- The company has delivered two consecutive years of positive EBITDA (FY2023 and FY2022), indicating profitability at the operating level.
- Revenue has grown for 3 consecutive years and is now higher than the pre-pandemic FY2020 level.
- Gross margin has recovered to 61% in FY2023, matching the FY2018 level before the downturn in the GDPR market.
- The percentage of recurring/contracted revenue has increased significantly from only 2.5% in FY2018 to 73% in FY2023, providing more predictable revenue streams.
- The company's net promoter score measuring customer satisfaction has improved from 37 to 48.
- Cyber security is becoming a matter of compliance, not choice, due to changes in legislation in the US and the UK. This is an inflection point.
However, there are still some challenges:
- The company remains loss-making at the bottom line.
- Current liabilities exceed current assets, indicating potential liquidity strains.
- The company has accumulated PAYE and VAT arrears that it is still repaying.
So while GRC has made good progress in stabilizing and growing the business since 2019, generating positive operating cash flow, and transitioning to a more recurring revenue model, liquidity and bottom-line profitability remain areas that require further improvement. There are a number of negatives, but its value has collapsed from £150m to £5m and is 40% owned by the management. Micro position for me, but if the trajectory continues it could be good.
