Shearwater Group, a cyber security firm based in London, has reported a decline in its full year revenue for 2024, falling short of expectations by £10m.
The company said revenue for its full financial year ended March is expected to slide to around £22.5m, down from £26.7m the prior year. Shearwater swung back to a pre-tax profit of £1m, from losses of £0.2m in 2023.
But consensus estimates had forecast revenue of £32.5m and adjusted earnings before tax of £2.5m.
Shearwater said the under-performance was due to delays in wrapping up larger contracts, which are still in negotiation. Its balance sheet has ended the year higher though, up £5m.
David Williams, chairman of Shearwater, said: “With small company valuations continuing to remain under considerable pressure, it is important to note that nearly half of the Shearwater market valuation is represented by the £5 million of cash announced today.
“This attributes precious little value for what is a profitable company with a solid market position and growth opportunities, and one in which the Board continues to see growth potential as we strive to improve returns.”
Shearwater is confident it will return to growth in 2025, citing “a number of high value contracts” with blue chip clients.
Phil Higgins, chief executive of Shearwater Group, said: “Although we are understandably disappointed by our performance this year, there are compelling reasons for optimism as we look ahead.
“Our confidence in achieving growth in FY25 and beyond remains strong. Notably, our new business opportunity pipeline has reached an exceptionally robust level, and we are actively negotiating several substantial contracts.”
The Aim-listed stock is down nearly five per cent over the past year.