# Falanx Group Ltd Genuinely Transformational Year

- Link: https://www.directorstalkinterviews.com/falanx-group-ltd-genuinely-transformational-year/412728558
- Published: 2017-05-04T07:20:20+01:00
- Author: Giles Arbor

**Falanx Group Ltd** ([LON:FLX](https://www.directorstalkinterviews.com/company/falanx-cyber-security/fcs.l))
a cyber defence and intelligence provider working with blue chip, SME and government
clients worldwide, is pleased to provide the following trading update.

Full year trading for FYE16/17 is in line with management’s expectations. Falanx
has enjoyed robust revenue increases across all lines of business driven by geopolitical
instability, rising levels of crime and increasing regulatory requirements:

· Total Falanx Group 2017 Revenue of £2.7M compared to £1.8M in 2016, a growth of
50% year-on year;

· Falanx Intelligence continued to grow profitably, with over 70 blue chip clients
demanding Business Intelligence, Security Consultancy and Intelligence products.
The business unit generated revenue of circa £1.80 million and EBITDA of circa £
0.3m for the 2017 financial year. Revenue for 2017 is up by 13% compared with £1.59
million generated in 2016;

· Falanx Cyber Defence customer base grew to 29 significant clients, consuming a
mixture of Consulting, Assessment and Monitoring services. The business unit generated
circa £1m of revenue, doubling in the second half of the financial year;

· Falanx Cyber Defence became ‘UK Govt CHECK’ accredited. This highly sought after
approval opens the door to a highly significant proportion of Her Majesty’s Government
Cyber Assurance spend.

· Falanx Cyber Technologies MidGARD ‘Security-As-A-Service’ platform went live in
late March 2017 gaining early adoption amongst Falanx Cyber Defence clients, including
a major IT Cloud Services company, and will generate new revenues in FY17/18;

· The development of MidGARD gives Falanx ownership of proprietary monitoring IPR,
thus cementing the company’s position as a highly competitive, managed Cyber Defence
services provider, where current barriers to entry are prohibitively expensive to
all but the largest providers;

· The Falanx management team and Board have been significantly strengthened. The
business has now evolved into a fully integrated Cyber Defence and Intelligence 
provider; and

· A new Falanx website is now live, bringing together lines of service in an easily
accessible and engaging user experience.

**Growth in Falanx Intelligence**

During the past year Falanx Intelligence, trading as Stirling Assynt, has continued
to see high levels of client retention and strong levels of demand for subscription
and consulting products due to the current geo-political volatility, including in
the Middle East, North Africa and Western Europe.

The Embedded Analyst business has been particularly strong. The business has renewed
100 percent of existing contracts, for embedded analysts, with prominent FTSE100
and ‘Blue Chip’ firms in the financial, insurance and telecoms sectors. In addition,
new contracts to provide embedded analysts have been won with a major US insurer,
a major mobile telecoms company and a well-known US food and beverage retailer. 
A strong pipeline exists to provide further embedded analysts to several current
and prospective clients, including a Telecoms major and a top four global auditing
practice.

The Business Intelligence practice has also seen continued strong demand, driven
partly by rising international regulatory requirements and shareholder expectations
among client firms, especially relating to corruption and international sanctions.

**Growth in Falanx Cyber Defence**

Falanx Cyber Defence has grown significantly both by revenue and customers. On acquisition,
in May 2016, ASC (Advanced Security Consulting) held 6 key clients, all of which
have been retained, generating circa £40k run-rate per month in consulting revenue.
By the end of Q4 2017, Falanx Cyber Defence services had expanded to 29 customer’s
with revenue in Assess and Consult doubling to £80k per month, contributing to over
£100k total revenue per month. This resulted in Falanx Cyber Defence generating 
over £0.9m in the 11 months from ASC acquisition up to the financial year end of
31st March 2017.

Continuing Sales growth is being driven by the newly formed Sales and Consultancy
team. In addition, access to over 2000 potential new Cyber Security and Intelligence
clients is provided by highly regarded channel partners, including;

· CDW Corporation: The $9bn NASDAQ technology solutions provider, who recently bought
Kelway, one of the UK’s leading IT suppliers;

· NASSTAR Plc : The AIM listed, managed IT services provider;

· Sentronex: One of the UK’s leading Financial Services IT solutions providers;

· Mersey Internal Audit Agency and Audit Yorkshire: providing access to over 100
NHS Trusts in the UK.

In order to support this growth opportunity, Falanx Cyber Defence continues to invest
in finding and developing the best technology and people available in the field 
of Cyber Security.

**UK Government CHECK Accreditation**

Falanx Cyber Defence has won the highly sought after CHECK accreditation from the
UK National Technical Authority for Information Assurance (also known as CESG and
a part of GCHQ). Falanx is now approved to provide IT health check services to identify
vulnerabilities in IT systems and networks for Her Majesty’s Government and the 
wider public sector of systems handling protectively marked information.

Central UK government departments spend approximately £7bn a year on IT, of which
27% is spent on information assurance and security. Demand by UK Government departments
is extremely high for accredited suppliers and Falanx sees this as a fabulous growth
opportunity for Falanx Cyber Defence services.

Falanx Cyber already holds a CREST accreditation, is available through the government’s
G-Cloud Framework and is certified to ISO 27001 (Information Security Management,
ISO 20000-1 Information Technology Service Management) and ISO 9001 (Quality Management)

**Establishment of Falanx Cyber Technologies**

The Falanx technology development hub is now fully established in the new Cyber 
Defence Centre in Birmingham. The new MidGARD platform was rapidly prototyped here
and successfully rolled into client infrastructure as a consequence of the intelligence
being generated by our Assessment, Monitor and Response teams. This form of rapid
technology development, based on real-time operations, carries an extremely low 
cost, contributing significantly to cost control and achieving profitability in 
a rapidly developing market.

**MidGARD and MicroSOC**

The first phase of the MidGARD platform IPR was built internally and wholly owned
by Falanx to eliminate the cost of licensing off the shelf products. This cost of
licensing creates an extremely high barrier to entry for small to medium sized cyber
security vendors aspiring to deliver fully featured managed services online. This
competitive technological advantage is also in short supply for all cyber security
vendors, including the very largest, in all but a licensed form and therefore may
be viewed as representing significantly increased shareholder value.

The MidGARD platform delivered in the MicroSOC ‘plug-n-play’ version built for the
SME market, provides Falanx with an exceptional competitive advantage over the Cyber
Security managed services peer group. With a low cost entry point and easy for client
self-setup with little technical knowledge, the management team believes MicroSOC
holds the key to a robust, reliable and highly scalable Cyber Security-as-a-Service.

**Strengthened Management Team**

The Falanx management team has been transformed over the last 15 months with the
appointment of new Chairman, CEO, Executive Director Cyber Defence and now CFO, 
Craig Dawson resulting in a circa £25k per month increase in group costs. This team
has exceptional experience of managing high growth businesses in the Cyber, TMT 
and Security sectors, the new Falanx team looks forward to a great deal of success;

Mike Read, Chairman: Appointed in February 2016, with over 30 years’ experience 
in the telecommunications and internet space. Mike held board and senior management
level positions within a number of organisations both within the US and UK. He served
as Board member and CEO of AIM listed Pipex Communications Plc (now Daisy Group 
Plc) and President and Board member of Onemain.com, a NASDAQ listed company. He 
has significant experience in Mergers and Acquisitions, raising funds and growing
shareholder value. He is also a Chartered Engineer with an MBA.

Stuart Bladen, CEO: Appointed in October 2016. Stuart was previously at Hewlett 
Packard where he led teams up to 18,000 staff and a P&L of over $2Bn. He acquired
and became Chairman of Vistorm Ltd, another specialist cyber security company which
grew substantially on his watch to £120M turnover. He was a board director for HP,
Vistorm, and Lead NED at Injazat Data Systems in Abu Dhabi where he sold a large
portion of that business to investors.

Jay Abbott, Executive Director Cyber Defence: Appointed in January 2016, Jay previously
led the UK National Threat & Vulnerability Management Practice of PriceWaterhouseCoopers,
before founding the extremely well regarded Cyber Security consultancy, ASC Ltd.
Jay is a celebrated key-note speaker and is regularly quoted in the media on the
subject of Cyber Security. Over the past 20 years Jay has spoken at high profile
public and private events on the topics of cyber and information security, providing
thought leadership to the UK Cyber Security Challenge, alongside some of the biggest
names within commercial Cyber market and UK Government.

Craig Dawson, CFO: Appointed in March 2017, Craig previously performed advisory 
and assurance services at Deloitte LLP for a broad range of FTSE listed institutions
in the Technology, Media and Telecommunications (TMT) sector. Craig then served 
as Finance Director at Global Strategies Group (London), the worldwide defence, 
technology, consultancy and services organisation. Craig’s invaluable corporate 
finance insights have been honed by playing a key role in an equity raise of $73m
on the NASDAQ and the acquisition of STG Inc, a Cyber Security, Software Development,
Intelligence and Analytics company servicing the US Government, for $165.5m.

> **Mike Read, Chairman of Falanx Group Ltd, commented:** “This has been a genuinely
> transformational year for Falanx Group. The Falanx team has delivered on our promise
> to generate outstanding growth and develop new technology. We have also capitalized
> on our excellent relationships and highly regarded services to significantly enlarge
> our client base. The foundations are now in place for a profitable year of robust
> growth.”

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