Share Name Share Symbol Market Type Share ISIN Share Description
Shearwater Group Plc LSE:SWG London Ordinary Share GB00BKT6VH21 ORD 10P
  Price Change % Change Share Price Shares Traded Last Trade
  -3.00 -2.7% 108.00 50,087 15:29:00
Bid Price Offer Price High Price Low Price Open Price
106.00 110.00 111.00 108.00 111.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services 23.04 0.02 0.01 14,293.5 26
Last Trade Time Trade Type Trade Size Trade Price Currency
16:08:24 O 4,000 106.00 GBX

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Date Time Title Posts
06/12/202120:28Expect significant upside from Ј1.50 224
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05/4/202014:48Sensible Shearwater 440
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Shearwater Daily Update: Shearwater Group Plc is listed in the Software & Computer Services sector of the London Stock Exchange with ticker SWG. The last closing price for Shearwater was 111p.
Shearwater Group Plc has a 4 week average price of 108p and a 12 week average price of 108p.
The 1 year high share price is 222.50p while the 1 year low share price is currently 108p.
There are currently 23,809,739 shares in issue and the average daily traded volume is 42,801 shares. The market capitalisation of Shearwater Group Plc is £25,714,518.12.
2lb: Somewhat of a dismal trading update so the response is far from surprising. Revenue down Net cash down from £6m to £4.4m Managed Services offering declining when competitors are all growing substantially. Nobody is buying the "underlying EBITDA" trickery measure , it's just creative accounting to distract from the underlying poor performance. Perhaps the bigger concern is the compounded problem that the strategy is still failing in that they have bought multiple companies and combined them to produce a whole that is materially less then the sum of the parts - as a result they clearly aren't showing any ability to stay flat, never mind grow organically - this in turn means the share price keeps falling and the value of their paper becomes less and less. If you can't grow organically, then you are back to your original "strategy" of growth through acquisition. With a poor acquisition track record and weak paper then who is going to sell to you? Available cash for M&A is too low to buy anything that is going to make any material difference so it's a case of treading water and hoping things improve - not much of an investment hypothesis. With a booming sector , SWG is lagging a long way behind their peers. The danger is that they go for a "panic buy" to try to appease the market when they need to focus on sorting out what they've already overpaid for first. An all time low share price in this sector seems a little at odds with some improvements that have ben made but shows the lack of confidence / belief in the forward looking prospects.
zico01: We finished the week at £1.40 down by 3.5p ... the share price will rebound very strongly once the trading update is announced. The company will announce half year results in November so the TU is due imminently. Any news regarding the promised acquisition(s) will also greatly boost the share price.
zico01: H1 trading update will be issued within 10 days. After the last trading update in April the share price went over £2.20.The company had very strong H2 and they traded ahead of expectations.The strong trading has continued into the current year. They have already stated that this years Q1 was very strong.There is every confidence that the company has traded very strongly throughout the first half. The share price at the moment is not reflecting the anticipated growth over the foreseeable future. At £1.35 the prospective PE is less than 10.
lammylover: Current share price just reflects a few very impatient private investors who can't wait for news or need money elsewhere and sell. You can see that in the daily volumes traded, which are tiny. There are very few large funds making changes to their position, which shows they are comfortable with the current company performance. RHS Holdings in last 6 months are all positive - Killick managed to assimilate 3.98% in July and Schroders increased position to 13.18% in April. There are no big sellers! The reality is that their are only 23m shares available - this is a good thing, in that they are tightly held and very few are traded daily. With good news, share price should move up, exponentially. Without news, share price is just becalmed.
boozey: I hold SWG and work in the cyber industry, I see the issue as being that the company is short of assets, is too consulting led and has a mixed history. Consulting carries relatively small margin and those margins are being eroded as cyber staff cost ever more to recruit and keep. There is a chronic shortage of staff both on the sales and delivery side and attrition is at unprecedented levels. Any acquisition by SWG should be an asset they can resell at good margin and help the company grow more progressively. Also on the SOC side (the managed service operations business which is recurring revenue), this market is mature and saturated now and customers are in addition increasingly looking to AI solutions to predict threats at an earlier stage more cost-effectively. This will likely replace the SOC in coming times. So this brings into question the SWG cyber strategy for the future. I would imagine these reasons weigh on the share price as a blend of low growth, reduced margins and erosion of their managed service business don't bode well. The much anticipated acquisition needs to address these issues and focus on SWG's next generation cyber strategy and be earnings enhancing. As noted by earwacks above in the context of Kape's acquisition, you can see how the right acquisition can cause the share price to explode. Whether the management team at SWG, who I know, have the wherewithal to match that is somewhat in doubt, but the risk-reward profile at the moment makes it a hold as a bit of a punt. The company have had a chequered history. On a more positive note the cyber security industry is very fragmanted as a relative new industry and so consolidation is a distinct possibility and is actively taking place and this could make Shearwater a target - witness last month's acquisition of Nettitude, an industry leader and the cyber arm of Lloyds Register, by Goldman Sachs Asset management no less. Goldman know what they are doing and will want to grow that business to sell it on. More importantly it puts the spotlight on the Cyber Security industry as a whole.
lammylover: What we really need is some more decent sized contract wins... to shift share price up. I'm holding a good slug of shares here and am confident about the future, may just take a bit of time for the share price to take off - either through new contract wins or a media "buy" tip. I'm always amused by how shares are "out of fashion" at low prices / decent price earning ratios; BUT it just takes a tip before everyone wants to buy at a higher price! The madness of markets...
earwacks: on comparisons with other cybersecurity companies, there is are quite big discrepancies. IGP I also hold has 60 million market cap and revenue of 11 million,a third of SWG. no debt. Darktrace, not sure about debt, not many figures out as IPO'd recently: market cap I kid you not, 5.5 billion, revenue 220 million, . That's barely 7 times the size of revenue at SWG, I can't even work out how many times more expensive that is than SWg, but something astronomical. OK a wild guess 180 times as expensive. IGP has a bit more cash but a bit more sanely twice as expensive. Swg is now on a pe of less than 10. Something is wildly over priced and its definitely not SWG
zico01: 2lb you are clearly wrong Over reaction ... results were inline with the trading update issued on 22/04/2021. The share price was marked up by 5p at the opening 1.78 v 1.80 ... if the results were bad or below expectations MM's would have marked the share price down on the opening. Traders and short termers sold on the the news. This share is very illiquid ... not a great deal of free float.
2lb: Yes, that true, however DW is a very high net worth individual for whom SWG is one on many projects and a bit of a toy - indeed he is currently brining another to AIM. The fundamental issue remains that SWG is really just Brookcourt with a few added extras. Form the original RNS announcing the takeover is the startling line "for the financial year ended 31 March 2017, Brookcourt generated unaudited revenue of £22.2 million and £2.8 million of EBITDA" So, FOUR YEAR ago, SWG spent over £30m on something that alone was generating £2.8m EBITDA and have then have spent about the same again on all the other businesses and have produced results that show that everything has basically gone backwards. The strategy is to produce a group with many capabilities in the same space , show the synergies of M&A and demonstrate material cross sell and upsell. What has actually happened is the opposite with the sum of the parts now smaller than the parts added up at the time of acquisition - hence the decline in MCAP and share price. Clearly this isn't going to deter them from pushing ahead on the same path but they first have to get back to net neutral before making gains on their strategy and with M&A more competitive than ever in the space, paper nobody wants, and a pretty paltry £6m to play with, one wonders what they can realistically do over the next 12 months.
2lb: Results are poor in many respects. Nobody likes a decline in revenues, least of all in a sector that has boomed over the past 12 months. Margins are very weak for the industry and indicate that the underlying costs are still too high. Shearwater are masters of the "adjusted EBITDA" and "underlying EBITDA" method of presenting figures but it's embarrassingly easy to unpick. As an example, whilst only contributing just 14% to revenue, the software business generates £2.2m of trading EBITDA, which compares to £3.1m in the services business - so this means £1.6m of central / group costs to get back to the £3.7m of total EBITDA. So the increase in operating margins and "adjusted EBITDA" is really just down to the very quiet exit of unnecessary senior management over the past 12 months where they had more CEOs then admin at one point! The point of software v services is alarming - the software is average quality and not making ground in the market and yet props up the inflated cost base in all other areas. As it shrinks it will dilute margins further. We know M&A to date to has been badly executed with the sum of the prices paid of acquisitions still dwarfing the subsequent MCAP created - quite some effort. New acquisitions will remain hard to come by as nobody wants SWG paper and they simply don't have the cash to buy anything meaningful , not for a couple of years at best in any case. This makes organic growth pivotal and that means attracting scarce resource since it will need to be in the services section. The boss of the Xcina Consulting area popped up as the new head of Security for Rackspace for EMEA this week as a prime example that anyone any good is going to be poached by better outfits. The farce of the Pentest / Secarma "acquisition" is well documented and that has still left the single biggest SWG shareholder facing a Crown Court trial on Feb 2022. I suspect FY22 will improve on FY21 , but it wont inspire much confidence in a broken strategic model. FF made a very solid suggestion that SWG needs to merge with something of scale or look to be sold itself - the current plan will take years to make little progress and small M&A will only make the current issues worse. Have always had fair share price at £1.80 - don't see any reason to change that view so its current oversold to a degree but talk of £3-£4 is just based on pure hope and desperation
Shearwater share price data is direct from the London Stock Exchange
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