RC Fornax PLC (AIM:RCFX) CFO, Rob Shepherd, talked with Proactive about the company’s financial results for the six months ended February 28 and the momentum building across its defence consultancy business. Shepherd said the company has moved into “a really good place” following a difficult FY25 period, highlighting strong month-on-month improvements in billing, revenue growth and margins.
The company reported revenue growth of 40% half-on-half, while margins improved to around 30% as RC Fornax continued shifting toward higher-margin outcome-based services. Shepherd explained that the mix of outcome-based work has increased from around 50% in the prior year period to more than 70%, supporting improved profitability and stronger customer engagement.
Discussing operational performance, Shepherd said: “We’re seeing an improvement to the sort of higher-end and higher-margin outcome-based services.” He also noted that April billings were three times higher than September levels, reflecting significant sales transformation and improved pipeline conversion.
The interview also explored the broader UK defence spending environment and how RC Fornax is positioning itself to benefit from existing Ministry of Defence budgets as well as future investment plans. Shepherd estimated there is a £1 billion to £1.5 billion addressable market opportunity for the company within current defence spending levels.
On funding and financial stability, Shepherd addressed investor concerns about potential capital raises, stating the company’s cost base is now relatively stable and that management remains focused on scaling revenues efficiently.
Watch the full interview for more insights into RC Fornax’s growth strategy, defence sector opportunities and operational momentum.
Proactive: Rob, it’s good to see you. We’re talking about your financial numbers for the six months ended February 28. Overall, as CFO, where do you think the company is at?
Rob Shepherd: We’re in a really good place. Those who followed us through IPO know we had a tough FY25, particularly the second half. We’ve addressed those issues and we’re now seeing real month-on-month improvement in our numbers.
Revenue was 40% up half-on-half. Margins improved to around 30%, which is great. We’re seeing growth in higher-margin, outcome-based services. There are still challenges around operating losses because of the cost base, but despite macro uncertainties around defence funding, the overall picture is really positive.
Proactive: What numbers stand out to you as signs of improving company health?
Rob Shepherd: We focus heavily on month-on-month billing growth. Through April, billings were three times what they were in September. That’s important because it creates momentum entering the next reporting period.
Our average monthly billing during the first half was around £360,000, and we’re already about 40% ahead of that. We’ve transformed the way we do sales and we’re converting more of the pipeline successfully. We quoted around 26% month-on-month growth, which may not be sustainable forever, but it shows how much progress we’ve made since September.
Proactive: You mentioned higher-margin business is important. Is that a key part of the transformation?
Rob Shepherd: Exactly. Last year, outcome-based work represented around 50% of our business mix. It’s now above 70%.
Since IPO, we’ve talked about delivering value-for-money engineering solutions. Outcome-based work may appear more expensive initially, but it delivers better results for customers. We have internal project managers and engineering teams that work closely with customers to improve outcomes, and that message is increasingly resonating.
Proactive: The pipeline also remains strong heading into 2026
Rob Shepherd: Absolutely. There’s still uncertainty around the UK Defence Investment Plan, which larger contractors are waiting for. But when we analyse existing Ministry of Defence spending, we estimate there’s a £1 billion to £1.5 billion addressable market for us already.
We currently have less than half a per cent market share, so there’s a significant opportunity even before additional defence spending is announced. We’re focused on winning business now rather than waiting for political decisions.
Proactive: Are you comfortable with the company’s current financial position? Some investors are wondering about the possibility of another raise.
Rob Shepherd: I understand the concern. We IPO’d in February and completed another placing in December, which was difficult for everyone, especially our CEO who holds a significant shareholding.
But investors should focus on growth. The loss figures were based on monthly billings of around £353,000 to £360,000, and we’re already at around £500,000 and growing. Our cost base is relatively stable now after investing heavily following IPO, including growing headcount and fitting out a new office.
As sales increase, more revenue flows through to the bottom line. We’re delivering ahead of expectations and currently see no immediate requirement for further investment funding. If larger contracts create working capital needs, there are alternative financing tools available.
Proactive: Rob, thanks very much. Good update as always.