Julien Eichinger - stock.adobe.c
Recurring revenues drive decent growth at security player ECSC, with the firm able to deliver another year of organic progress.
Revenues for the year ended 31 December improved by 8% to £6.14m, with losses widening to £522,000 from £319,000. Increases in sales and marketing costs, up by 18%, were a major contributing factor. The firm saw its managed detection and response (MDR) recurring revenue improve by 7% to £2.59m.
MDR revenue now contributes almost half of the firm’s total revenues, and there was growth in the Assurance division. ECSC’s non-executive chairman David Mathewson described 2021 as a year in which the business had “demonstrated resilience”.
There were signs that the firm was investing in the future, with research and development (R&D) going into its proprietary artificial intelligence (AI) software – and ESCS’s partner programme also had an impact, with revenue from those activities rising by 11%, compared to 4% in 2020.
ESCS launched its partner programme in 2019 with the aim of reaching more UK small and medium-sized enterprise (SME) customers, and has signed up 160 partners with an active base of 17% contributing 24% of client acquisitions.
The firm outlined the reasons why it felt that it would be in a strong position for the future, referencing the reported £8bn value of the UK cyber security market and the increased awareness of customers of the need to take steps to mitigate risk.
ESCS indicated to investors that it believed the business was in a position where it could scale up to take advantage of a UK security market that was growing at a rate of 9%.
Although losses widened, the tone being struck by the firm’s senior management was that 2021 was a “period of progress”, with the business continuing to move in the right direction.
“The group made good progress during the 2021 financial year, and we are pleased to report a return to growth in both divisions, and continued to be adjusted EBITDA positive,” said chief executive Ian Mann.
“Responding to the Covid-19 pandemic, the group re-engineered its sales and delivery processes to reflect and cater for the new working patterns of our clients, with a renewed focus on our core strengths and expertise. As a result, we have been able to deliver increased value to our clients in preventing, detecting, and responding to cyber security breaches, with a marked increase in sales across both divisions,” he added.
Looking at the prospects for this year, Mann indicated that the market conditions were in the firm’s favour, and it had already started its first quarter strongly.
“Market demand remains strong as businesses continue to recognise the value of sound cyber security solutions to avoid costly breaches and disruptive down time, especially with the return to office working,” he added. “Momentum has continued into the first quarter of 2022, and we look forward to keeping the market updated on our progress.”
During the last fiscal year, the firm managed to agree a new £1m loan that it will use to support organic growth, putting it in a position where it ended the year with £1.17m in cash.