Ecsc Share Discussion Threads

[harlowdavood] 02/7/2022 05:37

Gooch leaving immediately suggestsrither I'll health or a fall out with senior management. She was on renumeration committee and had a three month notice period.

[maddox] 01/7/2022 11:03

Ian Mann has about 23% of the firm so has plenty of skin in the game.

[bdbd11] 01/7/2022 10:13

Ian Mann was topping up at 80p, so why not at 40p? Closed period perhaps? If not it is a worry.

[maddox] 01/7/2022 09:23

Hi Cerrito,

Clearly the market sentiment is weighing heavily - there aren't too many bright spots.

Cybersecurity isn't a discretionary purchase for businesses so we should see resilience and hopefully progress in the coming Trading Update. There was a lot of expectation over cyber attacks emanating from the Ukraine invasion that should have kept the risk at the top of Director's Risk Committee Agendas.

Regards Maddox

[maddox] 01/7/2022 08:55

I never regarded Elizabeth 'Coz I'm worth it' Gooch - an asset to ECSC, having watched her in her previous career. No loss IMHO.

[cerrito] 30/6/2022 14:42

Silly me for not selling.
Do not get good vibes from Gooch resigning seemingly out of the blue
and without explanation. She may well feel that continued
association with ECSC was sullying he reputation.

[cerrito] 06/6/2022 22:32

I do not see myself making the AGM, especially if there are rail strikes.
I have gone through the AR.
My first reaction was its length 112 pages which seems OTT for such a small company and must be a barrier for small companies to list. I could not find on their websites their previous AR’s so no idea if they were bigger or smaller.
The following caught my eye
Page 12 I thought Lucy Sharp’s report read well.
Page 25 I saw the useful increase YOY in gross profit from the Assurance and decline in MDR but could find no good explanation of what drove these or indeed what business is in the assurance division and what in the ECR division.
Page 27 Be interesting to see if their EBITDA performance was good enough in H1 so they can increase their loan facility and begs the question as to why they need the funds.
Page 29 Note two risks have increased-economic conditions and hiring- the rest are no change and no risks have decreased.
Page 39 I see that the Chairman spends at least two working days a month on ECSC which I thought should be sufficient, even though he doubles up as Company Secretary. I see on page 42 that both he and Gooch attended all board meetings.
Page 43 A very stable shareholder base and indeed the last change of holdings RNS we had was way back in May 2020 after the latest equity issue. One concern I have had and continue to have is what would happen if either Unicorn or Ravinder Bahra wanted to exit. Fingers crossed that both remain if not happy at least satisfied and have no pressing need for cash. As an aside I have just been on the LSE website and seen since close of business on May 25 there have just been 4 transactions with a combined value of £12k in these 6 trading days…granted we did have the jubilee break but even so.
Page 46 I see that directors ‘remuneration as a whole fell from £829k to £731k, as one very highly paid director left, in the context that group expenses on employee benefits went up from £4.7m to £5.3m. The increase in expenditure at a group basis understandable given industry trends and no doubt there will be a big increase in 2022. This means that in 2021 directors’ remuneration was 14% of total-a bit high perhaps and certainly better than the 2020 figure of 18%. Note that as per page 87 total average number of employees was 87.
Given that in the IMC and other shareholder meetings Ian Mann gives the impression that ECSC is a one man band, I was pleasantly surprised that the differential between his and Lucy Sharp’s remuneration was as low as it was in 2021 and indeed in 2020 they had virtually identical remuneration.
Page 47 Let’s hope for all our sakes that the share options of the directors are in the money.
Page 80 Probably good that no single client accounts for more than 10% of the revenue.
Page 82 I note the reduction in contract liabilities. Given that it was inferred that the amount of 3 year contract work was increasing, this seems counter intuitive. Any views anyone
Page 86 Sobering but realistic that no deferred tax asset created quote because the Board envisages that a significant period of time will be required to generate sufficient profits to utilise the trading losses carried forward unquote…the trading losses being £5.4m
Page 89 Concerned that so few additions to the computer equipment. Anyone understand how the net book value of computer equipment has gone up from £68k to £658 k during 2021???
Page 97 Not only are the terms of the loan facility very onerous but we learn that there was a 1% fee payable.
Page 106 Interesting no share options were granted in 2021.
Conclusion
Not one of my better decisions to buy ECSC and well done to those who exited at the start of the year. I am suffering the consequences with the share price at current levels. Not sure what will provoke an uptick. Cannot see who would buy them. Any trading improvement will be a hard slog and the loan facility shows their lack of financial flexibility. I note that Allenby are currently forecasting a PBT loss this year 2022 of £308k up from last year’s loss of £277k. My last purchase was in July 2020.While not a Yorkshireman, I will show Yorkshire stubbornness and hang on with the marcap at £9m.

[bluepill] 29/4/2022 08:53

About to pop? RNS due? Anyone? Anyone?

[bluepill] 29/4/2022 08:35

MMs walking up the offer, they want your shares.

[bluepill] 28/4/2022 13:28

My buys not showing. Is volume really this low? Something going on. Leaky?

[daz] 28/4/2022 10:39

Anyone know the reason for the rise today, has it been tipped somewhere?

[bdbd11] 24/3/2022 17:25

Today's presentation is worthwhile watching if you missed it. While not setting the world alight, the business appears solid with an excellent reputation. Downside risk appears to be limited. Yes, they could and perhaps should be growing faster but they are at least steadily getting there. In terms of the an investment case, the current valuation of under 1 year's turnover seem's ridiculously cheap. Therefore imo a share price of circa £1.50 is entirely possible without them doing much more than they are doing already.

[jane deer] 23/3/2022 14:33

ECSC needs to start showing it can generate free cash flow. The current environment (despite the cost pressures) should be pretty conducive for the business. I don't think a significant equity raise is that feasible given the shareholder base.

Around £700k of the negative cash flow in FY2021 is the unwind from the Covid support - so underlying cash outflow is not so bad. But still in FY22 ECSC will need to find another £290k to finance the new loan interest plus repayments.

[2lb] 23/3/2022 09:56

Weak results indicating a likely need for cash over the coming months

[harlowdavood] 23/3/2022 08:55

Expect spin!!!

[cerrito] 23/3/2022 07:27

An uninspiring set of results, for me best seen in fact that Gross Profit stagnant despite an increase in revenue.
Plan to watch the IMC tomorrow.

[cerrito] 26/1/2022 23:29

When the prelims come out we will need to see what happened to cash in H2 as pretty spooky that net of the new loan they only had £170k in cash at year end.
Will be interesting to see in the AR if we are told how many fees BOOST charge in addition the the 9%.
I note no figure given for adjusted ebitda profit..the similar TU this time last year said in excess of £400k.
They should have the management infrastructure to cope with organic growth/
Given their shareholder base and current share price an equity raise not really feasible.
All in all does not inspire me to buy more.

[thirty fifty twenty] 07/11/2021 11:50

thanks Cerrito.

i have still have no responses, despite chasing.

for me, from this i infer that they lack an attention to detail - how can their IR email account not be monitored??

i've watched the presentations and whilst they talk much about the opportunities in cybersecurity, they dont seem keen to answer my specific questions about some of the figures in their accounts and notes.

this share and mgt has too much risk for me despite the attraction of the sector.

all IMHO, DYOR + BoL
I will be selling out next week

[cerrito] 06/11/2021 19:52

I have just seen this.
Pre pandemic they came to many investor presentations and post pandemic they have been pretty good so I have never had to contact them specifically.

[thirty fifty twenty] 20/10/2021 09:48

hi - i hold a small position here but from my screens it was identified as very undervalued. however, i have tried to contact the company and then chased them but no reply to my queries. have others had better dialogue or similar non response?
thanks
tft

[maddox] 12/10/2021 10:23

'GDPR fines reach almost €1 billion in Q3 - Update 4 October 2021

The General Data Protection Regulation (GDPR)'s €984.47 million euro fines in the third quarter of 2021 was almost 20 times higher than the combined total of Q1 and Q2, and triple the total amount of fines in all of 2020, according to a Finbold report.

By country, Luxembourg accounts for the highest cumulative fines at €746.07 million from 11 cases, followed by Ireland at €225 million tally. Italy ranked third, paying €86 million from 92 cases.'

This should be keeping cyber security top of the agenda for Company Execs.

[cerrito] 28/9/2021 22:20

One thing that struck me about the Allenby forecast is that next year they have sales increasing very well to £7.9m but still at break even on an adjusted PBT basis.
Maddox: I appreciate he is a big shareholder and that he is of an age where succession planning is an issue, My life experience has been that organizations with a domineering boss are not long term very successful.
Indeed as a TPG shareholder I have had a very recent experience of this,

[maddox] 24/9/2021 14:47

I take your point, but we also know what happened when he wasn't part of the picture - so a picky point IMHO. He's also massively aligned with a 23% shareholding and won't be looking to retire anytime soon, so I'm fairly relaxed about succession planning at this point.

The strategy being pursued is sound with organic growth of the Managed Detection and Response Division is key to success, margin expansion and profitability. The sales momentum is good, albeit the partnership model is still evolving, and getting this right is critical to accelerating growth.

[jane deer] 23/9/2021 17:18

Cerrito. I agree with you. In the small part that Lucy Sharp presented, I thought she presented well and she said she was focused on the Consultancy business while Ian was more focused on the MDR side. But when it came to questions Ian answered them all, even those referring to consultancy side (or those than you might expect Gemma the CFO to answer).

Hopefully Allenby's estimate for the business to generate meaningful free cash in FY22 are proved accurate.

[cerrito] 23/9/2021 10:26

I listened to the IMC session this morning and it will be interesting to compare and contrast to the noon CCS session.
The way that Ian answered all the questions without giving space to his colleagues is a reminder of the vulnerability here that it is a one manband.
I do not see myself as buying or selling in the foreseeable future and am reconciled to the patience needed.