StockMarketWire.com - Falanx (FLX) traded in-line with the board's expectations as the foundations of the Cyber Defence business was developed in the year to 31 March 2016.

PERIOD HIGHLIGHTS:

- Turnover for the year ended 31 March 2016 was £1.81 million (2015: £1.92 million) and Falanx's loss before taxation for the year was £2.65 million (2015: £2.2 million).

- The Group's commercial strategy was re-focused to the provision of a comprehensive suite of cyber security services. This resulted in Falanx Resilience, the physical security and training projects division being closed, as its operations had become peripheral to this strategy and a significant reduction of costs across the group.

- The group retained Falanx Intelligence and continued to develop Falanx Cyber Defence;

- Falanx Intelligence: reporting £1.58 million of revenue, £0.19 million of EBITDA

- Falanx Cyber Defence: holds five government organisations on long-term managed service contracts, two of those gained in Q4. Revenues achieved £0.23 million, pre-tax loss of £1.55 million

- The appointment of Mike Read as non-executive chairman in February 2016 is a cornerstone appointment for the company's growth ambitions. Mike has over 30 years' experience in the global Telecommunications, Media and Technology (TMT) sector and involvement in on over 50 M&A transactions and numerous relationships with the senior management teams of blue chip organisations.

- John Blamire, founder of Falanx, returned to full executive control of the group in order to implement the first phase of the reorganisation.

POST PERIOD HIGHLIGHTS:

- Placing of £1m of equity and £0.55m convertible loan in May 2016 to enable the acquisition of Advanced Security Consulting and provide additional working capital to the group's Cyber division activities

- Successful integration of Advanced Security Consulting, a market leading cyber security services organisation offering consulting, managed services, penetration testing and training. Completing the group's consultancy engagement model and broaden the portfolio of services

- Appointment of Jay Abbott as managing director of Falanx Cyber Defence. Jay previously led the UK National Threat & Vulnerability Management Practice at PriceWaterhouseCoopers and founded Advanced Security Consulting. Jay is also the chair of the Competitions Board for the UK Cyber Security Challenge and a member of the Defence and Security Board of TechUK

- The restructure of the Cyber Defence business model to provide a broader, synchronised service offering

- The rebranding of Falanx and subsidiaries in-line with enhanced corporate strategy. Falanx Cyber Defence created through the amalgamation of Falanx Assuria and ASC

- Falanx Cyber Defence revenues increased to circa £80k per month and growing, supported by a qualified pipeline value of circa £1.5m

OUTLOOK

The performance of the business, most specifically in Falanx Cyber Defence is extremely encouraging.

For the first half of the financial tear 2016/17, the board expects to report growing revenue of over £1m.

A decreasing monthly cash burn reducing to £50k per month across the group, growing recurring revenue in Falanx Cyber Defence and Falanx Intelligence and a healthy cash at bank position of £1.28m as of 30 June 2016 all contribute to a healthy financial outlook.

CEO John Blamire said: "We recognised the need to dramatically increase client awareness of the value of managed Cyber Defence services, we also recognised the signs of a relatively young Cyber Security market where education and client-side advice were more effective than traditional sales strategies.

"The acquisition of Advanced Security Consulting as the trusted advisor to clients, providing practical, timely and cost effective solutions and guiding organisations to our managed service platform solved both of these issues.

"The result of this decision has been extremely pleasing.

"With a reorganised group, increased revenue and reduced costs, the board is very encouraged by the group's prospects for the coming year and expects to report very significant growth in Cyber Defence revenue for the first half of financial year 2016/17."




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