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ECSC Group – 2017 results, further share price decline – you were warned

By Steve Moore | Tuesday 13 March 2018


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.


Cyber security services group ECSC (ECSC) has announced results for 2017 including noting “corporate decision-making cycles have been longer than anticipated”, but with CEO Ian Mann arguing “following a year of transformation, ECSC now has a platform to pursue the opportunity in the cyber security market”. Hmmm…

The results show a significantly increased loss on revenue 9.5% higher, at £4.1 million, as planned investment was delivered but the planned growth not. Despite arguing a “still-evident market opportunity” and “the absolute priority for ECSC now is higher and faster revenue growth”, 2017 saw “cost restructuring executed in the final quarter”.

Hmmm. That anything to do with the balance sheet then I wonder?...

This showed cash down by £3.4 million to £1.6 million and current assets over liabilities down by the same amount to £1.4 million (with also £0.5 million of (non-current asset) property, plant and equipment). Cost restructuring to “better match the market opportunity” or just delaying cash crunch ahoy for a bit then?

With all this just 15 months since listing on AIM to “expedite the execution of our detailed growth strategy”, natch the current stance here remains sell / avoid.


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