ECSC invests in partner programme amid mixed H1 results

AIM-listed cybersecurity outfit will expand partner numbers as well as funnelling sales and marketing resources to partners

Bradford-based ECSC Group praised partners for their contribution to its H1 results and committed to further investment in its programme.

The cybersecurity firm posted total revenue of £2.6m for the six months ending 30 June 2019. This is a slight year-on-year decline of 0.5 per cent.

ECSC launched its partner programme towards the end of last year and reported that it had generated 17 per cent of new client wins and four per cent of revenue in the firm's Consulting Services segment.

Founder and CEO Ian Mann stated that this success has prompted the company to expand its programme and increase investment in it.

"Our new partner programme allows typically IT VARs to directly sell selected ECSC services while referring more complex projects to the ECSC sales team to deliver," he said.

"As of the end of July 2019, 66 partners have signed up to the programme, generating more than 50 sales opportunities and contributing to both new client acquisition and revenue.

"The board sees the continued expansion of the partner programme as having the potential to significantly increase growth in the future. Sales and marketing resources are being directed to support the growing partner programme."

Despite partner contribution to Consulting Services, the division saw its revenue drop 23 per cent to £1.19m. Mann alluded to delayed projects caused by Brexit for the reason behind this, adding that the segment has taken an upswing since H1's end.

"Despite the UK economic uncertainty, and its short-term impact on consulting projects, we have focused on continued improvement across all areas of the business," he said.

"These have all contributed to the strong growth of the Managed Services division and, post-period end, record trading in Consulting."

ECSC's Managed Services unit saw revenue rocket 63 per cent year on year to £1.24m, which was driven by the company's own proprietary software, including its managed services artificial intelligence (AI) which is embedded in many of its managed devices.

"We are pleased that from the start of H2, the previously reported reduced level of consulting services demand has now been reversed, with consulting growth recovering strongly to match the continued growth in managed services recurring revenue and cyber-incident response service," stated Mann.

"The UK cybersecurity market remains an attractive segment of the wider IT sector. Against this backdrop, we are confident that the organic growth strategy of ECSC remains appropriate.

"Managed Services remains the strategic focus of the board, to build our recurring revenue streams and target the fastest-growing segment of the market."

ECSC is optimistic that H2 will make up for H2's stumble, stating that it has "record levels" of consulting bookings for the remainder of the year and record £620,000 revenue in July.

Martin Courtney, principal analyst at market watcher TechMarketView, took a more hesitant stance on such optimism as the Brexit wagon continues to affect decision-making on cybersecurity expenditure.

"In the current political climate only time will tell if UK businesses now feel sufficiently confident in the future to unlock further cybersecurity consultancy spend over the rest of the year," he said.

"But TechMarketView has noted what looks like sufficiently sharp market growth in Managed Secure Services to keep ECSC and other providers buoyant in the meantime."