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By Tom Winnifrith | Thursday 8 February 2018
Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
As it happens, I reckon that Falanx (FLX) shares, which we own, are a stand out buy as well after yesterday's superb news. My thoughts will follow in due course. First up is the joint broker, Beaufort, with its thoughts and its video interview with boss Mike Read.
Falanx, the global intelligence, security and cyber defence provider, this morning announced that it has won a new 3-year Managed Service contract worth £700,000 of revenue from an “award-winning UK Top 20 International law firm”. The contract is for Falanx to provide MidGARD service, a recently launched cyber threat detection & response platform, to deliver advanced security monitoring of the client’s entire global estate.
In addition to this, the company also announced the expansion of existing Managed Cyber Security Service contract value from £250,000 to over £380,000 (3-year contract). Falanx’s Chairman and CEO, Mike Read, commented “Our pipeline of similar opportunities continues to grow and I look forward to announcing further contracts in the near future”.
Our view: Another contract wins from Falanx! It demonstrates growing momentum for MidGARD from multinational corporate clients, validating that its unique offering is adequately fulfilling client needs and superior than competing services. Today’s new contract and contract expansion further increases Managed Services as a proportion of total revenues, improving the quality and visibility of its future recurring revenue.
Falanx remain funded in the near-to-medium-term and we expect organic cash flows likely to grow strongly during FY19 to achieve positive underlying EBITDA. We maintain our Speculative Buy rating on the shares with a target price of 10p.
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