Market report: Profit alert leaves cyber security firm ECSC’s shares in need of reboot

Profit pain: ECSC's clients include GCQH, whose headquarters in Cheltenham are nicknamed The Doughnut
EPA
Jamie Nimmo30 June 2017

Fresh from another worldwide attack, you’d think investors would be stocking up on cyber-security companies in anticipation of another IT meltdown.

But one of London’s listed firms protecting customers from attacks was today unable to defend itself from a sell-off.

Shares in ECSC Group, which counts Barclays and GCHQ among its clients, tanked 105.1p, or 23%, to 344.9p on AIM as it issued a profit warning six months after floating on the junior market.

The company said converting the sales pipeline into reported revenues was taking longer than expected. Consulting revenues were behind targets and managed services contract wins also failed to live up to expectations.

The lower revenues will now mean a wider full-year loss.

Chief executive Ian Mann, who used to be an adviser to GCHQ, said the new sales team was still “bedding in”.

Despite the sharp share price plunge, investors shouldn’t feel too hard done by. The company floated at 167p per share in December before its hot streak, meaning those holding on to their shares have still nearly doubled their money.

After leaking points throughout yesterday’s session, traders were feeling uninspired as the FTSE 100 drifted 6.80 points lower to 7343.52. Oil giant BP fell 6.45p, or 1.4%, to 443.45p after booking a $750 million (£578 million) charge in Angola, where a gas discovery was deemed uncommercial.

Brokers caused Greene King shares to sink 25.5p, or 3.7%, to 663p as they weighed in after the brewer’s annual results yesterday.

JPMorgan Cazenove was the main culprit as it cut its profit forecasts and its rating from Overweight to Neutral, predicting a deterioration in consumer spending.

AIM-listed North Sea oil firm Hurricane Energy dropped 5p, or 13.5%, to 32p after stunning the junior market with a $520 million fundraiser — $300 million through a share placing at 32p a pop and the rest through convertible bonds.

The cash raised, about the same as Hurricane’s entire market value, will be used to fund the development of its Lancaster field in the North Sea.

Hollywood film financing company FFI Holdings made a star debut on AIM after raising £59 million. The shares listed at 150p but traded up at 157p on their first day.

The company effectively underwrites movies in production and has backed classics such as 12 Years a Slave and La La Land.

Troubled logistics firm DX Group unveiled Ian Gray as a non-executive director. His appointment was hailed by chairman Bob Holt, who has faced criticism at Lakehouse, which he also chairs, for failing to mention in this week’s interim results that it supplied the fire alarms for Grenfell Tower.

DX’s shares remain suspended, with its deal to buy John Menzies’ distribution division hanging by a thread amid a police probe.

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