GRC International Group PLC – Interim Results

GRC International Group plc (“GRC International” or the “Group”), a leading supplier of IT governance, risk management and compliance products and services, is pleased to announce its unaudited interim results for the six months ended 30 September 2019.

  

Financial Highlights

	H1 FY20	H2 FY19	H1 FY19	H1 FY20 to H2 FY19 Change	H1 FY20  to H1 FY19 Change	FY 2019
Billings2	£7,163k	£7,019k	£8,814k	+2%	-19%	£15,833k
Revenue	£7,095k	£6,935k	£8,914k	+23%	-20%	£15,849k
Training	£1,701k	£1,752k	£4,019k	-3%	-58%	£5,771k
Consultancy	£4,195k	£3,472k	£3,756k	+21%	+12%	£7,228k
Software and distribution	£1,199k	£1,711k	£1,139k	-30%	+5%	£2,850k
Total	£7,095k	£6,935k	£8,914k	+23%	-20%	£15,849k
Privacy (Including GDPR)	£2,269k	£2,205k	£4,838k	+3%	-53%	£7,043k
Cyber security	£4,450k	£4,283k	£3,669k	+4%	+21%	£7,952k
Other	£376k	£447K	£407k	-16%	-7%	£854k
Total	£7,095k	£6,935k	£8,914k	+23%	-20%	£15,849k

 

·      Revenue down 20% to £7.1m (H1 2019: (£8.9m) reflecting -53% decline in Privacy (Including GDPR) partially offset by an increase of +21% in Cyber security 

·      Revenue in the first half has grown steadily throughout the period, with Q2 revenue up +12% on Q1 

·      Gross profit down -22% to £4.0m (H1 2019: £5.1m), with margins broadly stable against the comparative period at 56% (H1 FY19: 57%) 

·      Steady Improvement in gross margin through the H1 FY20 reporting period from 55.8% in Q1 to 59.4% in Q2 

·      Underlying EBITDA¹ loss reduced to £1.4m (H1 FY19: £1.8m loss) (H2 FY19: £2.5m loss) reflecting a reduction in overhead costs predominantly due to a reduction in headcount and associated headcount related overhead 

·      Underlying EBITDA¹ loss improved from £(1.0)m in Q1 to £(0.4)m in Q2 

·      Basic loss per share of 3.37p (H1 2019: Basic loss per share: 3.76p)  

·      Since acquisition in March 2019, DQM has traded profitably 

·      Capital expenditure of £0.6m (H1 2019: £1.5m) 

·      Net Cash (being cash less bank overdraft) at period end of £0.3m (FY 2019: £0.1m). Borrowings (excluding both bank overdraft and lease obligations) at period end of £1.3m (FY 2019 £0.0m)

Operational Highlights

·      Strong organic growth of +21% in the Group’s cyber security products and services versus H1 2019. Cyber security now represents 62.7% of Group revenues 

·      Increase in Cyber Security Revenue at a rate higher than the decline in GDPR revenue with a substantial improvement in Q2 

·      Increase in productivity, through reduction in headcount in line with the demand profile 

·      Recurring revenue services are now generating 30% of our monthly billings, in comparison to 10% in FY19 

·      Regional businesses continue to grow with increased revenues

¹ Underlying EBITDA is defined in the Financial Review contained within this announcement

² Billings equate to the total value of invoices raised and cash sales through the Group’s websites. This figure does not take account of accrued or deferred income adjustments that are required to comply with accounting standards or revenue recognition

Commenting on the results, Alan Calder, Chief Executive Officer, said:

 

“The macro economic climate in H1, with customers’ ongoing worries about Brexit and the overall macro-economic malaise continued to provide challenges for the Group. Against that background the Group continues to grow revenue and has returned to positive EBITDA monthly performance by the period end.

 

We are pleased with the strong growth from cyber security products and services. Investments we have made in the previous year in new business areas and geographies, have started to bear fruit. This gives us the momentum to deliver revenue growth and underpin our long-term growth into FY20 and beyond.”