ECSC Group earnings rise as revenues slip

Cybersecurity service provider ECSC Group said on Thursday that its adjusted EBITDA profit for 2020 was in excess of £0.4m, rising from the breakeven it achieved in 2019.

The AIM-traded firm said the managed detection and response division saw recurring revenue growth of 22% to £2.42m, while group revenue slipped to £5.7m from £5.9m.

It counted 90 new assurance division clients in the year ended 31 December, compared to 118 in the prior 12 months.

Cash at period end totalled £1.12m, up from £0.35m year-on-year, including £0.42m of Covid-19 related medium-term government support relating to VAT and PAYE deferral.

The group said its bank facility of £0.5m remained unutilised.

“Despite the challenges posed by the Covid-19 pandemic, the group made solid progress during the 2020 financial year, and we are particularly pleased to report growing adjusted EBITDA profitability and cash generation,” said chief executive officer Ian Mann.

“The £3m of group revenue in the second half illustrates the recovery in the assurance division following the Covid-19-related impact seen in the second quarter.”

Mann said the continued growth in recurring MDR revenue demonstrated the resilience of the service line, and the company’s effective strategy of winning consulting clients and converting them into long-term managed services clients.

“ECSC is well-positioned in the growing cybersecurity marketplace, and we are now resuming our organic growth strategy and related recruitment activities.”

At 1145 GMT, shares in ECSC Group were up 21.43% at 85p.