Falanx Group Limited
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Description
The Falanx Group assists clients in assessing, developing and managing their global IT frameworks, policies and procedures against cyber threats. The Group provides professional and consulting services as well as advanced managed detection and response (MDR) services to identify potential attacks and to resolve breaches of security when they occur. Falanx works with government departments within the UK, major corporations, airlines, banks and international non-governmental organisations (NGOs). Falanx has two main business segments: The Cyber Division and the Intelligence Services Division.
Our view
Falanx has established itself as a trusted advisor in the cyber security sector through the high-quality execution of its cyber services proposition, based on a methodology and set of processes that have been built up over many years, enabled by strong technology and experienced analysts. The Falanx Group offers an opportunity to invest directly in the growing cyber security market while gaining exposure to the benefits of M&A consolidation in a fragmented segment, led by an experienced team with a proven track record.
Financial Summary
Year end: March (£m unless shown)
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| Revenue | 1.8 | 2.7 | 3.0 | 7.1 | 9.3 |
| Adj EBITDA | -2.3 | -1.2 | -1.6 | 0.2 | 1.0 |
| Fully Adj PBT | -2.6 | -1.7 | -1.7 | 0.1 | 0.9 |
| Fully Adj EPS (p) | -3.8 | -1.5 | -0.6 | 0.0 | 0.3 |
Profit & Loss
Year end: March (£m unless shown)
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| Revenue | 1.8 | 2.7 | 3.0 | 7.1 | 9.3 |
| Adj EBITDA | (2.3) | (1.2) | (1.6) | 0.2 | 1.0 |
| Adj EBIT | (2.3) | (1.3) | (1.7) | 0.1 | 0.9 |
| Reported PBT | (2.6) | (1.7) | (2.5) | (0.3) | 0.6 |
| Fully Adj PBT | (2.6) | (1.7) | (1.7) | 0.1 | 0.9 |
| NOPAT | (2.6) | (1.6) | (1.7) | 0.1 | 0.9 |
| Reported EPS (p) | (3.8) | (1.5) | (1.6) | (0.1) | 0.2 |
| Fully Adj EPS (p) | (3.8) | (1.5) | (0.6) | 0.0 | 0.3 |
| Dividend per share (p) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Cash Flow & Balance Sheet
Year end: March (£m unless shown)
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| Operating cash flow | (1.9) | (1.3) | (2.1) | 0.5 | 2.0 |
| Free Cash flow | (1.9) | (1.8) | (5.9) | (0.2) | 1.4 |
| FCF per share (p) | (2.8) | (1.6) | (3.6) | (0.1) | 0.8 |
| Acquisitions | (0.5) | (0.1) | 0.0 | (0.1) | 0.0 |
| Disposals | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Shares issued | 2.5 | 1.8 | 6.3 | 0.1 | 0.0 |
| Net cash flow | 0.0 | (0.3) | 0.5 | (0.2) | 1.4 |
| Overdrafts / borrowings | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Cash & equivalents | 0.4 | 0.4 | 0.9 | 0.7 | 2.1 |
| Net (Debt)/Cash | 0.4 | 0.4 | 0.9 | 0.7 | 2.1 |
Nav & Returns
Year end: March (£m unless shown)
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| Net asset value | 0.4 | 0.8 | 4.7 | 4.5 | 5.1 |
| NAV/share (p) | 0.6 | 0.7 | 2.9 | 2.8 | 3.1 |
| Net Tangible Asset Value | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 |
| NTAV/share (p) | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Average equity | 0.2 | 0.6 | 2.8 | 4.6 | 4.8 |
| Post-tax ROE (%) | (769.3%) | (266.8%) | 3.3% | 19.2% | |
Metrics
Year end: March (£m unless shown)
| 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|
| Revenue growth | 51.1% | 10.1% | 134.8% | 31.5% | |
| Adj EBITDA growth | (47.1%) | 30.1% | 1034.1% | 466.3% | |
| Adj EBIT growth | (45.8%) | 30.8% | 1919.8% | 877.2% | |
| Adj PBT growth | (36.1%) | (1.8%) | 1922.3% | 877.2% | |
| Adj EPS growth | (60.5%) | (57.6%) | 1937.9% | 904.7% | |
| Dividend growth | N/A | N/A | N/A | N/A | |
| Adj EBIT margins | (46.1%) | (54.8%) | 1.3% | 9.5% |