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ECSC Group PLC Final Results for the Year Ended 31 December 2020

24/03/2021 7:00am

UK Regulatory (RNS & others)


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TIDMECSC

RNS Number : 2555T

ECSC Group PLC

24 March 2021

24 March 2021

ECSC Group plc

('ECSC' or the 'Company' or the 'Group')

Final Results for the Year Ended 31 December 2020

Strong recovery delivering adjusted EBITDA profitability and cash generation

ECSC Group plc (AIM: ECSC) a leading provider of cyber security services, announces its audited final results for the year ended 31 December 2020.

Highlights

-- Managed Detection and Response (MDR) recurring revenue growth of 22% to GBP2.42m (2019: GBP1.98m)

   --    MDR revenue up 6% to GBP2.73m (2019: GBP2.59m) 
   --    Adjusted EBITDA* profit GBP0.4m (2019: break-even) 

-- Organic revenue growth down 4% to GBP5.66m (2019: GBP5.91m) due to short-term COVID-19 related impact in Q2

-- Cash of GBP1.12m at period end (31 December 2019: GBP0.35m), including GBP0.42m of COVID-19 related medium-term government support relating to VAT and PAYE deferral. The Group's bank facility of GBP0.5m remains unutilised.

* Adjusted EBITDA excludes one-off charges and share based charges (see note 12)

Operational Highlights

   --    90 new Assurance clients secured (2019: 118) 

-- Continued development of partner programme, with over 150 partners signed up, expanding reach and routes to market

-- Continued development of proprietary Artificial Intelligence (AI) software, with 14% R&D investment

Post-Period Highlights

-- Major contract wins in MDR division for one of the UK's major charities and a national leisure group

   --    Market forecasts resumed for 2021 and 2022 

Ian Mann, Chief Executive Officer of ECSC, commented:

"The Group responded rapidly to the challenges posed by the pandemic, drawing up a strategy early on to manage the situation effectively and ensure business continuity. As a result, we are delighted to report growing adjusted EBITDA profitability and cash generation for the 2020 financial year.

"Despite the impact of COVID-19 on the Assurance division in Q2, we began to see rapid recovery in Q3 and a return to growth of 6% in Q4 against Q4 2019, as well as an addition of 90 new clients to the division, which is testament to both our business resilience and market demand.

"The continued growth in recurring MDR revenue demonstrates the strength of this service line, and our effective strategy of winning consulting clients and converting them into long-term managed services clients.

"The strong momentum of Q4 has continued into Q1 2021, with a number of impressive contract wins in our MDR division. We are resuming our organic growth strategy and related recruitment activities, and we look forward to keeping the market updated on our progress."

Enquiries:

   ECSC Group plc                                                             +44 (0) 1274 736 223 

David Mathewson (Non-Executive Chairman)

Ian Mann (Chief Executive Officer)

   Allenby Capital (Nominated Adviser and Broker)       +44 (0) 203 3285 656 

David Hart / Asha Chotai (Corporate Finance)

Tony Quirke (Equity Sales and Corporate Broking)

   Yellow Jersey (PR and IR)                                           +44 (0) 203 0049 512 

Sarah Hollins

Annabel Atkins

Matthew McHale

For more information please visit the following: https://investor.ecsc.co.uk/

Notes to Editors:

Founded in 2000, ECSC Group plc (AIM: ECSC) is the UK's longest running full-service cyber security service provider. With an extensive range of in-house developed proprietary technologies, including advanced Artificial Intelligence (AI) systems, ECSC provides expert security breach prevention and advisory support to organisations across all sectors.

ECSC operates from two Security Operations Centres (SOCs): one in Yorkshire, UK, and the other in Brisbane, Australia. ECSC offers flexible 24/7/365 cyber security monitoring, detection, and response support to its clients, either as a fully managed service or to enhance an organisation's existing cyber security systems. In addition, ECSC's Assurance division provides guidance, certification to industry standards, and extensive testing services to allow organisations to assess their cyber security protection.

The Company's broad client base ranges from e-commerce start-ups to global blue-chip organisations, including 10% of the FTSE 100.

For more information please visit the following: https://investor.ecsc.co.uk/

Chairman's Statement

T hese results demonstrate solid growth in the Group's adjusted EBITDA profitability and cash generation. The encouraging progress we have seen in our Managed Detection and Response (MDR) division has been driven by continuing market demand and increasing awareness of ECSC's expertise in both the development of technologies and in the area of Artificial Intelligence (AI). This highlights the ongoing requirements for all organisations to maintain their cyber security defences, and we have emerged from the most difficult period imaginable in a strong position.

Despite the ongoing uncertainty caused by the pandemic and the economic risks associated with Brexit, the Group has continued to demonstrate resilience and financial progress based on quality of delivery and unrivalled client reputation and retention. I am proud of the way the team has adapted in order to achieve a very credible set of results throughout a period of unprecedented economic turmoil.

The confirmation of the multi-million-pound fines related to the UK and European General Data Protection Regulation (GDPR) substantiate the new regulatory environment that all organisations have to acknowledge; building resilience into their cyber security protection, detection and response capabilities. ECSC remains the trusted partner to help organisations of all sizes achieve this.

The continued growth in 24/7/365 detection services, delivered through the Security Operations Centres (SOCs) in the UK and Australia, supported by the ECSC Kepler Artificial Intelligence (AI), shows the importance of early breach detection to contain the incident and limit damaging consequences. For all but the largest global organisations, the outsourcing of this critical function continues to be the logical choice, and ECSC has the technology, people, and certified processes to deliver.

The Group's successful GBP0.5m (before costs) fundraise in April 2020 demonstrated the continued support from our institutional investors and reduced our risk exposure during the uncertain months of 2020. As a result of the growth in profitability and cash generation, the Group did not utilise this additional funding.

I'm pleased to note that we have maintained a stable team throughout these difficult times, with staff retention at an improved rate of 91%.

On behalf of the board, I would like to thank all of our clients, partners, team, advisors, and investors for their continued support throughout a challenging year for us all.

ECSC is well-positioned in the growing cyber security marketplace, and we are now resuming our organic growth strategy and related recruitment activities.

David Mathewson

Non-Executive Chairman

24 March 2021

Chief Executive Officer's Review

T he Group made solid progress during the 2020 financial year, and we are particularly pleased to report growing adjusted EBITDA profitability and cash generation.

The GBP3m of Group revenue in H2 illustrates the recovery in the Assurance division following the COVID-19 related impact seen in Q2. The continued growth in recurring MDR revenue demonstrates the resilience of this service line, and our effective strategy of winning consulting clients and converting them into long-term managed services clients.

COVID-19 Impact

One year ago, at the time of publishing our annual results, the potential impact of the pandemic was beginning to emerge. As such, we led our Annual Report with our strategy of managing the situation. This included:

1. Re-engineering services traditionally delivered on-site with clients to enable remote and home working, ensuring the safety of our clients and our team.

2. Ensuring the continued delivery of off-site 24/7 managed services with uninterrupted compliance with all agreed Service Level Agreements (SLAs).

3. Making use of government support and reducing costs to a break-even level during the short-term period of revenue loss.

The management team, and the efforts of all employees, ensured we met the first two objectives and exceeded the third.

To reduce the overall risk to the Group, in April 2020 we conducted a fully subscribed GBP0.5m (before costs) fundraise from existing and new institutional investors to strengthen our cash position, and reduce the risks of either an extended lockdown, or potential long-term disruption without the uncertain government support.

The direct revenue impact of COVID-19 was most evident in two areas:

Firstly, the Assurance division, comprising mainly consultancy type services, was impacted with client cancellations and delays to confirmed projects. Having seen Assurance growth in Q1 2020 of just over 4% compared with the 2019 average quarterly revenue, Q2 2020 saw revenue drop by over 50% against the same comparator.

However, Q3 2020 demonstrated a rapid recovery to only 4% down on average 2019 quarterly revenues, with Q4 returning to growth of over 6% against the same comparator.

Secondly, client chargeable expenses declined from GBP53k in Q1 2020 to only GBP8k in Q2 2020, and only GBP21k combined in Q3 2020 and Q4 2020 as remote working continued.

The combined reductions in revenue for the Assurance division in Q2 and expenses for the year came to over GBP400k. This compares with the overall Group revenue reduction of GBP242k for the year, showing the reduced revenue was due to the short-term impact of COVID-19.

Return to Profitability

The combination of the strong recovery in the Assurance division in Q3, the continued recurring revenue growth in the MDR division of 22%, and careful control of costs, saw Group Adjusted EBITDA profit of GBP0.4m (2019 break-even).

Growth Strategy

We are confident that the organic growth strategy of ECSC remains appropriate. Despite the challenges of 2020, we added 90 new Assurance division clients. In addition, we expanded the Partner Programme to over 150 partners, contributing to 4% of revenue (2019: 2%) and 13% of the new client wins.

Key Performance Indicators

The Key Performance Indicators below were established in 2018 to enable meaningful measurement of the Group's performance.

 
      Performance                Rationale              2020         2019         2018          Management Comment 
        Indicator 
                                                                                              The Group saw a decline 
                                                                                               in Assurance revenue 
                                                                                             and rechargeable expenses 
                               Measurement of                                                due to COVID-19 pandemic. 
                               the success of                                                   Assurance revenues 
                             the organic growth                                                 returned to growth 
      Revenue Growth              strategy               (4%)          10%          35%                in Q4 
----------------------  --------------------------  -----------  -----------  ----------- 
                               Visibility of 
                               the success of                                                   Continued growth due 
                               increasing the                                                   to new contract wins 
                                percentage of                                                 and contract expansions, 
     MDR Recurring         revenue from long-term                                               building on the 2017 
     Revenue Growth          recurring revenues           22%          27%          46%              investment 
----------------------  --------------------------  -----------  -----------  ----------- 
                               Visibility of 
                               the success of 
                               increasing the 
                                 percentage                                                       In line with the 
                               of revenue from                                                        strategy 
     MDR Recurring                long-term                                                       to increase this 
   Revenue Proportion        recurring revenues           43%          34%          29%              proportion 
----------------------  --------------------------  -----------  -----------  ----------- 
                            Combined measurement 
        MDR Order                    of                 GBP2.6m      GBP2.6m      GBP2.5m      The management team's 
           Book             new client contracts                                              favoured overall measure 
                                together with                                                  of progress in managed 
                            renewals of existing                                                      services 
                              client contracts 
----------------------  --------------------------  -----------  -----------  ----------- 
                                                                                              Indicative of increased 
                                                                                                 leveraging of IPO 
       MDR Gross            Delivery efficiency                                                     investment 
         Margin                  measurement             73%          68%          53%              in capacity 
----------------------  --------------------------  -----------  -----------  ----------- 
                                                                                               Indicative of strong 
                              Quasi-recurring                                                   client retention and 
       Assurance              from longer- term                                                  continued trust in 
     Repeat Revenue          consulting clients           73%          73%          78%             ECSC quality 
----------------------  --------------------------  -----------  -----------  ----------- 
                                                                                             A reflection on capacity 
                                                                                                required for growth 
                                                                                                 and management of 
       Assurance            Delivery efficiency                                                     consultant 
      Gross Margin               measurement              58%          54%          57%              workload 
----------------------  --------------------------  -----------  -----------  ----------- 
                                                                                             A new measure introduced 
                            Continued investment                                                 to show continued 
        Research                in technology                                                       investment 
     and Development          and intellectual                                                  in technologies for 
      (of revenue)          property development         14%          13%           8%              the future 
----------------------  --------------------------  -----------  -----------  ----------- 
 

Outlook

ECSC is well-positioned in the growing cyber security marketplace and looks forward with confidence to delivering improved operating results and shareholder value.

Ian Mann

Chief Executive Officer

24 March 2021

Financial Review

Principal Activities

The principal activity of the Group during the year continued to be the provision of professional cyber security services, including Assurance, MDR and the sale of Vendor Products.

Comparative Financial Information

 
 
                                 Year ended   Year ended 
                                31 December  31 December 
                                       2020         2019 
                                    GBP'000      GBP'000 
Revenue 
Assurance                             2,724        2,922 
MDR                                   2,732        2,585 
Vendor Products                         125          162 
Other                                    82          236 
                                      5,663        5,905 
------------------------------  -----------  ----------- 
Gross Profit 
Assurance                             1,576        1,574 
MDR                                   1,994        1,745 
Vendor Products                          25           29 
Other                                  (47)           12 
                                      3,548        3,360 
------------------------------  -----------  ----------- 
Adjusted EBITDA* 
Other Income                            297          263 
Sales & Marketing Costs             (1,713)      (1,958) 
Administration Expenses             (1,757)      (1,664) 
                                        375            1 
------------------------------  -----------  ----------- 
EBITDA** 
Share Based Payments                  (101)        (105) 
Exceptional Items                      (65)          (6) 
                                        209        (110) 
------------------------------  -----------  ----------- 
 
Depreciation and Amortisation         (480)        (594) 
 
Adjusted Operating Loss*              (105)        (593) 
------------------------------  -----------  ----------- 
Operating Loss                        (271)        (704) 
------------------------------  -----------  ----------- 
 

* Adjusted Operating Loss and EBITDA excludes one-off charges and share based charges.

** EBITDA is defined as Earnings before Interest, Tax, Depreciation and Amortisation

(See note 12 in the Financial Statements).

Revenue & Organic Growth

Total revenue in the year ended 31 December 2020 was GBP5.66m, down 4% on the comparable prior period (revenue in the 12 months ended 31 December 2019 was GBP5.91m). Within this, Assurance revenue fell by 7% to GBP2.72m (2019: GBP2.92m).

MDR division revenue rose by 6% in the year to GBP2.73m (2019: GBP2.59m). This includes recurring revenue which rose to GBP2.42m (2019: GBP1.98m) and Incident Response revenues which fell to GBP0.31m (2019: GBP0.60m).

Vendor Products revenue in the year fell by 23% to GBP0.13m (2019: GBP0.16m).

Margin Generation

Gross Profit for the year was GBP3.55m, yielding a 63% margin (2019: GBP3.36m, yielding a 57% margin). This was due to improved margins across the Assurance, MDR and Vendor divisions.

The Assurance margin rose to 58% in the year (2019: 54%). This was due to cost controls over the period. The Board expects the Assurance margin to continue at a similar level in the future.

The MDR margin rose to 73% (2019: 68%), with the increase being a direct result of new contracts utilising the capacity built in previous years and cost controls.

EBITDA & Operating Loss

Adjusted EBITDA for the year, which excludes one-off charges and share based charges, was GBP0.4m (2019: Break-even). EBITDA for the year was a profit of GBP0.21m (2019: loss of GBP0.11m).

Adjusted Operating Loss for the year, which excludes one-off charges and share based charges, was GBP0.11m (2019: loss of GBP0.59m). The Operating Loss in the year was GBP0.27m (2019: loss of GBP0.70m).

Cash Flow

Cash and cash equivalents increased by GBP0.77m to GBP1.12m as at 31 December 2020 primarily due to improved margins across the Assurance and MDR divisions GBP0.29m of Covid related Government grants, and the proceeds from the fundraise undertaken during the year which raised GBP0.5m (before costs).

Intangible Asset

Intangible asset costs have increased to GBP1.28m (2019: GBP1.09m). This is offset by amortisation of GBP0.82m. The Group's development cost for the year was GBP0.19m. The Net Book Value of Intangible Assets as at 31 December 2020 was therefore GBP0.46m (2019: GBP0.43m). During the year, the Group received a refund of GBP0.29m from HMRC in respect of a surrender of R&D Tax Credits from earlier periods.

Tangible Asset

Property, plant and equipment (PPE) cost has remained at GBP0.95m (2019: GBP0.95m). This is offset by depreciation of GBP0.81m. The Group's capital expenditure for the year was GBP0.01m. The Net Book Value of Tangible Assets as at 31 December 2020 was GBP0.15m (2019: GBP0.28m).

Trade and other receivables

Trade and other receivables decreased to GBP0.81m (2019: GBP0.89m) as at 31 December 2020. This includes GBP0.61m of Trade receivables.

Trade and other payables

Trade and other payables increased to GBP2.09m (2019: GBP1.82m) as at 31 December 2020. This includes GBP0.88m of deferred income (2019: GBP0.87m).

Key Performance Indicators

The Key Performance Indicators are set out above.

Balance Sheet

The Group's Balance Sheet as at 31 December 2020 had Net Assets of GBP0.65m (2019: GBP0.37m). Retained Earnings and Distributable Reserves as at 31 December 2020 were a cumulative loss of GBP5.94m (2019: cumulative loss of GBP5.67m).

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, and that the Group has a secured invoicing discounting facility of GBP0.5m, which remains unused. The facility was renewed in August 2020 for a minimum 12 months period with a three month notice period. The Board expects to renew the facility for a further 12 months following the annual review expected in August 2021. However, if it is not renewed, the cashflow forecast demonstrates that the facility is for prudence only and is not relied upon. The Board is positive about the future EBITDA trajectory of the Company and continues to manage the cash position of the Company carefully. These factors give the Directors confidence in relation to going concern.

Dividend

The Board has not declared a dividend for the year ended 31 December 2020 (2019: GBPnil).

Gemma Basharan

Chief Financial Officer

24 March 2021

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2020

 
                                           Year ended   Year ended 
                                          31 December  31 December 
                                                 2020         2019 
                                    Note      GBP'000      GBP'000 
 
Revenue                              5          5,663        5,905 
Cost of Sales                                 (2,115)      (2,545) 
----------------------------------  ----  -----------  ----------- 
Gross Profit                         5          3,548        3,360 
Other Income                                      297          263 
Sales & Marketing Costs                       (1,713)      (1,958) 
Administration Expenses                       (2,403)      (2,369) 
 
Operating Loss before Exceptional 
 Items and Share Based Payments                 (105)        (593) 
Share Based Payments                              101          105 
Exceptional Items                                  65            6 
----------------------------------  ----  -----------  ----------- 
 
Operating Loss                                  (271)        (704) 
----------------------------------  ----  -----------  ----------- 
Finance Cost                                     (48)         (46) 
----------------------------------  ----  -----------  ----------- 
Loss before Taxation                 12         (319)        (750) 
Taxation Credit/(Charge)             6             50         (26) 
----------------------------------  ----  -----------  ----------- 
Loss for the year                               (269)        (776) 
----------------------------------  ----  -----------  ----------- 
Other Comprehensive Income                          -            - 
----------------------------------  ----  -----------  ----------- 
Total Comprehensive Loss for the 
 year                                           (269)        (776) 
----------------------------------  ----  -----------  ----------- 
 
Attributed to Equity Holders of 
 the Company                                    (269)        (776) 
 
Loss per Share                       7          pence        pence 
Basic Loss per Share                            (2.7)        (8.5) 
Diluted Loss per Share                          (2.7)        (8.5) 
 

Consolidated Statement of Financial Position

As at 31 December 2020

 
                                       Year ended   Year ended 
                                      31 December  31 December 
                                             2020        2019* 
                                Note      GBP'000      GBP'000 
ASSETS 
Non-current Assets 
Intangible Assets                8            455          429 
Property, Plant and Equipment    9            148          283 
Right-of-use Assets              11           746          896 
Deferred Tax Asset               6            118           77 
Total Non-current Assets                    1,467        1,685 
------------------------------  ----  -----------  ----------- 
Current Assets 
Inventory                                       9           26 
Trade and Other Receivables                   811          890 
Corporation Tax Recoverable                   216          265 
Cash and Cash Equivalents        10         1,122          351 
Total Current Assets                        2,158        1,532 
------------------------------  ----  -----------  ----------- 
TOTAL ASSETS                                3,625        3,217 
------------------------------  ----  -----------  ----------- 
LIABILITIES 
Current Liabilities 
Trade and Other Payables                  (2,085)      (1,817) 
Lease Liability                  11         (143)        (150) 
Total Current Liabilities                 (2,228)      (1,967) 
------------------------------  ----  -----------  ----------- 
Non-current Liabilities 
Deferred Tax Liability           6           (90)         (99) 
Lease Liability                  11         (659)        (781) 
Total Non-current Liabilities               (749)        (880) 
------------------------------  ----  -----------  ----------- 
TOTAL LIABILITIES                         (2,977)      (2,847) 
------------------------------  ----  -----------  ----------- 
NET ASSETS                                    648          370 
------------------------------  ----  -----------  ----------- 
EQUITY 
Equity attributable to Owners 
 of the Parent: 
Share Capital                                 100           91 
Share Premium Account                       6,098        5,661 
Share Option Reserve                          392          291 
Retained Earnings                         (5,942)      (5,673) 
TOTAL EQUITY                                  648          370 
------------------------------  ----  -----------  ----------- 
 

*A prior year restatement of GBP320k is accounted for to remove trade receivables and contract liabilities in relation to amounts invoiced but not due as at 31 December 2019 where the performance obligation had not commenced at that date. This restatement does not impact the statement of comprehensive income for the Group or Company only financial statements.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2020

 
                                            Share    Share 
                                   Share  Premium   Option  Retained 
                                 Capital  Account  Reserve  Earnings    Total 
                                 GBP'000  GBP'000  GBP'000   GBP'000  GBP'000 
 
Balance as at 31 December 2018        91    5,661      186   (4,897)    1,041 
-------------------------------  -------  -------  -------  --------  ------- 
 
Loss and Total Comprehensive: 
Total comprehensive loss for 
 the year                              -        -        -     (776)    (776) 
Transactions with shareholders 
Issue of Shares                        -        -        -         -        - 
Share Based Payments                   -        -      105         -      105 
 
Balance as at 31 December 2019        91    5,661      291   (5,673)      370 
-------------------------------  -------  -------  -------  --------  ------- 
 
Loss and Total Comprehensive: 
Total comprehensive loss for 
 the year                              -        -        -     (269)    (269) 
Transactions with shareholders 
Issue of Shares                        9      437        -         -      446 
Share Based Payments                   -        -      101         -      101 
 
Balance as at 31 December 2020       100    6,098      392   (5,942)      648 
-------------------------------  -------  -------  -------  --------  ------- 
 

Consolidated Cash Flow Statement

For the year ended 31 December 2020

 
                                                     Year ended   Year ended 
                                                    31 December  31 December 
                                                           2020         2019 
                                              Note      GBP'000      GBP'000 
 
Cash Flow from/(used in) Operating 
 Activities 
Loss before Taxation                                      (319)        (750) 
 
Adjustment for: 
Amortisation of Intangibles                    8            168          177 
Depreciation of right-of-use assets            11           175          200 
Depreciation of Property, Plant and 
 Equipment                                     9            137          217 
Profit on Disposal of Equipment                             (4)          (1) 
Finance costs                                                48           46 
Share Based Payments                                        101          105 
--------------------------------------------  ----  -----------  ----------- 
Cash used up in Operating Activities 
 before 
changes in Working Capital                                  306          (6) 
 
Change in Inventory                                          17          (8) 
Change in Trade and Other Receivables                     (214)        (349) 
Change in Trade and Other Payables                          268          428 
Change on Other non cash items                                -         (13) 
 
 
Cash generated from Operating Activities                    377           52 
 
R&D tax credit received                                     343          152 
 
Net Cash Flow generated from Operating 
 Activities                                                 720          204 
 
Acquisition of Property, Plant and 
 Equipment                                     9            (5)        (129) 
Disposal Proceeds                                             6           16 
Development Costs capitalised                  8          (194)        (194) 
Net Cash Flow used in Investing Activities                (193)        (307) 
 
Principal paid on lease liabilities            11         (195)        (195) 
Interest paid on loans and borrowings                       (7)          (1) 
Proceeds from issue of shares                               500            - 
Costs of share issuance                                    (54)            - 
Net Cash generated from/(used in) Financing 
 Activities                                                 244        (196) 
 
Net increase/(decrease) in Cash & Cash 
 Equivalents                                                771        (299) 
--------------------------------------------  ----  -----------  ----------- 
 
Cash & Cash Equivalents at beginning 
 of period                                                  351          650 
 
Cash & Cash Equivalents at end of period       10         1,122          351 
--------------------------------------------  ----  -----------  ----------- 
 

Notes

   1.         Corporate Information 

ECSC Group plc is incorporated in England and Wales and admitted to trading on the market of the London Stock Exchange (AIM: ECSC).

   2.         General Information 

This results announcement may contain certain statements about the future outlook of ECSC Group plc. Although the Directors believe their expectations are based on reasonable assumptions, any statements about future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

   3.         Basis of Preparation 

This financial information for the year ended 31 December 2020 has been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively 'IFRS') in conformity with the requirements of the Companies Act 2006.

The information in this preliminary statement has been extracted from the financial statements for the year ended 31 December 2020 and, as such, does not contain all the information required to be disclosed in the financial statements prepared in accordance with IFRS. The Group's Annual Report for the year ended 31 December 2020 has yet to be delivered to the Registrar of Companies. The auditors have reported on these accounts. The figures for the year ended 31 December 2020 and the ended 31 December 2019 do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

The financial statements have been presented in thousands of Pounds Sterling (GBP'000, GBP) as this is the currency of the primary economic environment that the Company operates in.

The preliminary announcement was approved by the Board on 23 March 2021 and authorised for issue.

The statutory accounts for the year ended 31 December 2020 were approved by the Board on 23 March 2021 and will be delivered to the Registrar of Companies in due course. The statutory accounts for the period ended 31 December 2020 will be made available on the Company's website www.ecsc.com at least 21 days before the Annual General Meeting.

   4.         Accounting Policies 

The principal accounting policies applied in the preparation of the financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.

   4.1       Basis of Accounting 

The financial statements have been prepared on the historical cost basis except as stated.

New IFRS standards, amendments to and interpretations not applied to published standards

The following new standards, amendments to standards and interpretations will be mandatory for the first time in future financial years:

 
                              Issued date         IASB mandatory        UK Adoption status 
                                                  effective date        (EU pre 31 December 
                                              (UK mandatory effective          2020) 
                                                       date) 
New Standards 
--------------------------  ---------------  ------------------------ 
IFRS 17 Insurance           18-May-2017 and        01-Jan-2023                 TBC 
 contracts                    25-June 2020 
--------------------------  ---------------  ------------------------ 
Amendments to existing 
 standards 
--------------------------  ---------------  ------------------------ 
Amendments to References      29-May-2018          01-Jan-2020               Endorsed 
 to the Conceptual 
 Framework in IFRS 
 Standards 
--------------------------  ---------------  ------------------------ 
Amendments to IFRS            22-Oct-2018          01-Jan-2020               Endorsed 
 3 Business Combinations 
 - Definition of 
 a Business 
--------------------------  ---------------  ------------------------ 
Amendments to IAS             31-Oct-2018          01-Jan-2020               Endorsed 
 1 and IAS 8: Definition 
 of Material 
--------------------------  ---------------  ------------------------ 
Amendments to IFRS           26-Sept-2019          01-Jan-2020               Endorsed 
 9, IAS 39 and IFRS 
 7: Interest Rate 
 Benchmark Reform 
--------------------------  ---------------  ------------------------ 
Amendments to IAS             23-Jan-2020          01-Jan-2022                 TBC 
 1: Classification 
 of Liabilities 
 as Current or Non-current 
--------------------------  ---------------  ------------------------ 
Amendments to:                14-May-2020          01-Jan-2022                 TBC 
 IFRS 3 Business 
 Combinations; IAS 
 16 Property, Plant 
 and Equipment; 
 IAS 37 Provisions, 
 Contingent Liabilities 
 and Contingent 
 Assets 
--------------------------  ---------------  ------------------------ 
Annual Improvements           14-May-2020          01-Jan-2022                 TBC 
 to IFRSs (2018-2020 
 Cycle): IFRS 1, 
 IFRS 9, Illustrative 
 Examples accompanying 
 IDRS 16, IAS 41 
--------------------------  ---------------  ------------------------ 
Amendments to IFRS            14-May-2020          01-Jun-2020               Endorsed 
 16 Leases Covid 
 19-Related Rent 
 Concessions 
--------------------------  ---------------  ------------------------ 
Amendments to IFRS           25-June-2020          01-Jun-2021           Adopted by UKEB 
 4 Insurance Contracts 
 - deferral of IFRS 
 9 
--------------------------  ---------------  ------------------------ 
Amendments to IFRS            27-Aug-2020          01-Jun-2021           Adopted by UKEB 
 9, IAS 39, IFRS 
 7, IFRS 4 and IFRS 
 16 Interest Rate 
 Benchmark Reform 
 - Phase 2 
--------------------------  ---------------  ------------------------ 
 
   4.2       Going Concern 

The Directors have reviewed whether the Group has adequate resources to continue in operational existence for the foreseeable future, being no shorter than 12 months from the date of approving the Annual Report. In conducting this review, the Directors have considered a range of factors, including the market prospects for cyber security services, client relationships and dependency, supplier relationships and dependency, actual or potential litigation, staff retention and reliance, relationships with HMRC and regulators, financing arrangements, historic trading and cash flow performance, current trading and cash flow performance, and future trading and cash flow expectations. In undertaking their review, the Directors have prepared financial projections for the years ending 31 December 2021 and 2022, a review which assumed continued revenue growth and cost efficiency.

The budget figures are closely monitored against actuals on a monthly basis. Variances that may arise are discussed a Board level on a monthly basis during a review of the monthly numbers. 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.

During 2020, the Group has seen the pandemic creating additional risks and uncertainties. These were carefully monitored and the Group was able to adapt to meet the challenges arising from COVID 19. The Group has extensive remote and home working options in place, fully tested, supporting a range of conferencing technologies, all of which maintain cyber security related certifications, associated technical standards and policies. The Group was also able to deliver the full range of services remotely.

During 2020, the Group took advantage of published time to pay plans on VAT. As at 31 December 2020, GBP0.2m remained outstanding in this regard. A deferred PAYE payment plan ending on 31 March 2021 was agreed with HMRC. As at 31 December 2020, GBP0.2m remained outstanding.

As at 31 December 2020, the Group had cash and cash equivalents of GBP1.1m (2019: GBP0.4m) and achieved an Adjusted EBITDA profit of GBP0.4m (2019: GBP1k), reducing the operating loss to GBP0.3m (2019: GBP0.7m).

On 17 April 2020, the Group completed a fundraise of GBP0.45m (net of expenses of GBP0.05m). The Group continues to have an unused invoice financing facility with Barclays Bank PLC of GBP0.5m.

Based on this review, the Directors have concluded that the Group has adequate resources to meet its liabilities as they fall due and continue in operational existence for the foreseeable future, which is considered to be at least the next 12 months from the date of approval of the financial statements. Consequently, the Directors have adopted the going concern basis in preparing the financial statements.

   4.3       Revenue Recognition 

The core principle is that revenue should only be recognised as the client receives the benefit of the goods or services provided under a commercial contract, in an amount that reflects the consideration to which the provider expects to be entitled for the transfer of the goods or services.

Performance obligations and timing of revenue recognition

Revenue comprises the sales value of goods and services supplied during the year, exclusive of Value Added Tax and trade discounts. Revenue from the provision of Consulting services is recognised as services are rendered, based on the contracted daily billing rate and the number of days delivered during the period.

Revenue from Pre-paid contracts are deferred in the balance sheet and recognised on utilisation of service by the client. Pre-paid revenue is included within Assurance in note 5. Revenue from MDR contracts includes:

Hardware - hardware revenue is recognised on delivery and is included within other revenue as set out in note 5. This is when control of hardware passes to the customer.

Device build - Device build revenue is deferred and recognised on a straight line basis over the term of the contract.

Licensing - deferred and recognised on a straight line basis over the invoice period, due to the performance obligation not being considered distinct from management and monitoring performance obligation

Management and monitoring - deferred and recognised on a straight line basis over the invoice period.

Management and monitoring - deferred and recognised on a straight line basis over the invoice period.

Revenue from the sale of products (vendor) is recognised when control passes to the customer, which is considered to occur when the software or hardware product has been delivered to the client.

Determining the transaction price

The Group's revenue is derived from fixed price contracts and therefore the amount of revenues to be earned from each contract is determined by reference to those fixed prices.

Costs of obtaining long-term contracts and costs of fulfilling contracts

Commissions paid to sales staff for work in obtaining Managed Service contracts are prepaid and amortised over the terms of the contract on a straight line basis.

Commissions paid to sales staff for work in obtaining the Prepaid Consultancy contracts are recognised in the month of invoice.

Contract Balances

 
                               Contract  Contract     Contract     Contract 
                                 Assets    Assets  Liabilities  Liabilities 
                                   2020      2019         2020        2019* 
                                GBP'000   GBP'000      GBP'000      GBP'000 
 
At 1 January                         43        49        (866)        (949) 
 
Commission expensed during 
 the 
period                             (62)      (28)            -            - 
 
Commissions paid in advanced 
 of 
contract completion                  53        22            -            - 
 
Recognised as revenue during 
 the 
period                                -         -        3,390        2,429 
 
Cash received in advanced 
 of 
performance during period             -         -      (3,402)      (2,346) 
 
                                     34        43        (878)        (866) 
-----------------------------  --------  --------  -----------  ----------- 
 

*Prior year restatement

A prior year restatement of GBP320k is accounted for to remove trade receivables and contract liabilities in relation to amounts invoiced but not due as at 31 December 2019 where the performance obligation had not commenced at that date. This restatement impacted the presentation of both the Group and Company Statement of Financial Position. This restatement does not impact the statement of comprehensive income for the Group or Company only financial statements. Trade receivables and contract liabilities are stated net in respect of advance billing in line with the requirements of IFRS 15.

Contract Assets balance of GBP34k (2019: GBP43k) is included in the Trade Receivables and Other Receivables.

Contract Liabilities balance of GBP878k (2019: GBP866k) is included in Trade Payables and Other Payables.

   5.         Revenue and Segment Information 

The Group's principal revenue is derived from the provision of cyber security professional services.

During this period, the Directors received information on financial performance on a divisional basis. The Directors consider that there are three reportable operating segments: Assurance (including Remote Support services), M DR , and Vendor Products. There were a small number of other transactions recorded during each period which are not considered to be part of either of the three reportable operating segments. These are presented below within the 'Other' caption and are not significant.

The Directors do not receive any information on the financial position of each segment, including information on assets and liabilities. Accordingly, no such information has not been presented.

The Group is not reliant on any single client, with no single client accounting for 10% or more of revenue. All revenue recognised is derived from external clients.

The Group has PPE located in the UK (cost of GBP896k; NBV of GBP147k) and Australia (cost of GBP57k; NBV of GBP1k). The Group's revenue and gross profit by operating segment for the year ended 31 December 2020 were as follows:

 
                        Year ended   Year ended 
                       31 December  31 December 
                              2020         2019 
                           GBP'000      GBP'000 
 
Revenue 
Assurance                    2,724        2,922 
MDR                          2,732        2,585 
Vendor Products                125          162 
Other                           82          236 
Total Revenue                5,663        5,905 
---------------------  -----------  ----------- 
 
Gross Profit 
Assurance                    1,576        1,574 
MDR                          1,994        1,745 
Vendor Products                 25           29 
Other                         (47)           12 
Gross Profit                 3,548        3,360 
---------------------  -----------  ----------- 
 
Operating Loss               (271)        (704) 
---------------------  -----------  ----------- 
Finance Cost                  (48)         (46) 
--------------------- 
Loss before Taxation         (319)        (750) 
---------------------  -----------  ----------- 
 

Revenue by country for the year ended 31 December 2020 was as follows:

 
                   Year ended   Year ended 
                  31 December  31 December 
                         2020         2019 
                      GBP'000      GBP'000 
United Kingdom          5,294        5,708 
Europe                    278          116 
United States               -            9 
Channel Islands            89           66 
Middle East                 -            2 
Other Countries             2            4 
Total                   5,663        5,905 
----------------  -----------  ----------- 
 

The Group's United Kingdom revenue by operating segment for the year ended 31 December 2020 was as follows:

 
                          Year ended   Year ended 
                         31 December  31 December 
                                2020         2019 
                             GBP'000      GBP'000 
Revenue United Kingdom 
Assurance                      2,367        2,760 
MDR                            2,724        2,580 
Vendor Products                  124          144 
Other                             79          224 
Total                          5,294        5,708 
-----------------------  -----------  ----------- 
 
   6.         Taxation 

Recognised in the Statement of Comprehensive Income

 
                                    Year ended   Year ended 
                                   31 December  31 December 
                                          2020         2019 
                                       GBP'000      GBP'000 
Corporation Tax (Credit)/Charge              -            - 
Deferred Tax (Credit)/Charge              (50)           26 
Total Tax (Credit)/Charge                 (50)           26 
---------------------------------  -----------  ----------- 
 

Reconciliation of Total Tax (Credit)/Charge

 
                                             Year ended   Year ended 
                                            31 December  31 December 
                                                   2020         2019 
                                                GBP'000      GBP'000 
Loss before Tax                                   (319)        (750) 
------------------------------------------  -----------  ----------- 
UK Corporation at rate of 19.0% (2019: 
 19%)                                              (61)        (143) 
Expenses not deductible for tax purposes              2            2 
Over/under provision in prior period 
 - Deferred Tax                                    (50)           26 
Tax losses on which Deferred Tax 
 not recognised                                      59          141 
Total Tax (Credit)/Charge                          (50)           26 
------------------------------------------  -----------  ----------- 
 

Deferred Tax Assets & Liabilities

 
                                          Year ended   Year ended 
                                         31 December  31 December 
                                                2020         2019 
                                             GBP'000      GBP'000 
Deferred Tax Assets                              118           77 
Deferred Tax Liabilities                        (90)         (99) 
Deferred Tax - Net Asset/ (Liability)             28         (22) 
---------------------------------------  -----------  ----------- 
 

Deferred Tax Assets of GBP118K is recognised in respect of unutilised trading losses, Share Based Payments and short-term timing differences. Deferred Tax Liabilities of GBP90k arise on timing differences in the carrying value of certain of the Company's assets for financial reporting purposes and for corporation tax purposes. These will reverse as the fair value of the related assets are depreciated over time. Deferred Tax balances have been calculated at the rate of 19%, being the rate of Corporation Tax expected to be in force when the timing differences reverse.

Unutilised Trading Losses

The Company continues to carry forward unutilised trading losses of GBP5,111k (2019: GBP5,696k). A Deferred Tax Asset of GBP35k (2019: GBP22k) has been recognised as at 31 December 2020 in respect of the unutilised trading losses. No further Deferred Tax Asset has been recognised because the Board envisages that a significant period of time will be required to generate sufficient profits to utilise the trading losses carried forward.

   7.       Earnings per Share 

Basic Earnings per Share is calculated by dividing the loss for the period attributable to Equity Holders of the Company by the weighted average number of Ordinary Shares outstanding during the period ('Basic Number of Ordinary Shares').

Diluted Earnings per Share is calculated by dividing the loss for the period attributable to Equity Holders of the Company by the weighted average number of Ordinary Shares outstanding during the period plus the weighted average number of Ordinary Shares that would be issued on conversion of all the potential dilutive Ordinary Shares ('Diluted Number of Ordinary Shares'), subject to the effect of anti-dilutive potential shares being ignored in accordance with IAS 33.

Adjusted Earnings per Share is calculated by dividing Adjusted loss (after adding-back exceptional costs incurred in the period; see note 12) by Diluted Number of Ordinary Shares.

The calculation of Basic, Diluted and Adjusted Earnings per Share is as follows:

The calculation of Basic, Diluted and Adjusted Earnings per Share is as follows:

 
                                           Year ended   Year ended 
                                          31 December  31 December 
                                                 2020         2019 
                                              GBP'000      GBP'000 
Net Loss attributable to Equity Holders 
 of the Company                                 (269)        (776) 
Add back: Exceptional Costs                        65            6 
Add back: Share Based Payments                    101          105 
Adjusted Loss                                   (103)        (665) 
----------------------------------------  -----------  ----------- 
 
Number of Ordinary Shares ('000) 
Initial Weighted Average                        9,098        9,098 
Shares issued in April 2020                       909            - 
---------------------------------------- 
Basic Number of Ordinary Shares                10,007        9,098 
Weighted Average Dilutive Shares in 
 Period                                           906          661 
Diluted Number of Ordinary Shares              10,913        9,759 
----------------------------------------  -----------  ----------- 
 
Earnings per Share (pence): 
Basic Losses per Share                          (2.7)        (8.5) 
Diluted Losses per Share**                      (2.7)        (8.5) 
Adjusted Losses per Share                       (1.0)        (7.3) 
 

** In accordance with IAS 33, the effect of anti-dilutive potential shares has been ignored.

During the year ended 31 December 2020, the following dilutive events have occurred:

-- On 17 April 2020, 909,091 ordinary shares were issued for GBP0.45m (net of expenses of GBP0.05m).

-- On 21 August 2020, the Company granted options over 588,037 Ordinary Shares to selected employees, including 144,758 to Director Lucy Sharp, 103,602 to Director Ian Castle and 64,651 to Director Gemma Basharan, of which 587,107 remain outstanding as at 31 December 2020.

-- On 28 August 2020, the Company granted options over 450,000 Ordinary Shares to selected employees, including 100,000 to Director Ian Mann, 100,000 to Director Lucy Sharp, 80,000 to Director Ian Castle and 80,000 to Director Gemma Basharan, of which 450,000 remain outstanding as at 31 December 2020.

These dilutive events were taken into account in calculating Diluted Number of Ordinary Shares.

   8.       Intangible Assets 

Development Costs

 
Costs                    GBP'000 
 
As at 1 January 2019         891 
Additions                    194 
As at 31 December 2019     1,085 
-----------------------  ------- 
 
As at 1 January 2020       1,085 
Additions                    194 
As at 31 December 2020     1,279 
-----------------------  ------- 
 
Amortisation 
 
As at 1 January 2019         479 
Charges for the year         177 
As at 31 December 2019       656 
-----------------------  ------- 
 
As at 1 January 2020         656 
Charges for the year         168 
As at 31 December 2020       824 
-----------------------  ------- 
 
Net Book Value 
 
As at 31 December 2019       429 
-----------------------  ------- 
 
As at 31 December 2020       455 
-----------------------  ------- 
 

9. Property, Plant and Equipment

 
                       Leasehold     Office   Computer     Motor 
                        Property  Equipment  Equipment  Vehicles    Total 
                         GBP'000    GBP'000    GBP'000   GBP'000  GBP'000 
Cost 
 
At 1 January 2019            103        120        639        57      919 
Reclassification due 
 to IFRS16                     -          -       (61)         -     (61) 
Additions                     12         16        101         -      129 
Disposals                      -          -          -      (34)     (34) 
At 31 December 2019          115        136        679        23      953 
---------------------  ---------  ---------  ---------  --------  ------- 
 
Additions                      -          -          5         -        5 
Disposals                      -          -        (5)         -      (5) 
At 31 December 2020          115        136        679        23      953 
---------------------  ---------  ---------  ---------  --------  ------- 
 
Depreciation 
 
At 1 January 2019             48         50        370        24      492 
Reclassification due 
 to IFRS16                     -          -       (20)         -     (20) 
Charge for Period             15         25        168         9      217 
Disposals                      -          -          -      (19)     (19) 
At 31 December 2019           63         75        518        14      670 
---------------------  ---------  ---------  ---------  --------  ------- 
 
Charge for Period             16         21         95         5      137 
Disposals                      -          -        (2)         -      (2) 
At 31 December 2020           79         96        611        19      805 
---------------------  ---------  ---------  ---------  --------  ------- 
 
Net Book Value 
 
At 31 December 2019           52         61        161         9      283 
---------------------  ---------  ---------  ---------  --------  ------- 
 
At 31 December 2020           36         40         68         4      148 
---------------------  ---------  ---------  ---------  --------  ------- 
 
   10.     Cash & Cash Equivalents 
 
                                GROUP        GROUP      COMPANY      COMPANY 
                                As at        As at        As at        As at 
                          31 December  31 December  31 December  31 December 
                                 2020         2019         2020         2019 
                              GBP'000      GBP'000      GBP'000      GBP'000 
Cash & Cash Equivalents         1,122          351        1,119          350 
------------------------  -----------  -----------  -----------  ----------- 
 
   11.       Leases of low-value assets 

On commencement of a contract (or part of a contract) which gives the group the right to use an asset for a period of time in exchange for consideration, the group recognises a right-of-use asset and a lease liability unless the lease qualifies as a 'short-term' lease or a 'low-value' lease.

All leases are accounted for by recognising a right-of-use and a lease liability except for:

   --      Leases of low-value assets 

Leases where the underlying asset is 'low-value', GBP5k lease payments are recognised as an expense on a straight-line basis over the lease term. The group has elected to apply the 'low-value' lease exemption to all qualifying leases, but the election can be made on a lease-by-lease basis.

   --      Short term lease 

Where the lease term is twelve months or less and the lease does not contain an option to purchase the leased asset, lease payments are recognised as an expense on a straight-line basis over the lease term.

The group sometimes negotiates break clauses in its property leases. On a case-by-case basis, the group will consider whether the absence of a break clause would exposes the group to excessive risk. Typically factors considered in deciding to negotiate a break clause include:

   --      the length of the lease term; 
   --      the economic stability of the environment in which the property is located; and 
   --      whether the location represents a new area of operations for the group. 

Right-of-use Assets

A right-of-use asset is recognised at commencement of the lease and initially measured at the amount of the lease liability, plus any incremental costs of obtaining the lease and any lease payments made at or before the leased asset is available for use by the group.

The right-of-use asset is subsequently measured at cost less accumulated amortisation and any accumulated impairment losses. The amortisation methods applied is on a straight-line basis over the term of the lease.

Amortisation charge for the year included in 'administrative expenses' for right-of-use assets.

 
                             Office     Motor         IT 
                          buildings  vehicles  equipment    Total 
                            GBP'000   GBP'000    GBP'000  GBP'000 
At 1 January 2019               981        56         41    1,078 
Additions                         -        18          -       18 
Amortisation                  (132)      (48)       (20)    (200) 
NBV at 31 December 2019         849        26         21      896 
------------------------  ---------  --------  ---------  ------- 
 
At 1 January 2020               849        26         21      896 
Additions                         -        22          -       22 
Variable lease payment 
 adjustment                       4         -        (1)        3 
Amortisation                  (133)      (22)       (20)    (175) 
NBV at 31 December 2020         720        26          -      746 
------------------------  ---------  --------  ---------  ------- 
 

Lease Liability

The lease liability is initially measured at the present value of the lease payments during the lease term discounted using the interest rate implicit in the lease, or the incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.

The lease term is the non-cancellable period of the lease plus extension periods that the group is reasonably certain to exercise and termination periods that the group is reasonably certain not to exercise.

The lease liability is subsequently increased for a constant periodic rate of interest on the remaining balance of the lease liability and reduced for lease payments.

Interest expense for the year on lease liabilities is recognised in 'finance costs'.

 
                            Office     Motor         IT 
                         buildings  vehicles  equipment    Total 
                           GBP'000   GBP'000    GBP'000  GBP'000 
At 1 January 2019              968        55         40    1,063 
Additions                        -        18          -       18 
Interest expense                42         3          -       45 
Lease payments               (121)      (53)       (21)    (195) 
At 31 December 2019            889        23         19      931 
-----------------------  ---------  --------  ---------  ------- 
 
At 1 January 2020              889        23         19      931 
Additions                        -        22          -       22 
Variable lease payment 
 adjustment                      4         -        (1)        3 
Interest expense                37         2          2       41 
Lease payments               (150)      (24)       (21)    (195) 
At 31 December 2020            780        23        (1)      802 
-----------------------  ---------  --------  ---------  ------- 
 

Group and Company

   --   Short-term lease expense                   GBP73k 
   --   Low value lease expense                     GBP3k 
 
                       Up to 12   1 to 5  more than 
At 31 December 2020      months    years    5 years 
                        GBP'000  GBP'000    GBP'000 
Lease payments              176      446        317 
Interest expense           (33)     (84)       (20) 
 
Lease Liabilities           143      362        297 
---------------------  --------  -------  --------- 
 
   12.   Adjusted Loss before Taxation and Adjusted EBITDA 

Adjusted Loss before Taxation

 
                                 Year ended   Year ended 
                                31 December  31 December 
                                       2020         2019 
                                    GBP'000      GBP'000 
Loss before Taxation                  (319)        (750) 
------------------------------  -----------  ----------- 
Share Based Payments                    101          105 
Exceptional Items                        65            6 
Adjusted Loss before Taxation         (153)        (639) 
------------------------------  -----------  ----------- 
 

Adjusted EBITDA:

 
                                 Year ended   Year ended 
                                31 December  31 December 
                                       2020         2019 
                                    GBP'000      GBP'000 
 
Operating Loss                        (271)        (704) 
------------------------------  -----------  ----------- 
 
Depreciation and Amortisation           480          594 
 
EBITDA**                                209        (110) 
------------------------------  -----------  ----------- 
 
Share Based Payments                    101          105 
Exceptional Items                        65            6 
 
Adjusted EBITDA*                        375            1 
------------------------------  -----------  ----------- 
 
 
                                 Year ended   Year ended 
                                31 December  31 December 
                                       2020         2019 
                                    GBP'000      GBP'000 
 
Operating Loss                        (271)        (704) 
------------------------------  -----------  ----------- 
 
Share Based Payments                    101          105 
Exceptional Items                        65            6 
 
Adjusted Operating Loss*              (105)        (593) 
------------------------------  -----------  ----------- 
 

* Adjusted Operating Loss and EBITDA excludes one-off charges and share based charges.

** EBITDA is defined as Earnings before Interest, Tax, Depreciation and Amortisation.

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