Shearwater Group (LON: SWG), the AIM-listed services and software company, grew annualised revenue 34% to £42.3m in the year to the 30th of June. Adjusted EBITDA, earnings before interest, tax, depreciation and amortisation with one-offs stripped out, rose 44% to £2.6m on the same basis.
The prior year ran for 15 months, so the company annualises it for comparison. Shares were trading 4.7% lower at 66.7p at 8.48am today, after the results, against a previous close of 70p.
Services, 96% of revenue, grew 37% on an annualised basis to £40.6m. Three renewals drove it: a c.£25m deal with a UK-based global telecoms provider, worth about £12.5m this year, a c.£9m deal with a global financial organisation (£2.7m) and a £7.3m extension with a UK mobile network operator (£3.5m).
Growth came at a thinner margin. Services gross margin fell to 18.7% from 21.6% on third-party software content, and the group margin to 19.8% from 24.2% annualised.
Software revenue fell 17% to £1.7m. The company blamed rival products, notably Microsoft Authenticator, which is sometimes bundled free, and restructured its sales operation in June.
| Metric | FY26 (12 months) | FY25 (15 months) | Change |
|---|---|---|---|
| Revenue | £42.3m | £39.5m (£31.6m annualised) | +34% annualised |
| Adjusted EBITDA | £2.6m | £2.2m (£1.8m annualised) | +44% annualised |
| Adjusted PBT | £1.4m | £0.6m | +186% annualised |
| Statutory loss before tax | £0.3m | £13.4m | Down 97% |
| Cash | £5.6m | £5.1m | Up about 10% |
The statutory loss narrowed mainly because the prior year carried an £11.1m impairment, a write-down of acquired goodwill and intangibles.
Cash generated from operations was £1.8m, below adjusted EBITDA. No cash had been collected on a major contract invoiced on the final day of the year. Receivables due after one year rose to £9.2m from £0.2m.
Group chief executive Phil Higgins framed the year as one of momentum.
I am delighted to report a second consecutive year of strong growth in revenue and underlying profitability.
Phil Higgins, Group CEO
Trading in the new financial year is in line with expectations, with new wins of £1.2m from a Japanese financial group and £1.7m from a UK central government department. Cash is £5.6m with no borrowings, and chairman Robin Southwell said a capital reduction backed at a general meeting on the 13th of October would open the door to a future dividend or buyback.