More crime and political instability a good thing for Falanx Group

Cyber defence and intelligence provider Falanx Group updated the market on its current trading on Thursday, reporting that full year trading for the 2017 financial year was in line with management's expectations.

The AIM-traded firm said it enjoyed “robust” revenue increases across all lines of business, driven by geopolitical instability, rising levels of crime and increasing regulatory requirements.

It said total Falanx Group 2017 revenue of £2.7m was up 50% year-on-year from £1.8m in 2016.

The Falanx Intelligence unit continued to grow profitably, the board said, with over 70 blue chip clients demanding business intelligence, security consultancy and intelligence products.

It said the business unit generated revenue of around £1.8m and EBITDA of £0.3m for the 2017 financial year, with revenue for 2017 up by 13% compared with the £1.59m generated in 2016.

At Falanx Cyber Defence, the customer base grew to 29 “significant” clients, consuming a mixture of consulting, assessment and monitoring services.

The business unit generated £1m of revenue, doubling in the second half of the financial year, the board said.

Falanx Cyber Defence also became 'UK Govt CHECK' accredited during the year, which the board said opened the door to a “highly significant” proportion of Her Majesty's Government Cyber Assurance spend.

The Falanx Cyber Technologies division saw its MidGARD 'security-as-a-service' platform go live in late March, gaining early adoption amongst Falanx Cyber Defence clients, including an unnamed major IT cloud services company.

Revenue would be generated from the product in the 2018 financial year, Falanx said.

It added that the development of MidGARD gave Falanx ownership of proprietary monitoring IPR, apparently cementing the company's position as a “highly competitive”, managed cyber defence services provider, where current barriers to entry were prohibitively expensive to all but the largest providers, according to the board.

The Falanx management team and board were “significantly” strengthened during the year as well, with the business having now evolved into a “fully integrated” cyber defence and intelligence provider.

“This has been a genuinely transformational year for Falanx Group,” said chairman Mike Read.

“The Falanx team has delivered on our promise to generate outstanding growth and develop new technology.

“We have also capitalised on our excellent relationships and highly regarded services to significantly enlarge our client base.”

Read added that the foundations were now in place for a profitable year of “robust” growth.