Alexey Achepovsky - stock.adobe.
Falanx has signalled that its decision to focus solely on cyber security is going to be a sensible strategy, with its performance in that segment helping the business drive down its losses.
The firm sold off its Assynt Strategic Intelligence division back in October after deciding to specialise in security, sharing the progress it had made in the run-up to the move with a trading update covering the six months ended 30 September.
Those numbers showed that revenues had increased by 28% to £1.8m and losses were narrowed by 40%, coming in at £0.4m. The security division also turned its fortunes around, reversing losses of £0.28m last year to a profit of £0.1m.
The firm managed to land its largest-ever security deal in April, worth £1m of penetration testing to be delivered over three years. The firm also cut the ribbon on its f:CEL (falanx: Cyber Exposure Level) offering, which helps customers get an understanding of their cyber risk and is aimed at small and medium-sized enterprises up to large enterprises.
The sales of Assynt, for a cash enterprise value of £4.6m, came after the period covered by these numbers ended. The money gained from that deal was ploughed into strengthening the cyber operation. In the six months to 30 September, the operation had reported revenues of £1m.
Alex Hambro, non-executive chairman of Falanx, said it was feeling more positive now it had settled on its strategy.
“Following the disposal of Assynt in October 2021, Falanx is now a ‘pure play’ Cyber Security services business which is well positioned and financed to address the growing market opportunity created by constantly increasing risks in the digital world,” he said.
User demand for cyber security
Hambro added that the business was also tapping into the growing user demand for cyber security, which had been accelerated with the shift towards hybrid working.
Recent customer research from Dell revealed that security was the top concern for users and would remain so for the next five years. He said that it was already seeing that in its own business.
“Customer demand has grown significantly compared with the pre-pandemic environment,” said Hambro. “Our new initiatives are gaining interest from both direct customers and our larger partners, and we are beginning to achieve sales of these innovative services.
“Our core service offerings of penetration testing and protective monitoring are doing well, have moved into profitability and provide us with a solid foundation for growth with their large customer bases,” he added. “We view the future for Falanx with increasing optimism. We are operating in an exciting, high-growth market where there is increasing corporate and customer activity.”