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Catch me if you can

Tim Boreham
Tuesday, November 27, 2018

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Whitehawk (WHK) 6.9 cents

As the former deputy head of US naval intelligence, Terry Roberts has a lot of secrets to impart but she’d you have to shoot you if she were to spill the beans.

Now the CEO of cyber security minnow, Whitehawk, what Roberts can tell small to medium enterprises (SMEs) for free is that when it comes to online nasties, they’re doing the equivalent of leaving their windows and doors open to burglars.

“The traditional (scamming) methods are effective because the majority of SMEs haven’t put basic cyber security measures in place,” she says. “Ransom and phishing are still very effective. And when they’ve found a method that works, they can hit several thousand companies in 24 hours.”

Family offices, she says are especially vulnerable because (a) they have lots of money and (b) they tend to run charitable foundations without technical expertise. Folk working from home are also suspect to entreaties from Nigerian aristocrats with disturbing tales of impending dispossession.

While cyber security consultancies abound, Whitehawk’s core offering is a broking platform that matches SMEs in the US with appropriate cyber security products and services. The service is free to users, with Whitehawk taking a clip from the providers.

Whitehawk’s risk analysis tool 360 Cyber Risk Framework is pitched at the big end of the town and recently won its maiden deal from a top-ten US bank worth $US325,000 ($450,000).

Based in Washington DC, Whitehawk also consults to government and businesses, including the US Department of Homeland Security.

While acting as honest broker between enterprises and the array of cyber providers is a neat idea, Whitehawk faces the small-tech problem of growing its revenues to meaningful levels while preserving cash.  In the June half, the company generated revenue of $US240,526 (up from $US23,163 previously), but lost $1.63m.

As of September, the company’s cash balance was $1.5m, with potential inflows of $860,000, if the shortfall from an unpopular rights issue is placed.

Whitehawk listed on January 24 this year, having raised $7.85m at 25c apiece. The shares had been going remorselessly south but doubled on November 2 after the company announced a new contract to provide the 360 Cyber Risk Framework to the US Government.

In mid-November, Whitehawk signed a partnership with the Virginia-based insurance agent Clarke & Sampson to source cyber liability cover for SMEs.

Tim Boreham edits The New Criterion

Disclaimer: The companies covered in this article (unless disclosed) are not current clients of Independent Investment Research (IIR). Under no circumstances have there been any inducements or like made by the company mentioned to either IIR or the author. The views here are independent and have no nexus to IIR’s core research offering. The views here are not recommendations and should not be considered as general advice in terms of stock recommendations in the ordinary sense.

Published: Tuesday, November 27, 2018

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