Ecsc Share Discussion Threads

[tomps2] 19/3/2019 16:15

ECSC Group PLC investor presentation, at ShareSoc March 13.3.19
by Ian Mann, CEO

This is a really great presentation by Ian. Interesting company in a hot space.

[cerrito] 19/3/2019 09:47

A delayed take of the Prelims and of the sharesoc meeting presentation made by Ian Mann.
Good that ECSC are on the front foot in making presentations such as this and Mello and the AGM will be in London so accessible to more investors than Bradford..though for me there is a value on going to the site to get a better feel of the energy of the company.

No real surprise that the shares have not moved since the results-till yesterday- as they mirror Allenby forecasts made in January.
The headline figures are good but I was hoping for more progress between H1 and H2. H1 revenue was £2.6 m and H2 £2.8m- with a decline in consultancy revenue. I did learn that consultancy tends to be slow in August and around Christmas ie there is some seasonality. That said in 2017 consultancy was much stronger in H2 than H1. PBT was the same in H1 and H2. That said operating cash flow was much stronger in H2 , COGS lower and as per below, we were told that EBITDA improved as the year went on.
Cash position
Said with perhaps too much emphasis that very comfortable with their cash position.
Said that cash generation will follow EBITDA.
Consultancy needs working capital but managed services do not.
They do not have overdraft facilities with Barclays on the basis that do not need them and if in a tight spot could discount invoices.
I did not have the chance to ask if they are held back in their r&d because of cash.
A small point but the decline in Finance Income y-o-y from £6k to £1k when interest rates have gone up suggests that average daily cash balances have declined more than what balance sheet figures show.
See Allenby cash forecasts below.
Personnel
Was clear that getting and retaining good consultants is key and that as both he and his COO are ex consultants they know how to give them TLC.
Interesting that the reason they have their Brisbane operation is that very difficult to get consultants to work nights.
Claimed they had a 90 pc retention rate but did not say how defined.
Other points
While GDPR boosted last year revenue, it is not a one off boost as Boards will continue to focus on this especially when the Information Commissioner starts fining people.
Reminded us that generally speaking enter into a new corporate relationship via a consultancy and the hope to progress to Managed Service Contracts. A consultancy contract would be £5/15k pa and a Managed Services contract £100/£400k over up to a four year period.
Profitability
Said that the EBITDA loss last year was £300k in Q1 and then £200k,£100k and break even in the subsequent three quarters.
Also referred us to the forecasts of Allenby, who produced new ones on March 13. That said, these March 13 forecasts were virtually the same as their previous January 22 2019 forecast. They have an adjusted EBITDA profit of £241k this year and £1020k next year with net cash being £1016K and £1669k respectively.
Whither the SP
Given the general thinness of the market, difficult to forecast. As an example yesterday fell 9p with just a sell of 5k shares and a purchase of 9082 shares.
Last Comment
Ian Mann did make references to the board upheavals mid 2018 which seem to be behind us and hopefully this will be confirmed at the AGM.

[euclid5] 14/3/2019 21:02

They have 650k left as at 31/12/2018

_ _________________________________________
Cash Flow

The cash balance at the start of the year was GBP1.6m. During the year, the cash balance has fallen due to the EBITDA loss (GBP0.87m), capital expenditure (GBP0.15m), and development costs (GBP0.18m).

During the year, the Group received a refund of GBP0.12m from HMRC in respect of a surrender of R&D Tax Credits from earlier periods.

The cash balance at 31 December 2018 was GBP0.65m. The closing cash balance is as budgeted, and together with more active management of the Company's debtors, provides a solid base for the Company's growth plans for the year ahead.

Balance Sheet

The Group's Balance Sheet as at 31 December 2018 had Net Assets of GBP1.04m (2017: GBP2.17m). Retained Earnings and Distributable Reserves as at 31 December 2018 were a cumulative loss of GBP4.91m (2017: cumulative loss of GBP3.68m).

Going Concern

The Directors have assessed the going concern status of the Group by reference to a number of factors. In particular, the Directors have considered the strong rate of growth in the cyber security market; the fact that business continues to attract new clients and is not overly dependent on any single client; the fact that the business continues to retain key staff following the restructuring, the fact that the business has no Corporation Tax liability to HMRC and that the Group has only modest financing facilities which are not subject to financial covenants. Moreover, having reduced the monthly operating losses significantly by way of the cost restructure, the rate of cash burn has also been significantly reduced.

In undertaking their review, the Directors have prepared financial projections for the years ending 31 December 2019 and 2020, a review which assumed continued revenue growth and cost efficiency.

In the event that this revenue and cost performance is not achieved, the Directors have also considered a sensitivity analysis based on lower revenue growth and have formulated contingency plans for this scenario, which enable the Group to preserve its financial resources.

As such, the Directors have concluded that the cash balance at 31 December 2018 is sufficient to fund the ongoing growth and development of the Group and to meet its liabilities as they fall due for at least the next 12 months from the date of approval of the financial statements.

[dibs61] 14/3/2019 20:53

And mustau ‘tap the markets for MORE funds’?

No idea where you gotv’more̵7; from as they haven’t done a SINGLE placing in over two years since the ipo.

Do you guys research anything? Or just come on and post lazy ignorant uninformed trash?

[dibs61] 14/3/2019 20:49

Hamida yes I suppose that’s why they presented to investors at the Sharesociety event last night, because they hate speaking to investors lol you plum.

And you clearly haven’t checked their cash position either because a cash call is absolutely NOT needed.

How to get it so wrong - by hamida.

[mustau] 13/3/2019 08:18

All looks good but agree may tap the markets for more funds.

[hamidahamida] 13/3/2019 07:53

Management is just too arrogant, hates speaking to investors Still losing money so you can bet your bottom dollar they will do a discount placing

[davidosh] 10/3/2019 14:47

Just to let you all know that ECSC will be exhibiting and presenting at the Mello2019 event on 16th/17th May



They will almost certainly be doing two presentations so one in the morning and one afternoon on Friday 17th.

More info and tickets here...

[mustau] 08/3/2019 15:23

Results next week, hoping a few more contracts are mentioned.

[mustau] 25/2/2019 07:38

It will be good, hoping a few contracts announced.

[cerrito] 24/2/2019 11:42

I see they are speaking at a Sharesoc Seminar on March 13 which suggests they will have released their prelims by then( last year they did it on March 13) and perhaps also they are proud of them.

[mustau] 20/2/2019 19:22

Mm’s trying hard to hide trades here, must be news on the way (I hope).

[gbengus50] 31/1/2019 06:18

Ali47fish, Ravinder Bahrain is the ex wife of the CEO and she owns a significant part of the as shares.Results for YE 2018 should be hopefully should be out by 13/03/19.

[ali47fish] 24/1/2019 11:30

who is this ravinder cerrito- and do pepole here think this rise is sustainable

[nobilis] 24/1/2019 11:29

Could be 200p in a week

[nobilis] 24/1/2019 10:39

Be dandy and fine if this went back to 500p

[cerrito] 22/1/2019 10:17

Yes a good news day but as someone who is long and currently wrong the key continues to be what Ravinder Bahra will do with her holding and there is no way of knowing.

[mustau] 22/1/2019 09:35

Taken a few, hopefully correct call!

[hamidahamida] 22/1/2019 08:01

Excellent update time to buy

[cerrito] 17/1/2019 09:05

Delighted that the price has gone up so much but surprised given the figures of £100k pa seem small in light of managed services order book of £2.4m at the Interims and first half 2018 revenue of £770k.
Also note absence of any trading update. I guess the company would say nothing has changed but would be good to explicitly confirm that.

[cerrito] 15/12/2018 16:02

Fall in share price had rather passed me by till I saw the RNS and the price paid. I see that last week’s volume on LSE was officially 14k shares and the week before 12k shares..ie Mathewson’s purchase was half of last week’s volume. Perhaps a lot of other trades going on elsewhere..anyone have any views?
Never sure what it tells us when directors make such token purchases.
As per their website, they still have a large amount of vacancies

[cerrito] 26/11/2018 16:23

Let us hope that Ravinder Bahra has no need/ wish to sell more shares in the immediate future; the reality is that the possibility of more sales will dampen the share price certainly until we get firm news of how the company is doing; I see we had a Trading update this time last year but would not have thought that all that much had changed since the Interims were published on September 11.

[cerrito] 12/11/2018 23:08

Thanks for that, Psharpy and will be interested to read the report.
You are right that the website shows many vacancies-there seem to be --more than the last time I looked but my memory is a bit vague. I guess it is par for the course in this industry. You are right that the board changes have been odd but have no idea if what you suggest is true and if it is, if it is now water under the bridge.
I see that Friday and today were active days in ECSC terms with 10 thousand odd shares traded each day.
I would think this is a dangerous share to short given the low level of trading which reflects, the presence of many EIS investors and the shareholding structure. Of course if either of the two large investors want to sell, heaven knows what will happen to the share price.