Shearwater Group – tomorrow’s results will indicate recovery is underway and could show how cheap its shares are at 58p, brokers TP 78p

Mark Watson-Mitchell – 10.11.2025

Tomorrow morning, Tuesday 11th November, will see the £13.8m-capitalised Shearwater Group (LON:SWG) announce its Final Results covering the 15-month trading period to end-June.

I believe that they will show that the cybersecurity, advisory, and managed security services group is showing some decent corporate recovery.

Its shares at 58p have performed quite well since May, when they were just 30p.

Will tomorrow’s statement guide for ongoing progress in its recovery process?

The Business

The group is an award-winning group providing cyber security, managed security and professional advisory solutions to create a safer online environment for organisations and their end-users.

Operating through four offices and servicing clients in some 50 countries globally, the group's differentiated full-service offering spans identity and access management and data security, cybersecurity solutions and managed security services, and security governance, risk and compliance.

Its growth strategy is focused on building a scalable group that caters to the entire spectrum of cyber security and managed security needs through a focused ‘buy-and-build’ approach.

With 90 employees, the company's segments include Software and Services.

The Software segment designs and builds software to help clients secure and make their corporate environments compliant.

The Services segment delivers the company's managed security and cyber solutions, test, advisory and consultancy as well as its strategically selected third-party partners' technical solutions.

Its solutions include cyber, security and monitoring; data discovery; identity and access security; penetration testing and red teaming; risk management advisory and assurance; security operations centre; IR35 solution; mind security; and artificial intelligence (AI) driven endpoint protection.

The company's cyber, security and monitoring solutions include SecurEnvoy, Brookcourt Solutions, and Pentest.

Its data discovery solutions include regulatory compliance, digital transformation, data subject access requests.

Expectations

In July the group guided the market that its extended period FY25 revenue and adjusted EBITDA were anticipated to be slightly ahead of market expectations, with expected revenue of some £41m, representing an annualised year-on-year increase of around 45% (FY24: £22.6m), and expected adjusted EBITDA of c.£2.2m, an annualised year-on-year increase of some 100% (FY24: £0.9m).

Broker’s View

On the back of the Trading Update, analysts Edward Stacey and Kimberley Carstens, at Cavendish Capital Markets, increased their estimates.

“We are increasing our revenue FY25E by 5.1% and EBITDA by 11.1%.

The trading statement refers to a positive demand environment and a strong order pipeline.

We believe the statement supports our FY26E and make no change to our FY26E forecasts.

We maintain our 78p target price.”

The analysts upgraded their estimates for the 2025 extended trading period to now look for revenues to rise to £41.0m (£22.6m) while it swings from a £0.63m loss to an adjusted pre-tax profit of £0.6m, lifting earnings per share to 2.4p (0.26p).

For the current year to end-June 2026 the analysts go for £35.5m, with £1.1m profits and 4.5p per share in earnings.

My View

Tomorrow’s results could well come through better than the broker’s hopes.

Their 78p Target Price is a sign of their hope that the recovery is now well underway, we shall see just what the company has to say in the morning.

(Profile 14.04.20 @ 245p set a Target Price of 310p)

(Profile 23.03.22 @ 118p set a Target Price of 145p)

(Profile 06.11.23 @ 35p set a Target Price of 45p*)

(Profile 25.07.24 @ 45p set a Target Price of 56p*)

Asterisks * denote that Target Prices have been achieved since Profile publication.