Return to growth for listed cyber-security group

Bradford-based cyber-security group ECSC said it “made good progress” in 2021 despite recording a pre-tax loss of £520,000.

It had a positive adjusted EBITDA, of £165,000, but depreciation and amortisation of £400,000, share-based payments totalling £100,000 and exceptional items of £145,000 dragged the bottom line down.

ECSC chief executive Ian Mann said: “The group made good progress during the 2021 financial year, and we are pleased to report a return to growth in both divisions, and continued to be adjusted EBITDA positive.

“Responding to the Covid-19 pandemic, the Group re-engineered its sales and delivery processes to reflect and cater for the new working patterns of our clients, with a renewed focus on our core strengths and expertise.

“As a result, we have been able to deliver increased value to our clients in preventing, detecting, and responding to cyber security breaches, with a marked increase in sales across both divisions.”

He noted that about 95% of the company’s consultation work is still being carried out remotely, demonstrating that working practices have still not got back to normal.

“In the prior year we had stopped expansion but we’re now back to recruiting,” he added.

“We are seeing some impact from wage inflation and skills shortages, but it does mean that if clients are finding it hard to recruit people they’ve more need of specialists like us.”

Mann said while it was difficult to see which particular sectors are bouncing back fastest from the pandemic, he could identify those individual companies which have shown the strength of their business model amidst the tough environment.

“For our business, we’re seeing companies come to us who’ve neglected their cyber security then had a breach,” he said.

“Also, for example, we’re working with a housing association which has seen a lot of other housing associations getting hit by hackers.

“But companies are more likely to suffer a breach when they’ve made a mistake, rather than because someone has set out to hack them.

“And while businesses associate Russia with being a source of hacking attacks, we don’t necessarily see that the Russia Ukraine conflict will lead to more cyber security breaches.

“It will focus minds though – it’ll be another driver for people to say, ‘we shouldn’t put off that cyber security programme we’ve been discussing.'”