AIM:SWG · Technology · Cybersecurity, managed security services and professional advisory solutions (AIM-listed)

Shearwater Group plc

Shearwater Group plc is a UK-based, AIM-listed group providing cybersecurity, managed security and professional advisory solutions, operating through two divisions: Services (cybersecurity solutions, managed security, advisory and penetration testing via brands including Brookcourt Solutions and Pentest) and Software (proprietary multi-factor authentication/access management and data discovery tools via SecurEnvoy). Services generated 96% of FY26 revenue and Software 4%. The Group serves a blue-chip client base including FTSE 350, Fortune 500 and government customers across the UK and internationally.

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Sources: Companies House (10), Company website (1)

FY2027Next report expected 3 Nov 2027
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Sixty seconds on the FY2026 report
Shearwater Group plc, which sells cybersecurity services and software, reported revenue of £42.3m for the year to 30 June 2026, against £39.5m the previous time, though that earlier figure covered 15 months. Its loss after tax narrowed to £394k from £12.0m. Large contract renewals and wins in its Services division lifted sales, but more of this work involved reselling other firms' products, which earns less. The earlier loss included an £11.1m write-down in the value of past acquisitions; there was no such charge this year. This year's figures included restructuring costs at the Software division, where sales fell. Cash at the year end was £5.6m, up from £5.1m, with no bank borrowings and almost nothing raised from shareholders. No dividend was recommended, though a legal process is under way that could allow dividends or share buy-backs in future. Management said trading in the early months of the new year was in line with expectations, and contracted future revenue stood at £28.5m. The auditor raised no doubts about the company's ability to keep operating, but the report warns of reliance on certain large customers, with no guarantee that contracts will be renewed.
From the reportevery line sits on the page it names
What drove revenue
Major contract renewals and expansions in Services
c.£25m telecoms packet monitoring/forensics contract renewal (£12.5m recognised in FY26); £9m financial organisation Advanced Email Gateway contract (£2.7m impacting FY26); £7.3m mobile network operator contract (£3.5m impacting FY26)
page 9
And
Public sector framework expansion
Approved Brookcourt suppliers on G-Cloud 15 rose 77% from 31 (G-Cloud 14) to 55; Pentest secured independent presence across cloud support, security strategy, audit quality and red teaming
page 9
What moved the marginheadwind
Mix shift toward third-party hardware/software resale in major Services contracts
Services gross margin fell from 21.6% to 18.7% due to structure of major programmes involving significant third-party software
page 9
Andtailwind
Tight control of administrative expenses
Underlying administrative expenses of £5.8m, an annualised 1% reduction, achieved despite 74% top-line revenue growth over two years
page 27
One-offs in the year
£200k charge: Restructuring costs (SecurEnvoy Limited right-sizing)
page 26
What management said
In the early months of FY27 Shearwater has traded in line with expectations. The level of interest in services of all companies within the Shearwater Group has remained high... we look forward to the remainder of FY27 and beyond with optimism.
page 11
After the year end
On 25 September 2026 a circular was sent to shareholders proposing a capital reduction (cancellation of deferred shares and the share premium account); resolutions overwhelmingly approved at a General Meeting on 13 October 2026; Directors now intend to apply to the High Court to complete the capital reduction, creating distributable reserves
page 85
The dividend
No dividend recommended for FY26 (FY25: £nil). A capital reduction process commenced in June 2026 (first stage approved by shareholders 13 October 2026) is intended to create distributable reserves enabling the Company to declare a dividend and/or undertake a share buy-back in the future
page 6
Going concern and the audit
Unqualified ('true and fair') audit opinion from HaysMac LLP. Directors adopted the going concern basis having reviewed budgets to June 2028 and performed a reverse stress test assuming up to a 15% reduction in revenue across all lines, under which the Group retained positive cash reserves; auditor concluded no material uncertainties relating to going concern were identified. Key audit matters: revenue recognition, capitalisation of development costs under IAS 38, recovery of goodwill and other intangible assets, and recoverability of investments in subsidiaries/intercompany receivables (Parent company only)
page 52
The risks it names first
Technology: rapid technological change and emergence of new standards could render existing technology/products obsolete; AI increases pace of both threats and required response (pre- and post-mitigation risk level: High)p.32
Intellectual property: risk that competitor products outpace internally developed IP or that IP protections are infringed (pre-mitigation: Moderate; post-mitigation: Low)p.32
Recruitment and retention of key personnel: inability to attract/retain highly skilled employees could delay strategy execution (pre- and post-mitigation: High)p.33
Key contracts: reliance on certain material customers; no guarantee of contract renewal; changes in client budgets could adversely affect results (pre- and post-mitigation: High)p.33
Read from C001184-AR-2026-website.
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