in ways favourable to our skills and offerings.”