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H1 Trading Update & Issue of Loan Notes

2024 revenue growth target of 30% to c£8m and monthly breakeven

31 August 2023 – London, UK - Crossword Cybersecurity Plc (AIM:CCS, "Crossword", the "Company" or the "Group"), the cybersecurity solutions company focused on cyber strategy and risk, is pleased to update the market on trading in the six months to 30 June 2023 and to announce the issue of £2.015m new Convertible Loan Notes.

In the first half of 2023, Crossword shifted its focus towards establishing a clear path to profitability. Profitability will be underpinned by continuing strong revenue growth, margin improvement and cost containment.

Revenue Growth

Crossword expects to report revenue of £1.9m (unaudited) for the 6 months ended 30 June 2023, an increase of 27% from the same period in the previous year and has not seen a slow-down in cyber security spend amongst its core regulated and critical national infrastructure clients. Strong revenue growth was experienced across all revenue lines and ARR at the end of H1 2023 was £2.7m, growth of 35% compared to the same period in the prior year. Software Engineering services revenue in H1 2023 helped to strengthen ties with a key partner and provided a valuable development opportunity for staff. Crossword continued to leverage its’ 100+ client base to cross sell and has increased emphasis on targeting its larger clients that can make full use of Crossword’s range of products and services.

Revenue for the full year to 31 December 2023 is on track to meet market expectations, and Crossword’s diversified product and services offering will drive scale while managing risk.

Margin Improvement

In H1 2023, overall gross margin has increased by 4 percentage points over the same period in the prior year. Consulting margin continues to improve as revenue scales to achieve critical mass. 80% growth in the higher margin product revenues helped to drive margin improvement.


Administrative expenses have stabilised in 2023, with a strong foundation now in place to drive the revenue growth and path to profitability. Excluding one off professional fees in H1 2023, administrative expenses have increased by less than 2% over the same period in the prior year. With increasing revenue, this represents a reduction of 20% in administrative expenses as a percentage of revenue in H1 2023. Crossword is targeting a drop by half in administrative expenses as a percentage of revenue in 2024 compared to 2022.

Profitability and Breakeven

The momentum from 2022 places Crossword in a strong position to achieve revenue growth to circa £6m in 2023 and focus on margin improvement will ensure that there is a clear, carefully managed route to achieving profitability in the medium term. Furthermore, the Company is projecting the revenue growth rate for 2024 to be circa 30%, to achieve total revenue of circa £8m in 2024. Crossword is aiming to deliver EBITDA and cash breakeven on a monthly basis during the second half of 2024.

Convertible Loan Notes

The Company today announces that it has entered into agreements for a five year, unsecured, convertible loan up to the value of £2,015,000. The funds raised will be used to support sales and marketing, product and services development and to provide general working capital.

Following the General Meeting in July 2023, the company has authority to issue £2.5m additional debt. Following issue of these new Convertible Loan Notes, the Company will have £485,000 capacity for further debt. The Company intends to use the £2.015m funding to achieve EBITDA and cash breakeven in the second half of 2024.

The terms of the loan are as follows;

Related Party transactions

Gresham House Asset Management Limited (“Gresham House”) has subscribed for convertible loan notes to the value of £2,000,000. As Gresham House is a substantial shareholder in the Company, their investment constitutes a related party transaction under Rule 13 of the AIM Rules for Companies. The Crossword directors consider, having consulted with the Company's nominated adviser, that the terms of the investment by Gresham House are fair and reasonable insofar as the Company's Shareholders are concerned.

Tom Ilube CBE, CEO at Crossword Cybersecurity Plc, said:

“As the economic landscape continues to be challenging for many, Crossword is fortunate to be operating in the cyber security sector where client spend has held up well in the first half of the year. In an environment of increasing number and complexity of cyber-attacks, Crossword’s business model centred around specialist cyber security products and services with distinct USPs and a strongly growing Consulting division, saw continued strong revenue growth in the first half of 2023.

We are grateful for the continued support of our shareholders. This latest investment round is intended to take Crossword to EBITDA and cash breakeven in the second half of 2024. Investments in Crossword to date have enabled us to create a strong portfolio of products and services, and with our sole focus on organic growth, put us on a clear path to profitability.

I am excited about the opportunities with AI and LLMs (Large Language Models). We are exploring initiatives with industry partners and leading academics to investigate the application of Generative AI to cyber security. It is extremely challenging for a single company to keep track of and evaluate the many applications that are emerging, so Crossword is looking to bring together its major clients to engage with this exciting area.

2023 is shaping up to be another year of strong growth for Crossword, and we are forecasting continued growth into 2024, with revenue growth of 30% to circa £8m."

- Ends -

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.


Crossword Cybersecurity plc - Tel: +44 (0) 333 090 2587


Tom Ilube, Chief Executive Officer

Mary Dowd, Chief Financial Officer

Grant Thornton (Nominated Adviser) - Tel: +44 (0) 20 7383 5100

Colin Aaronson / Jamie Barklem / Ciara Donnelly

Hybridan LLP (Broker) - Tel: +44 (0)203 764 2341

Claire Louise Noyce

For media enquiries contact:

Duncan Gurney, GingerPR - Tel: +44 (0)1932 485 300

About Crossword Cybersecurity plc

Crossword offers a range of cyber security solutions to help companies understand and reduce cyber security risk. We do this through a combination of people and technology, in the form of SaaS and software products, consulting, and managed services. Crossword's areas of emphasis are cyber security strategy and risk, supply chain cyber, threat detection and response, and digital identity and the aim is to build up a portfolio of cyber security products and services with recurring revenue models in these four areas. We work closely with UK universities and our products and services are often powered by academic research-driven insights. In the area of cybersecurity strategy and risk our consulting services include cyber maturity assessments, industry certifications, and virtual chief information security officer (vCISO) managed services.

Crossword's end-to-end supply chain cyber standard operating model (SCC SOM) is supported by our best-selling SaaS platform, Rizikon Assurance, along with cost-effective cyber audits, security testing services and complete managed services for supply chain cyber risk management. Threat detection and response services include our Nightingale AI-based network monitoring, our Trillion and Arc breached credentials tracking platforms, and incident response. Crossword's work in digital identity is based on the World Wide Web Consortium W3C verifiable credentials standard and our current solution, Identiproof, enables secure digital verification of individuals to prevent fraud.

Crossword serves medium and large clients including FTSE 100, FTSE 250 and S&P listed companies in various sectors, such as defence, insurance, investment and retail banks, private equity, education, technology and manufacturing and has offices in the UK, Poland and Oman. Crossword is traded on the AIM market of the London Stock Exchange.


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