Shearwater is an AIM-listed UK cybersecurity group. It mostly installs and supports other firms' security technology for telecoms, banks and government, and sells a small line of its own access-control software. After two years in which customers delayed spending and revenue fell to £22.6m, it won several large multi-year contracts, and revenue reached £39.5m over the 15 months to June 2025. The catch is that profit has not kept pace: the half to December 2025 had £14.0m of revenue but adjusted EBITDA of about zero.
Security for telcos, banks and Whitehall
Shearwater runs two divisions. Services is 92-94% of revenue. It supplies third-party software and hardware, engineering, advisory work and penetration testing (paid attempts to hack a client's systems). Brookcourt Solutions is the main Services brand, and Pentest is a separate business.
Software is the small, high-margin part. It sells proprietary identity verification and access management products, including multi-factor authentication, under the SecurEnvoy brand. Clients can run them on their own premises or in a private cloud. Customers include banks, a building society and UK defence suppliers.
Services customers are mainly telecoms, financial services and government. Brookcourt is an approved supplier on the government's G-Cloud framework, which lets public bodies buy without a full tender. The group says it also grows by acquisition, but the filings describe no deals in this period. 17 Mar 2026 11 Nov 2025 26 Nov 2024
Two years of delayed budgets
Customers put off spending decisions, and large contracts slipped. Revenue fell from £26.7m in FY23 to £22.6m in FY24, though adjusted EBITDA (profit before one-offs, interest, depreciation and amortisation) returned to £0.9m after a loss the year before.
On 3 April 2024 the company said revenue would come in at about £22.5m. Market forecasts had been £32.5m, so this was a large miss. The chair admitted the company was 'at the mercy of timing' on big contracts and said the shares were languishing. He noted that cash, then £5.0m, was roughly half the market value.
Management responded by folding smaller units into larger ones: Xcina Consulting into Brookcourt, and GeoLang software into SecurEnvoy. The shares traded around 49p in March 2024 and drifted to 32p a year later. 3 Apr 2024 24 Jul 2024 22 Nov 2023
Big telco contracts and a longer year
Orders returned from late 2024. Brookcourt won a $12.8m five-year contract with a global mobile operator, a £3.7m contract with a UK media and telecoms company, then a £8.4m extension and a £4.4m data security contract. It also gained G-Cloud 14 supplier status.
Over the first half of FY25 the group still lost money at EBITDA level (£0.4m) as lower-margin sales took over. It then moved its year end from 31 March to 30 June, producing a 15-month reporting period. Over those 15 months revenue was £39.5m and adjusted EBITDA £2.2m.
The group also changed its revenue accounting. Cloud-hosted software and third-party support contracts are now recognised over the contract life, not on delivery, and past figures were restated. It booked an £11.1m non-cash write-down of goodwill and intangibles. The shares rose from 32p in April 2025 to 63p in September.
The CEO said that 'budgets are now being unlocked'.
The chief executive's review said decisions had been deferred in FY23 and FY24 and could not be deferred indefinitely. 26 Nov 2024 7 Nov 2024 2 Apr 2025 7 May 2025 30 Jan 2025 11 Nov 2025 9 Jul 2025
“While procurement cycles can still be elongated, budgets are now being unlocked in line with the trend towards organisations committing to essential cybersecurity spend” 11 Nov 2025
Growth that does not yet reach profit
In the half to December 2025 revenue rose 31% to £14.0m, with Services up 37%. Gross margin fell from 30% to 20%. Management attributes this to the new accounting, which spreads the cost of third-party contracts over their lives, and to the mix of work. Software revenue fell 12% to £1.1m. Pentest returned to profit after restructuring in FY25.
New wins included a £7.3m three-year data security extension with a mobile operator, a £9m renewal with a global financial organisation and a £1.3m network monitoring contract. Cash was £2.2m at the half year, which management put down to the timing of one payment, reversed on 20 January 2026. The shares fell from 62.5p in October 2025 to 37.5p in March 2026. 17 Mar 2026 4 Dec 2025 3 Feb 2026 12 Mar 2026
Lumpy contracts, thin margins
Results depend on when a few large contracts are signed and delivered. In FY24 delays cost the group about £10m of expected revenue and the shares fell. In FY25 and FY26 the same contract-led model produced growth and results ahead of expectations.
Faster revenue has brought lower margins. Services gross margin was 17% in the latest half, against 62% in Software. Software has been flat to falling, and the target of returning it to growth in FY26 was not met in the first half. The group has held cash and carries no debt. 24 Jul 2024 17 Mar 2026 11 Nov 2025
A steady executive team and a changing board
Phil Higgins has been CEO throughout. In November 2025 he bought 10,000 shares at 48.7p, bringing his stake to about 11.2%. Jonathan Hall became CFO in September 2024, after an interim CFO, Adam Hurst, followed Paul McFadden in late 2023.
The board has turned over. David Williams stepped down as chair after about a decade, and Robin Southwell OBE, a former Airbus UK chief executive, took over from February 2026. NED Giles Willits left in April 2026. In May 2026 Southwell's company Aeralis Ltd went into administration. Jonathan Entract joined as a non-executive and audit chair in July 2026.
Management's record on forecasts is mixed. The April 2024 miss was large. Guidance for FY25 and FY26 was then met or beaten. Full vesting of staff share options for FY26 requires £3.0m of adjusted EBITDA; the group reported about £2.5m. 18 Nov 2025 25 Sep 2024 10 Oct 2023 15 Jan 2026 1 Apr 2026 18 May 2026 2 Jul 2026 30 Jan 2025 27 Jul 2026
A £25m renewal and a bigger revenue base
On 27 July 2026 the company said FY26 revenue was about £42m and adjusted EBITDA about £2.5m, both ahead of market expectations, with net cash of £5.6m. A week earlier it announced a roughly £25m five-year extension with a global telecoms provider, about £12.5m of which was recognised in FY26. The payment is due early in FY27, and the company said cash was 20% below expectations at the year end.
The directors plan to ask shareholders to approve moving money between reserves on the balance sheet, which would allow buybacks or dividends. The shares were 62p in July 2026 and 67p in October. 27 Jul 2026 1 Jul 2026 14 Jul 2026
Margins, G-Cloud 15 and a software turnaround
Management has pointed to improving margins as higher-value solutions are delivered. Brookcourt's G-Cloud 15 listing grows its approved offerings from 31 to 55, and Pentest has its own place. The company expects public sector cybersecurity spending to rise. For Software, it sees the Middle East and West Asia as growth markets and has signed a distributor, AdvanzaTech.
The company has not given a numerical target for FY27. The first tests are whether margins improve as management says and whether the shareholder vote on reserves leads to returns of cash. 17 Mar 2026 6 Aug 2026 27 Jul 2026
Written by AI from Shearwater Group's own announcements since Oct 2023 · every paragraph links to its sources