Shearwater Group PLC - Investment Summary

In our view, Shearwater offers investors three key attractions: (1) exposure to the fast-growing and secular expansion opportunity of cyber security provision to corporate clients, a well-established and highly attractive market; (2) software-style gross (and, over time, operating) margins from high-quality own-IP software products, being cross-sold by large and strongly performing services businesses, notably Brookcourt but also Pentest and xcina; and (3) opportunity to enjoy medium-term earnings growth, driven by a "rebound" from depressed COVID-impacted trading, by a newfound clarity, drive and focus across the previously disparate group, and by acquisitions, which we believe are now likely to be effected as the group benefits from its stronger position and market backdrop.