Share Search
Visit the Share Search
GRC International shares plunge after H1 revenues fall
18th Dec 2019 08:19
(Sharecast News) - GRC International lost more than a fifth of its value on Wednesday after the IT governance and risk management company posted a 20% drop in first-half revenue caused by falling demand for data protection services.
Revenue for the six months to the end of September fell to £7.1m from £8.9m a year earlier as sales of privacy-related services more than halved. Gross profit fell 22% to £4m while the underlying earnings loss narrowed to £1.4m from £1.8m as the company cut staff numbers.
The AIM-listed company blamed a sharp fall in work related to the EU's data protection rule, known as GDPR, and customer concerns about Brexit and the economy for the revenue decline.
Privacy revenue fell to £2.27m from £4.84m a year earlier, more than offsetting an increase in cyber security revenue to £4.45m from £3.67m. Excluding its acquisition of GDPR-focused consultancy DQM in March, GRC cut 120 jobs during the year leaving it with a headcount of 160 at the end of September.
GRC shares fell 28% to 17p at 0810 GMT. The company floated on AIM in March 2018 at a price of 70p a share.
Chief executive Alan Calder said: "As we expected, H1 revenues were lower than last year's Q1 peak in GDPR-driven performance. The period was also negatively affected by customers' ongoing worries about Brexit and the overall macro-economic malaise.
"We continued to improve marketing and sales skills and processes, while continuing to drive down both direct and indirect costs. We successfully focused on increasing cyber security revenue, countering the continued decline in GDPR work, which we believe has now reached its nadir."
The company said it was still in discussions with DQM management about a deferred payment for the group of about £3.7m. Though DQM has traded profitably, GRC is considering selling the business or raising equity or debt funding.
Revenue for the six months to the end of September fell to £7.1m from £8.9m a year earlier as sales of privacy-related services more than halved. Gross profit fell 22% to £4m while the underlying earnings loss narrowed to £1.4m from £1.8m as the company cut staff numbers.
The AIM-listed company blamed a sharp fall in work related to the EU's data protection rule, known as GDPR, and customer concerns about Brexit and the economy for the revenue decline.
Privacy revenue fell to £2.27m from £4.84m a year earlier, more than offsetting an increase in cyber security revenue to £4.45m from £3.67m. Excluding its acquisition of GDPR-focused consultancy DQM in March, GRC cut 120 jobs during the year leaving it with a headcount of 160 at the end of September.
GRC shares fell 28% to 17p at 0810 GMT. The company floated on AIM in March 2018 at a price of 70p a share.
Chief executive Alan Calder said: "As we expected, H1 revenues were lower than last year's Q1 peak in GDPR-driven performance. The period was also negatively affected by customers' ongoing worries about Brexit and the overall macro-economic malaise.
"We continued to improve marketing and sales skills and processes, while continuing to drive down both direct and indirect costs. We successfully focused on increasing cyber security revenue, countering the continued decline in GDPR work, which we believe has now reached its nadir."
The company said it was still in discussions with DQM management about a deferred payment for the group of about £3.7m. Though DQM has traded profitably, GRC is considering selling the business or raising equity or debt funding.