Cyber security firm booms as sales team launches its own attack…

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HACKERS are everywhere, as Friday’s horrific cyber attack on the NHS showed only too graphically. In a bid to increase company vigilance, new laws are scheduled to come in next year, under which firms that are deemed to have been slapdash with their cyber security can be fined up to 4 per cent of annual turnover, if they are hit by a hack attack.

The General Data Protection Regulation, as it is known, is forcing companies to take IT security more seriously than ever – which is great news for ECSC, a fast- growing, Bradford-based business specialising in all things cyber.

The shares are 396p and should prove a rewarding long-term bet, as the firm is well managed and works in a rapidly expanding field.

ECSC was founded in 2000 by Ian Mann, a former adviser to GCHQ, the Government’s i ntelligence gathering organisation. Today, ECSC has 200 customers, including 10 per cent of the companies in the FTSE 100 index.

The group offers a variety of services. It helps clients to protect their businesses from cyber attacks and detect them fast when they occur. It provides assistance around the clock in the event of an attack and it advises company boards on the procedures they need to adopt to minimise cyber risk.

The quality of ECSC’s work has enabled it to deliver double-digit growth every year since it was founded, with revenues increasing by an average of 17 per cent per year between 2013 and 2016. Looking ahead, the firm is expected to continue expanding at a rapid pace.

The cyber security market in the UK alone is worth around £3.3 bil- lion and is forecast to soar in value, as companies t ake i ncreasing steps to protect themselves from hackers.

ECSC is relatively small, but it is one of the most experienced firms in the sector. It also joined AIM in December with the express ambition to increase in size.

At the time, the company had 57 employees. Today there are more than 100 and Mann intends to increase that to at least 200 by 2018. The sales team has already mushroomed from eight last year to 35 today. Planned before the flotation, the move is already delivering results in terms of new customers and contracts.

Recruiting high- quality people can be tough, but the best cyber experts gravitate towards independent specialists such as ECSC. There were 800 applicants for the new sales team and the group is also deluged with candidates for other posts in engineering and consulting.

Later this year, ECSC is set to open a London office and a support centre in Australia, deliberately chosen so the group can improve its 24-hour service. Hackers often work at anti-social times and being able to help frantic organisations in the wake of an attack is a fundamental part of the firm’s service.

Sales are expected to rise 33 per cent to £6 million this year, almost doubling to £11.6 million in 2018. A £2 million loss is expected this year, as ECSC invests in its future, but a small profit is pencilled in for 2018, rising steadily thereafter. Midas verdict: ECSC has had a strong debut on AIM but, with the shares at 396p, there is still plenty of potential for growth. Mann is ambitious, he operates in a booming market and the float has given his business extra impetus. Buy.