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FLX Falanx Group Limited

0.525
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Falanx Group Limited LSE:FLX London Ordinary Share VGG3338A1075 ORD NPV (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.525 0.50 0.55 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Falanx Group Limited Interim Results (9306N)

01/11/2016 7:01am

UK Regulatory


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TIDMFLX

RNS Number : 9306N

Falanx Group Limited

01 November 2016

Falanx Group Limited

("Falanx" or "the Company")

INTERIM RESULTS AND

UNAUDITED FINANCIAL STATEMENTS

FOR THE SIX MONTHS PERIODED 30 SEPTEMBER 2015

Falanx Group (AIM:FLX), the global intelligence, security and cyber defence provider, is pleased to announce its interim results for the six months ended 30 September 2016.

Highlights

-- Significantly increased Cyber revenue to c.GBP0.3m, growth of 1130% and now contributing materially to the business after its start-up investment period.

   --     Increased Intelligence revenue to c.GBP0.9m, growth of 17%. 
   --     Successful acquisition of ASC Ltd, a fast growing and respected Cyber Security consultancy. 

-- Integration of ASC and Falanx businesses has yielded meaningful cost reductions, yielding annualized savings of cGBP350k.

-- Raised GBP1.5m in May 2016 by way of a GBP1m equity placing and GBP0.5m in convertible loan notes.

   --     Cash balance of GBP830k at 30 September 2016. 
   --     Strong new Cyber orders and pipeline. 

Post-period highlights

-- Appointment of Stuart Bladen as CEO. Stuart was previously Executive Chairman of Vistorm Ltd, a specialist cyber company and Head of UK Public Sector and Middle East for Hewlett-Packard.

-- Unsolicited subscription for GBP0.75m of equity at market price and without attached warrants allowed for repayment in full of convertible loan notes dated May 2016.

   --     The company now goes forward on a debt free basis. 

Outlook

The Cyber market is still growing strongly, driven by significant cyber threats, growing regulation, and frequent publicity on security breaches. In light of this growth, the ASC acquisition has broadened our Cyber portfolio, and is delivering new sales often with multiple services. This is promoting broader client engagement and annuity revenue. To meet the scale of growth, Falanx Cyber is moving to a new Security Operations Centre (SOC) in Birmingham City Centre. This will refresh and expand our capacity, whilst lowering unit cost for real estate and staff.

Cyber Defence orders and pipeline are extremely strong in the Financial Services sector, bringing on board clients as prestigious as Vanquis Bank, part of the Provident Group, and working with partners such as Nasstar Plc to take our services to an ever growing market. Our Intelligence division is also expected to continue to expand, providing steady organic growth above 15% with the greatest contribution of revenue being generated by long-established and highly respected 'Blue Chip' clients. In order to meet client demand in all areas we are planning a significant recruitment push, this will in turn underpin our continued drive to positive cash flow from operations next year. As such, we plan to meet H2 needs for expanded working capital from the recent equity subscription.

Stuart Bladen, CEO of Falanx Group, commented:

"I am delighted to join Falanx Ltd as CEO. I did so because I believe Falanx is well positioned within a rapidly growing market. My primary focus is to accelerate our strategy and deliver on the extremely promising foundations I have found in Falanx and the exciting opportunity that exists. I will focus in particular on expanding our client relationships and on building high quality efficient delivery teams to help Falanx to grow profitably".

Kyle Augustin, IT and Change Director, Vanquis Bank, commented;

"We have been pleased to engage with Falanx this year, they have provided us with valuable strategic cyber services helping us to improve our security and systems"

Nigel Redwood, CEO of Nasstar Plc, commented:

"We are in early stage planning to establish a long term partnership with Falanx Group in order to access and develop the excellent growth opportunities in the UK Cyber Security market"

Enquiries:

 
 Falanx Group Limited               via Walbrook PR 
  Stuart Bladen, Chief Executive     www.falanxgroup.com 
                                     www.falanxassuria.com 
                                     www.falanxcyberdefence.com 
 Panmure Gordon (UK) Limited 
  Nominated Adviser & Joint 
  Broker 
  Andrew Godber / Peter 
  Steel                             +44 (0) 20 7886 2500 
 Whitman Howard Limited 
  Joint Broker 
  Nick Lovering / Francis 
  North                             +44 (0) 207 659 1234 
 Walbrook PR (Media and             +44 (0) 207 933 8780 
  Investor Relations) Paul           falanx@walbrookpr.com 
  Cornelius / Nick Rome 
 

About Falanx

Falanx Group Limited, is a global intelligence and cyber defence provider working with blue chip and government clients. The Group listed on AIM in June 2013 under ticker FLX For more information: http://www.falanxgroup.com/

MAR

This announcement contains inside information for purposes of Article 7 of Regulation (EU) No 596/2014

CHAIRMAN'S STATEMENT

I am pleased to report that we continue to strengthen the company and the Board to grasp the growth opportunities within the Cyber and Intelligence markets.

Trading for the six months to 30 September 2016 was in line with management expectations with revenue for the period of c.GBP1.2m, which is an increase of 54% compared to revenues achieved for the same period last year. During the period, the Company continued to focus on developing core cyber security skills to address the significant market opportunities. Furthermore, the Company has now successfully integrated the recent acquisition of ASC.

The Company benefited from increased revenue, with a significant increase in Cyber Security services and a very solid half year in Intelligence services.

Segmentally, revenue for the six months to 30 September 2016 was as follows:

- Intelligence revenue for the period of c.GBP0.9m, an increase of 17% compared to revenues achieved for the same period last year

- Cyber revenue for the period of c.GBP0.3m, an increase of 1130% compared to revenues achieved for the same period last year and reflects that this unit is now contributing to the overall business after its start-up investment period.

On 3 October 2016, the Company announced it had successfully strengthened its balance sheet through an equity subscription to raise GBP0.75m (gross) and the early redemption of outstanding Loan Notes held by Darwin Capital Ltd. A final repayment of GBP577,500 has been made to Darwin Capital Ltd.

Board Changes

As previously notified on 17(th) October: Stuart Bladen has been appointed as CEO of Falanx Group. John Blamire continues to serve on the Board as an executive director, working alongside Stuart in developing new markets, strategic opportunities and development of the Company's core offering. Stuart joins Falanx with a view to further driving cyber security and intelligence opportunities, as the Company builds on the momentum achieved following the streamlining of operations earlier this year. A key focus for Stuart will be to ensure that the Company continues to take advantage of the growing opportunities across the cybersecurity and intelligence markets and further develop its enlarged product suite, which was enhanced by the acquisition of Advanced Security Consulting Limited ("ASC") in May 2016. Stuart has a deep understanding of the Cyber Security industry, in particular the arena of consulting and managed security services. As Executive Chairman of Vistorm Limited, Stuart doubled the company's size to 400 staff and annual turnover of GBP120m. Vistorm was a provider of consulting, managed security services and network solutions to companies needing a specialist security partner and is now HP Information Security UK Ltd, part of the Hewlett Packard group. Stuart's past track record also includes leadership roles at Hewlett Packard as Vice President of UK Public Sector and for the Middle East, Mediterranean and Africa, where he managed a US$2Bn+ turnover operation. In addition he has held senior roles at EDS, Hitachi, Unisys and PwC where he led teams of up to 18,000 people with business units delivering revenue of more than US$3Bn.

As notified on the 1(st) November: Iain Manley retired as Non-Executive Director from the Board of Falanx Group with immediate effect.

M Read

Chairman

RESULTS

Turnover for the six months ended 30 September 2016 was GBP1.2m (2015: GBP0.79m) with Falanx Intelligence's revenue improved at GBP0.9m (2015: GBP0.77m) and Falanx Cyber's revenue very significantly improved at GBP0.3m (2015: GBP0.03m). The loss before taxation decreased to c.GBP730k (2015: GBP1.3m).

The Group's cash balance at 30 September 2016 was GBP0.83m (2015: GBP1.2m), prior to the post period repayment of loan notes of GBP0.58m and equity subscription of GBP0.75m.

FALANX GROUP LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS PERIODED 30 SEPTEMBER 2016

 
                                6 Months      6 Months      Year 
                                 to            to            to 
                                30 Sep        30 Sep        31 Mar 
                                 2016          2015          2016 
                                (Unaudited)   (Unaudited)   (Audited) 
 
                                GBP           GBP           GBP 
 Continuing operations 
 Revenue                        1,212,784     792,430       1,815,394 
 Cost of sales                  (1,224,181)   (858,032)     (1,875,689) 
-----------------------------  ------------  ------------  ------------ 
                                (11,397)      (65,602)      (60,295) 
 
 Administrative expenses        (636,026)     (1,236,118)   (2,582,988) 
 Exceptional item               -             - 
 Operating Loss                 (647,423)     (1,301,720)   (2,643,283) 
 
 Finance income                 163           283           373 
 Finance expense                (82,500)      (8,000)       (8,149) 
-----------------------------  ------------  ------------  ------------ 
 Net finance expense            (82,337)      (7,717)       (7,776) 
 Loss before income tax         (729,760)     (1,309,437)   (2,651,059) 
 Income tax expense             -             -             16,880 
-----------------------------  ------------  ------------  ------------ 
 Loss for the period from 
  continuing operations         (729,760)     (1,309,437)   (2,634,179) 
-----------------------------  ------------  ------------  ------------ 
 
 Total comprehensive loss 
  for the period                (729,760)     (1,309,437)   (2,634,179) 
-----------------------------  ------------  ------------  ------------ 
 
 Earnings per share 
----------------------------   ------------  ------------  ------------ 
 Basic earnings per share 
  - continuing and total 
  operations                    (0.74)p       (1.95)p       (3.79)p 
 Diluted earnings per share 
  - continuing and total 
  operations                    (0.74)p       (1.95)p       (3.79)p 
-----------------------------  ------------  ------------  ------------ 
 
 
 

FALANX GROUP LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2016

 
                                    6 Months     6 Months     Year to 
                                     to           to 
                                    30 Sep       30 Sep       31 Mar 
                                     2016         2015         2016 
                                    (Unaudited)  (Unaudited)  (Audited) 
 
                                    GBP          GBP          GBP 
Assets 
Non-current assets 
Property, plant & equipment         110,717      69,821       59,441 
Intangible assets                   773,508      227,874      495,771 
Deferred tax                        2,887        -            2,887 
                                    887,112      297,695      558,099 
----------------------------------  -----------  -----------  ----------- 
Current assets 
Inventory                           43,718       56,044       41,175 
Trade and other receivables         791,387      907,215      529,686 
Cash and cash equivalents           834,742      1,211,914    430,132 
                                    1,669,847    2,175,173    1,000,993 
----------------------------------  -----------  -----------  ----------- 
 
Total assets                        2,556,959    2,472,868    1,559,092 
----------------------------------  -----------  -----------  ----------- 
 
Equity 
Capital and reserves attributable 
 to equity holders of the 
 Company 
Share premium account               6,647,257    5,289,771    5,309,031 
Translation reserve                 (85,538)     (18,139)     (42,162) 
Shares to be issued reserve         174,851      91,875       174,851 
Retained earnings                   (5,732,553)  (3,678,051)  (5,002,793) 
Total equity                        1,004,017    1,685,456    438,927 
----------------------------------  -----------  -----------  ----------- 
 
Liabilities 
Current liabilities 
Trade and other payables            1,532,793    773,419      1,120,165 
Current tax liability               20,149       -            - 
Deferred tax liability              -            13,993       - 
                                    1,552,942    787,412      1,120,165 
----------------------------------  -----------  -----------  ----------- 
 
Total liabilities                   1,552,942    787,412      1,120,165 
----------------------------------  -----------  -----------  ----------- 
 
Total equity and liabilities        2,556,959    2,472,868    1,559,092 
----------------------------------  -----------  -----------  ----------- 
 
 

FALANX GROUP LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                           Share       Retained      Translation   Shares     Total 
                            premium     earnings      reserve       to be 
                                                                    issued 
                                                                    reserve 
                           GBP         GBP           GBP                      GBP 
 
 Balance at 1 April 
  2015                     2,841,787   (2,368,614)      (29,224)     91,875       535,834 
 Loss for year                     -   (2,634,179)             -          -   (2,634,179) 
 Transactions with 
  owners: 
 
 Issue of share capital    2,662,259             -             -          -     2,662,259 
 Cost of share capital 
  issue                    (195,025)             -             -          -     (195,025) 
 Translation of foreign 
  subsidiary                       -             -      (12,938)          -      (12,938) 
 Share options issued              -             -             -     82,976        82,976 
 
 Balance as at 31 
  March 2016               5,309,031   (5,002,793)      (42,162)    174,851       438,927 
------------------------  ----------  ------------  ------------  ---------  ------------ 
 
 Loss for the period               -     (729,760)             -          -     (729,760) 
 Transactions with 
  owners: 
 
 Issue of share capital    1,374,271             -             -          -     1,374,271 
 Costs of issue of 
  share capital             (36,045)             -             -          -      (36,045) 
 Translation of foreign 
  subsidiary                       -             -      (43,376)          -      (43,376) 
 
 Balance as at 30 
  September 2016           6,647,257   (5,732,553)      (85,538)    174,851     1,004,017 
------------------------  ----------  ------------  ------------  ---------  ------------ 
 

FALANX GROUP LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIODED 30 SEPTEMBER 2016

 
                                     6 Months      6 Months      Year 
                                      to            to            to 
                                     30 Sep        30 Sep        31 Mar 
                                      2016          2015          2016 
                                     (Unaudited)   (Unaudited)   (Audited) 
                                     GBP           GBP           GBP 
 Cash flows from operating 
  activities 
 Profit/(Loss) before tax              (729,760)   (1,309,437)   (2,651,059) 
 Adjustments for: 
 Depreciation                             15,908        10,984        22,746 
 Amortisation of intangibles             156,452        72,293       309,396 
 Share based payment                      35,000             -        82,976 
 Loss/(Profit) on disposal 
  of property, plant and 
  equipment                                  697             -         (109) 
 Net finance expense/(income) 
  recognised in profit or 
  loss                                    82,337         7,717         7,776 
                                       (439,366)   (1,218,443)   (2,228,274) 
 Changes in working capital: 
 (Increase)/Decrease in 
  inventories                            (2,543)           933        15,802 
 (Increase)/Decrease in 
  trade and other receivables          (169,674)     (247,056)       130,473 
 Decrease/(Increase) in 
  trade and other payables               324,675     (192,105)       154,641 
----------------------------------  ------------  ------------  ------------ 
 Cash used in operations               (286,908)   (1,656,671)   (1,927,358) 
 Interest paid                          (82,500)       (8,000)       (8,149) 
----------------------------------  ------------  ------------  ------------ 
 Net cash used in operating 
  activities                           (369,408)   (1,664,671)   (1,935,507) 
----------------------------------  ------------  ------------  ------------ 
 
 Cash flows from investing 
  activities 
 Interest received                           163           283           373 
 Acquisition of property, 
  plant and equipment                   (60,659)      (10,841)      (12,414) 
 Disposal of property, 
  plant and equipment                          -             -           300 
 Acquisition of subsidiary             (140,315)             -             - 
 Acquisition of intangibles                    -             -     (505,000) 
 Net cash used in investing 
  activities                           (200,811)      (10,558)     (516,741) 
----------------------------------  ------------  ------------  ------------ 
 
 Cash flows from financing 
  activities 
 Net Proceeds from issue 
  of shares                            1,018,205     2,447,974     2,467,234 
 Net cash generated from 
  financing activities                 1,018,205     2,447,974     2,300,833 
----------------------------------  ------------  ------------  ------------ 
 
 Increase/(decrease) in 
  cash equivalents                       447,986       772,745        14,986 
 Cash and cash equivalents 
  at beginning of the period             430,132       428,084       428,084 
 Foreign exchange profit/(losses) 
  on cash and cash equivalents          (43,376)        11,085      (12,938) 
----------------------------------  ------------  ------------  ------------ 
 Cash and cash equivalents 
  at end of the period                   834,742     1,211,914       430,132 
----------------------------------  ------------  ------------  ------------ 
 
 

FALANX GROUP LIMITED

NOTES TO INTERIM FINANCIAL STATEMENTS FOR THE PERIODED 30 SEPTEMBER 2016

   1.   General information 

Falanx (the "Company") and its subsidiaries (together the "Group") operate in the security and intelligence markets.

The Company is a public limited company which is listed on AIM on the London Stock Exchange and is incorporated and domiciled in the British Virgin Islands. The address of its registered office is PO Box 173, Road Town, Tortola, British Virgin Islands.

   2.   Basis of preparation 

These interim statements have been prepared on a basis consistent with International Financial Reporting Standards (IFRS). They do not contain all of the information required for full financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 March 2016. These interim financial statements do not constitute statutory accounts within the meaning of the Companies Act.

The interim financial information have not been reviewed nor audited by the auditors. The interim financial information was approved by the Board of Directors on 31 October 2016. The information for the year ended 31 March 2016 is extracted from the statutory financial statements for that year which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The audit report was unqualified.

The accounting policies applied by the Group in these interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended and as at 31 March 2016. The interim report is the responsibility of, and has been, approved by the Directors. The Directors are responsible for preparing the interim financial statements in accordance with the AIM rules for Companies.

   3.   Critical accounting estimates and judgements 

The preparation of financial information in accordance with generally accepted accounting practice, in the case of the Group being IFRS as adopted by the European Union, requires the Directors to make estimates and judgements that affect the reported amount of assets, liabilities, income and expenditure and the disclosures made in the financial statements. Such estimates and judgements must be continually evaluated based on historical experience and other factors, including expectations of future events.

The significant judgements made by management in applying the Group's accounting policies were the same as those applied in the last annual financial statements for the year ended 31 March 2016.

   4.   Segmental reporting 

The Directors consider that the Group's internal financial reporting is organised along product and service lines and, therefore, segmental information has been presented about business segments. The segmental analysis of the Group's business was derived from its principal activities as set out below. The information below also comprises the disclosures required by IFRS 8 in respect of products and services as the Directors consider that the products and services sold by the disclosed segments are essentially similar and, therefore, no additional disclosure in respect of products and services is required. The other segment below and overleaf is made up of the parent company's administrative operation.

Reportable segments

The reportable segment results for the year ended 30 September 2016 are as follows:

 
                                                     Other 
                          Intelligence   Cyber        segments   Total 
                          GBP            GBP         GBP         GBP 
-----------------------  -------------  ----------  ----------  ------------ 
 Revenues from 
  external customers      882,465        325,291     5,028       1,212,784 
-----------------------  -------------  ----------  ----------  ------------ 
 Total revenue            882,465        325,291     5,028       1,212,784 
-----------------------  -------------  ----------  ----------  ------------ 
 Operating expenses       (733,739)      (627,414)   (326,695)   (1,687,848) 
 Finance costs 
  - net                   45             -           (82,382)    (82,337) 
 Depreciation and 
  amortisation            (5,734)        (166,297)   (328)       (172,359) 
 Segment profit/(loss) 
  for the period          143,037        (468,420)   (404,377)   (729,760) 
-----------------------  -------------  ----------  ----------  ------------ 
 

The reportable segment results for the year ended 30 September 2015 are as follows:

 
                                                                  Other 
                          Intelligence   Resilience   Cyber        segments   Total 
                          GBP            GBP          GBP         GBP         GBP 
-----------------------  -------------  -----------  ----------  ----------  ------------ 
 Revenues from 
  external customers      766,037        -            26,393      -           792,430 
-----------------------  -------------  -----------  ----------  ----------  ------------ 
 Total revenue            766,037        -            26,393      -           792,430 
-----------------------  -------------  -----------  ----------  ----------  ------------ 
 Operating expenses       (666,702)      (25)         (876,996)   (467,150)   (2,010,873) 
 Finance cost - 
  net                     15             -            -           (7,732)     (7,717) 
 Depreciation and 
  amortisation            (5,918)        -            (77,359)    -           (83,277) 
 Segment profit/(loss) 
  for the period          93,432         (25)         (927,962)   (474,882)   (1,309,437) 
-----------------------  -------------  -----------  ----------  ----------  ------------ 
 

Segment assets and liabilities as at 30 September 2016 and capital expenditure for the year then ended are as follows:

 
                                                 Other 
                        Intelligence   Cyber      segments   Total 
                        GBP            GBP       GBP         GBP 
---------------------  -------------  --------  ----------  ---------- 
 Total assets           994,098        817,758   745,103     2,556,959 
 Liabilities            611,700        171,618   769,624     1,552,942 
 Capital expenditure    1,129          58,111    1,419       60,659 
---------------------  -------------  --------  ----------  ---------- 
 

Segment assets and liabilities as at 30 September 2015 and capital expenditure for the year then ended are as follows:

 
                                                              Other 
                        Intelligence   Resilience   Cyber      segments   Total 
                        GBP            GBP          GBP       GBP         GBP 
---------------------  -------------  -----------  --------  ----------  ---------- 
 Total assets           806,209        40           880,006   786,612     2,472,867 
 Liabilities            462,175        151,007      112,819   61,411      787,412 
 Capital expenditure    3,947          -            6,894     -           10,841 
---------------------  -------------  -----------  --------  ----------  ---------- 
 
   5.   Earnings per share 

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

 
                                  6 Months      6 Months      Year 
                                   to            to            to 
                                  30 Sep        30 Sep        31 Mar 
                                   2016          2015          2016 
                                  (Unaudited)   (Unaudited)   (Audited) 
 
 Loss attributable to equity 
  holders of the company (GBP)    (729,760)     (1,309,437)   (2,634,179) 
 Weighted average number of 
  ordinary shares in issue        99,123,798    67,238,391    69,441,528 
 Basic (loss)/profit per share 
  (pence per share)               (0.74)        (1.95)        (3.79) 
-------------------------------  ------------  ------------  ------------ 
 

As at 30 September 2016, the potentially dilutive ordinary shares were anti-dilutive because the Group was loss-making.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LFLLXQBFLFBQ

(END) Dow Jones Newswires

November 01, 2016 03:01 ET (07:01 GMT)

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