Shearwater stock rises on guidance beat for revenue and earnings

Shearwater Group PLC on Monday said it expects to report double-digit revenue and adjusted earnings growth for its latest year, in light of "a strong trading performance".

In response, shares in Shearwater were 21% higher at 55.00 pence each on Monday afternoon in London.

The London-based cybersecurity advisory and managed security services group said it expects to report around £42 million in revenue for the year ended June 30, up by approximately 33% from £39.5 million for the prior 15-month period.

Adjusted earnings before interest, tax, depreciation and amortisation are pencilled in at £2.5 million, up 41% from £2.2 million.

Both figures are ahead of market expectations, which Shearwater gives as revenue of £35.5 million and adjusted Ebitda of £2.4 million.

Shearwater explained that it had "delivered a strong trading performance" in the second half, thanks to "momentum" from previously announced contract wins and "continued growth" for its Services segment.

The company had net cash of £5.6 million as of June 30, up from £5.1 million one year prior.

Shearwater added that it expects in the near-term future to schedule a general meeting concerning a proposed reallocation of capital between reserves on the balance sheet. This, it said, would provide the flexibility necessary for share buybacks and/or a dividend.

Looking ahead, Shearwater "remains confident" in its prospects for the current financial year, which it "enters...with positive momentum, supported by continued demand for its cybersecurity services and a strong pipeline of opportunities."

"We are delighted to have delivered a second consecutive year of strong trading performance, achieving further growth in both revenue and Ebitda and building on the momentum established in FY25," commented Chief Executive Officer Phil Higgins. "The cyber security landscape continues to evolve rapidly, with organisations across both the public and private sectors facing increasingly sophisticated and frequent cyber threats.

"We expect this trend to continue and the strong reputations of each of our group companies, built over a long period, aligned to the outstanding capability of our team, positions us well to capitalise on the opportunity that this creates."

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