Principal Risks and Uncertainties
ECSC Group plc (‘ECSC’ or ‘the Company’ or ‘the Group’) is exposed to a number of Macro, Business and Financial risks. The Directors take a proactive approach to the identification and mitigation of these risks.
Summary of Risks
The most significant risks to the Group are summarised in the table below. These risks are explained in further detail following the summary. The table does not include all the potential risks associated with Group activities and are not in any order of priority.
| Principal Risks | Mitigating Actions/Factors |
|---|---|
| Economic conditions | Expenditure on cyber security has become non-discretionary in nature and is less sensitive to economic fluctuations |
| Rapid technological change | Investment in proprietary intellectual property |
| Competition | Maintaining a broad, full-service offering |
| Cyber security breach | Certifications to ISO 27001, PCI DSS and Cyber Essentials; avoidance of technologies associated with common security breaches |
| Reputation | Consistent focus on legal, financial, regulatory and technological compliance |
| Dependence on key personnel | Board and Senior Management structure and remuneration is designed to reduce the risks associated with the loss of any single person |
| Ability to recruit and retain skilled personnel | Ongoing development of a wide range of employee benefits and incentives, career progression and technical development |
| Reliance on key systems | Disaster recovery and business continuity plans |
| Client acquisition | Sale team training and development, partner programme, and expanded marketing activities |
| Client retention | Expanded service delivery function and service management layer |
| Future funding requirements | Flotation on the Alternative Investment Market of the London Stock Exchange |
Macro Risks
Economic Conditions
The Group could be affected by national and international economic factors outside its control, including an economic slowdown, changes in the monetary and fiscal policies of the Government, exchange rate fluctuations, commodity price volatility, inflation, increases in interest rates and banking sector conditions.
Any UK economic downturn, either globally or locally, may have an adverse effect on the demand for the Group’s services. A more prolonged economic downturn may lead to an overall decline in the volume of the Group’s activities and sales, restricting the Group’s ability to realise a profit.
However, given the proliferation of cyber security breaches and the damage caused, in financial and reputational terms, expenditure by corporates on cyber security is increasingly of a non-discretionary nature, such that demand has become less sensitive to general economic fluctuations.
