TIDMGRC
RNS Number : 6399Q
GRC International Group PLC
22 June 2020
The following replaces the notice released 22 June 2020 at
07:00, RNS Number 5846Q. The section headed 'Finances' was
incorrectly omitted, all other details remain the same. The full
amended text appears below.
GRC International Group PLC ("GRC" or the "Group")
GRC, a leading supplier of IT governance, risk management and
compliance products and services, is pleased to announce the
following trading update, including the trading performance of Q1
2021.
COVID-19 Operational Performance
-- V-Shaped Recovery: Our pandemic response plan allowed for a
substantial drop in revenue immediately following initiation of the
UK-wide lockdown on 23 March. We assumed that April would be the
nadir and we planned for a V-shaped recovery starting in May and
continuing through Q2.
We are pleased to report that we are currently trading ahead of
that plan. Billings are almost 20% ahead of management's
expectations, costs have been carefully controlled and are as a
result lower than anticipated and, as a consequence, our cash
position is better than we allowed for. Website traffic and
transaction volume both started a sustained rebound from April.
-- Business Adaptation: The Group has quickly adapted for the post-lock down environment.
o The majority of our previously office-based staff in all our
geographic locations are now permanently home-based.
o Our classroom training business is now completely online, with
a bio-secure training centre opening in Cambridgeshire with an
innovative 'Learn from Anywhere' multi-channel delivery model.
o We are successfully delivering 95% of our cyber security,
privacy and continuity services remotely to customers across the
world.
o Since lockdown, the volume of contracts in our GRCI Law
business has nearly doubled.
o DQM's revenues have, in line with expectations, increased
month-on-month through Q1.
-- Subscription products: The Group has continued investing in
its growing range of subscription businesses. In particular:
o We have licenced 8,700 new users on our e-Learning Staff
Awareness platform.
o We now have 13 documentation toolkits available on a
subscription model. Sales recovered in May to the level they were
at prior to lockdown.
o We were appointed an IASME Certification Body for Cyber
Essentials in late May and sales of this product range, which is
sold on an annual subscription basis, are growing rapidly.
o We continue to launch new content and module upgrades on the
CyberComply risk and privacy management platform, sold by our
Vigilant Software subsidiary.
o Newly launched subscription products include a
CREST-accredited Vulnerability Scanning service and, within DQM,
the BreachTrak subscription service.
o GRCI Law's Privacy-as-a-Service model, which has a strong
annual retainer element, continues to see increasing uptake.
-- Customer Demand: Although the onset of the Coronavirus
crisis, which led into the steep demand decline in March and April,
compromised the revenue growth we had expected in Q4 of FY20, we
have seen steady week-on-week improvements in demand since the
start of May.
o During Q1, the Group has also secured 3 relatively large
longer term contracts that will contribute GBP400k in billings
during this FY.
Market
In the prevailing highly volatile climate, the Board's view
currently is that security, business continuity and privacy
compliance projects will continue to be critical for clients in
those sectors that have ongoing business operations. Moreover, the
widespread shift to remote working creates new vulnerabilities for
clients and new opportunities for our products and services.
Finances
-- Funds raised from the February placing strengthened the
balance sheet and working capital position of the Group. During Q1
2021 cash has tracked ahead of the Board's expectations and
headroom in banking facilities has consequently increased. The
Group's invoice discounting facility remains unused.
-- Preparation and audit of the FY2020 Annual Report is
continuing satisfactorily despite the challenges presented by
remote working, and The Group intends to release the Annual Report
in early September .
-- Despite the impact of Covid 19, turnover for the second half
was broadly similar to the first half and full year revenue is
expected to be between GBP14m and GBP14.5m. As expected, cost
savings from the first half restructuring lead to a much improved
performance at EBITDA level. Q3, which includes the traditionally
quiet month of December, delivered a small EBITDA loss and this was
offset by a marginally positive EBITDA Q4 despite the adverse
impact of Covid 19 on revenue.
-- Looking ahead, as the economic impact of COVID-19 continues
to evolve, the Board expects that it may continue to impact
business development and new business, although this is difficult
to fully quantify at this stage. Even as lockdown restrictions
begin to be eased, the impact on business development remains
unquantifiable and therefore the Board is not in a position to give
future financial performance guidance until the economic situation
can be more clearly assessed.
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries
GRC International Group plc www.grci.group
Alan Calder (CEO) 033 3800 7000
Chris Hartshorne (Finance Director)
Grant Thornton UK LLP (Nomad)
Philip Secrett / Jen Clarke / Seamus Fricker 020 7383 5100
Dowgate Capital Limited (Broker)
James Serjeant 020 3903 7717
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Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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