Shearwater Group - broker ups Target Price by 34% to 121p after Finals, shares 72p heading higher
Mark Watson-Mitchell - 27.10.2026
This morning Shearwater Group (LON:SWG), the cybersecurity, advisory and managed security services group, reported strong financial results for the year to end-June, with revenue increasing by 34% to £42.3m and adjusted EBITDA growing by 44% to £2.6m, driven by significant contract wins in its Services business.
The company also saw a substantial 186% annualised increase in adjusted profit before tax to £1.4m, while reducing its statutory loss before tax to £0.3m.
Cash reserves grew by 10% to £5.6m with no borrowings.
Key contract renewals and expansions, particularly with a major UK global telco provider and a leading Global Financial Organisation, underpinned this performance, and the company is well-positioned for continued growth in FY27.
Management Comment
CEO Phil Higgins stated that:
"I am delighted to report a second consecutive year of strong growth in revenue and underlying profitability.
Our Services business has continued to perform strongly, supported by major multi-year contract renewals and expansions and the quality of our specialist cybersecurity offering.
We have entered FY27 from a position of strength, with a growing blue-chip customer base, continued momentum across Services and no debt.
Combined with the actions taken to improve performance in Software, this gives us confidence that we can continue to deliver profitable growth and long-term value for shareholders."
Broker's View
Analysts Kimberley Carstens and Edward Stacey, at Cavendish Capital Markets, have reacted positively to this morning's results.
"We reiterate FY27E expectations and publish maiden FY28E forecasts that lead us to raise our target price to 121p (was 90p).
Confidence is derived from: (1) record future contracted revenue of £28.5m (+85% YoY), (2) a record pipeline following conversion of multiple major contracts in FY26, and (3) supportive secular demand drivers."
Accordingly, they have jacked up their Target Price for the group's shares from 90p to a very much higher 121p, as compared to last night's close of 72p.
My View
These shares are regaining City confidence and could very quickly blast through my recently fixed Target Price of 87p.
(Profile 14.04.20 @ 245p set a Target Price of 310p)
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(Profile 11.11.25 @ 58p set a Target Price of 72.50p*)
(Profile 20.10.26 @ 69.50p set a Target Price of 87p)
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