# Falanx Group Ltd Q&A with CEO & Chairman Mike Read (LON:FLX)

- Link: https://www.directorstalkinterviews.com/falanx-group-ltd-qa-ceo-chairman-mike-read-lonflx/412740233
- Published: 2017-11-17T12:12:04+00:00
- Author: Amilia Stone

**Falanx Group Ltd** ([LON:FLX](https://www.directorstalkinterviews.com/company/falanx-cyber-security/fcs.l))
Chairman and Chief Executive Officer Mike Read caught up with DirectorsTalk for 
an exclusive interview to discuss the departure of Stuart Bladen, their business
model, MidGARD, company strategy, Mike’s experience with Falanx and previous companies
and what specific market factors are driving the business

 

**Q1: We recently note that Stuart Bladen has decided to step down, what were the
reasons for his departure?**

**A1**: Sadly, Stuart has left the company for personal reasons. He’s helped guide
and steer the business to the interim results which we issued on the 15th November,
some of the headlines of which are cyber growth at 40%, revenue growth overall at
18%. We’ll miss Stuart, but we have in place a very strong management team, we’ve
got a very clear plan for the future and we’ve got the momentum to get it done.

We wish Stuart all the best for the future and I hope that I can successfully step
into his shoes and drive the business to the success that we all require and think
we will achieve.

 

**Q2: Do you think it’ll affect the future in any way?**

**A2**: I don’t think it will affect us in a great deal, I think that because we
have got that strong team in place and Stuart’s left us with a good business model
going forward, it’s just for us to execute it successfully. I hope very confident
that with me in the helm for a period of time, we can get that done.

 

**Q3: You refer to the business model, what can you tell me about that?**

**A3**: Yes, certainly. The business model, we’ve got two basic threads so there’s
the intelligence side of the business under our Assynt brand, this is a well-recognised
and respected geopolitical publication that we issue to 70 customers, covering 35
countries. We report on activities in countries like Syria for example but any major
events, we also cover for our customers, these are really subscription based models,
so we get recurring revenue from them, but we do do a lot of one-off specials for
various customers and we’ve also got imbedded analysts in many companies, both in
the UK and the US.

The second thread, which really gains all the attention, is the cyber business, 
this has got four main components and we call it our 360-degree model. The first
part is assessment where we provide tests, this includes penetration testing to 
identify weak links in a company’s infrastructure. The second part is consult where
we help customers understand threats and provide recommendations.The third element
is monitor where we provide monitoring activities, 365 days of the year, and this
is where we identify real risks in real time and help protect our customers and 
if, sadly, anybody does get hacked, we’re there to help and guide them in our response
time. All these are inter-related and that’s why I call it the 360-degree model,
one drives the other and to the other and so, we’re driving our business from this
model to profitability.

My main aim is to get more recurring revenue from multi-year contracts on both the
cyber and intelligence business.

 

**Q4: How would you describe MidGARD and why is it revolutionary?**

**A4**: We have previously used other software available from other companies to
do our monitoring capability and there are a number of these companies out there
but, to our mind, none of these really seemed to fit our customer needs, we therefore
developed our own advanced threat detection platform called MidGARD.

Why is it special? Well, it uses big data, cloud technologies and other active learning
capabilities and we launched this last month at the Ethical Hacking conference. 
It’s been very well received by the country and it will provide us with good recurring
revenue, as I described earlier, but it will also reduce our running costs because
we will not have to buy the software from other providers.

 

**Q5: In terms of corporate development, we noticed you’ve been quite acquisitive,
what is the strategy going forward?**

**A5**: Yes, Falanx Group have bought, over the last year, a couple of companies
really to help us on the cyber side, on the consult so the bit I described earlier
where we go in and help people understand what the possible threats are. So, we 
bought a couple of companies to help us progress that and make that an independent,
a separate entity for us to grow so there’s been two acquisitions there.

We bought another companies which has got some interesting intellectual property
which has really helped us advance MidGARD and the success of that made it successful
that we launched it, as I said earlier, at the conference.

So, going forward, to answer your point, where appropriate we’re still looking for
further companies that we can add to our consult and assessment side of the business,
I see both of those as on-ramps to our monitoring capability which is where the 
nice recurring revenue is.

 

**Q6: Just turning to yourself Mike, why did you get involved in Falanx Group in
the first place? What’s been your experience for the company so far?**

**A6**: Well, I got involved about 2 years ago and I think it’s really the same 
reasons I believe that the investors are involved.

First, there’s a great expanding market and sadly, there’s always unrest in the 
world and cyber-attacks seem to be with us every day.

Secondly, the regulation is pushing us in a direction of a thing called GDPR which
is going to be implemented in the next 6 months and if companies don’t apply the
GDPR recommendations then their profit is at risk. We’re finding that we’re providing
a lot of guidance to people there, I call it the cyber MOT, so many people are coming
to talk to us about that.

The other reason I joined was that we’ve got a great product set so our intelligence
side, under the product Assynt, and under the cyber side, now we’ve got MidGARD 
and other good products to help flesh out that part.

The fourth main area is we’ve got a great team, we’ve got some of the leading experts
that have joined us so those are the reasons I joined.

I found, being here for 2 years, that all the reasons I joined are actually there,
so I’m very pleasantly surprised with everything that’s moving forward as we’ve 
showed in our interims.

 

**Q7: In terms of your career history, what is it that you bring to the table?**

**A7**: Well, I’ve run a number of companies both in the UK and the US which we’re
on the stock exchange so my business experience of dealing with shareholders is 
an interesting one, certainly dealing with some of those in the US and how they 
differed here.

I’m pretty good at motivating teams because all the companies I’ve run have been
successful and I’ve grown those companies through organic growth, which everyone
likes to see, but also inorganic.

So, I’ve undertaken a number of acquisitions over my many years in the business 
and what’s happened is this has really increased revenue, reduced costs and always
leads to solid profit, the last one I did was the AIM-listed company called Pipex.

So, I believe that I always increase shareholder value and give customers what they
require.

 

**Q8: What can you tell us about the specific market factors which are driving Falanx
Group?**

**A8**: I’ll split it into the two areas, on the intelligence side, our Assynt product,
there is always global instability sadly therefore our 70 customers like our reports
on 30-odd countries we provide so that’s really driving business, more people are
requesting those reports. Also, there’s a real duty of care for the multi-national
companies around the world to make sure they look after their staff and therefore
they need information to find out exactly what’s going on. The Assynt team, some
of them have been around with us for 8 years, are well informed, well respected 
and they give very reliable information.

On the cyber side, one thing I covered a little earlier, GDPR is driving a lot of
business to us, nobody wants to trade with a company that’s not secure, as I said
I view that as our cyber MOT. The second one, you hear that there’s daily hacks 
and more phishing example going on, so people need to protect from that. Te third
bit is that the companies’ networks that we’re looking at are getting more and more
complex, people have mobile solutions, cloud-based applications, remote storage 
and all of that leaves possible gaps for hackers to get into people’s networks and
disrupt their businesses.

So, they are really what I see as the market factors and the market drivers that
we are addressing for all of our customers.

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