Cyber security services provider Shearwater Group (LON: SWG) announced the departure of its chief executive and flagged poor results after the close of trading on Friday.

At 5.19pm, AIM-quoted Shearwater revealed that Michael Stevens “has agreed to step down from the board” and has left the company. He is being replaced by Phil Higgins, who joined the company when it bought Brookcourt Solutions last October. He founded Brookcourt in 2005.

Michael Stevens was appointed chief executive of the company in October 2016, when it was still known as Aurum Mining, before it started making acquisitions in the cyber security sector as part of a buy and build strategy.

Trading shortfall 

It appears that trading is not as strong as had been expected.

In the year to March 2019, revenues are estimated to be around £23.5m, including five months from Brookcourt. Underlying EBITDA is set to be around £1.6m, which is similar to the first half figure, suggesting breakeven in the second half.

Following the acquisition of Brookcourt, Shearwater was expected to generate 2018-19 revenues of £26.4m and positive EBITDA of £300,000. There was £600,000 in cash at the end of March 2019.

Share price decline 

Shearwater raised £6m at 4p a share at the end of 2016 and raised more cash at the same price in 2017 when it made its first acquisition.

Shearwater acquired Brookcourt for £30.3m, which was part-funded by a share issue at 3.6p a share.

The share price has slumped in the past six months. On Friday, the share price bounced back by 0.33p to 1.83p by the close.

This may be reversed when the market opens on Monday.