Company Announcements

GRC International Group PLC ("GRC" or the "Group")

GRC, a leading supplier of IT governance, risk management and compliance products and services, is pleased to announce the following trading update, including the trading performance of Q1 2021.

COVID-19 Operational Performance

·    V-Shaped Recovery: Our pandemic response plan allowed for a substantial drop in revenue immediately following initiation of the UK-wide lockdown on 23 March. We assumed that April would be the nadir and we planned for a V-shaped recovery starting in May and continuing through Q2.

We are pleased to report that we are currently trading ahead of that plan. Billings are almost 20% ahead of management's expectations, costs have been carefully controlled and are as a result lower than anticipated and, as a consequence, our cash position is better than we allowed for. Website traffic and transaction volume both started a sustained rebound from April.

·    Business Adaptation: The Group has quickly adapted for the post-lock down environment.

o  The majority of our previously office-based staff in all our geographic locations are now permanently home-based.

o  Our classroom training business is now completely online, with a bio-secure training centre opening in Cambridgeshire with an innovative 'Learn from Anywhere' multi-channel delivery model.

o  We are successfully delivering 95% of our cyber security, privacy and continuity services remotely to customers across the world.

o  Since lockdown, the volume of contracts in our GRCI Law business has nearly doubled.

o  DQM's revenues have, in line with expectations, increased month-on-month through Q1.

·    Subscription products: The Group has continued investing in its growing range of subscription businesses. In particular:

o  We have licenced 8,700 new users on our e-Learning Staff Awareness platform.

o  We now have 13 documentation toolkits available on a subscription model. Sales recovered in May to the level they were at prior to lockdown.  

o  We were appointed an IASME Certification Body for Cyber Essentials in late May and sales of this product range, which is sold on an annual subscription basis, are growing rapidly.

o  We continue to launch new content and module upgrades on the CyberComply risk and privacy management platform, sold by our Vigilant Software subsidiary.

o  Newly launched subscription products include a CREST-accredited Vulnerability Scanning service and, within DQM, the BreachTrak subscription service.

o  GRCI Law's Privacy-as-a-Service model, which has a strong annual retainer element, continues to see increasing uptake.

·    Customer Demand: Although the onset of the Coronavirus crisis, which led into the steep demand decline in March and April, compromised the revenue growth we had expected in Q4 of FY2020, we have seen steady week-on-week improvements in demand since the start of May.

o  During Q1, the Group has also secured 3 relatively large longer term contracts that will contribute £400k in billings during this FY.

Market

In the prevailing highly volatile climate, the Board's view currently is that security, business continuity and privacy compliance projects will continue to be critical for clients in those sectors that have ongoing business operations.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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