We don’t want to keep bringing up what happened last year to Optus, Medibank, or Telstra, but the cyber threat in Australia is real. According to IBM Global managing director Charles Henderson, Australia and the rest of Asia are being increasingly targeted for cyberattacks, and the average cost of each cyber breach in Australia, reached $US2.92 million, up 3.4% from the year before.

No one knows if it’s going to be their turn next and instead of having to pay hefty ransom when the time comes, businesses and even government enterprises are more open to engage with IT and cybersecurity specialists like Cirrus Networks (ASX: CNW). Cashing in on the trend, Cirrus delivered its highest H1 revenue on record of $56.7m in H1 FY23, an increase of 27% on previous corresponding period (pcp). 

The strong revenue was generated whilst also delivering a record backlog (customer orders contracted but not delivered or recognised) into H2 FY23 of $16.2m up from $12.1m at the end of FY22, and $9.3m on pcp. 

Cirrus also managed to flip things over by delivering record profit before tax of $1.3m against $2.2m loss on pcp and record EBITDA (pre options) of $2.2m against $379k loss on pcp. If there’s anything else to add to their strong growth outlook for the rest of the year, Cirrus maintained a strong debt-free balance sheet, cash at bank of $9.5m as of 31 Dec, and net working capital of $6.5m. According to them, this strong cash position is testimony to their disciplined approach to cash and capital management with the Company having a 95% EBITDA to cash conversion since 2019.

The half year’s success is mostly attributed to the Company’s high-profile client base, with Government sectors contributing to 49% of the H1 FY23 revenues while major Global and Australian Resources companies contributing up to 20%. Besides, Cirrus has managed to reduce overhead costs by 10% lower than pcp and were at the lowest H1 level in four years.

Commenting on the H1 FY23 result, Cirrus Managing Director, Chris McLaughlin, said:

“It is very pleasing to report this record half result and continue the momentum from 2H22. The speed and success of the business turnaround has put Cirrus in a very strong position to take advantage of opportunities that are likely to present in these uncertain economic times.” 

As the Company continues its journey to become a managed service provider of choice within the Australian IT sector, it will spend the remainder of FY23 focusing on growth aspirations and acquisition targets, primarily underpinned by contributions from Perth-based energy company ENI Managed Service and the transition of drinking water and wastewater company Icon Water’s managed service contract. 

Record backlog, positive pipeline of opportunities, disciplined overhead cost controls, and strategic focus on higher margin services revenue will resume into the second half year too.