NCC Group (NCC) H2 2025 earnings summary

Executive summary

• FY 2025 saw a challenging first half and a stronger second half, with results in line with board expectations and strategic progress in both Cyber and Escode businesses.

• Two strategic reviews are ongoing: one for Escode and one for the cybersecurity business, with the latter independent of the Escode review.

• The group is debt free, with a higher mix of recurring revenues and a flexible balance sheet.

• The group operates globally, serving enterprise and SME clients across all sectors, focusing on operational resilience and compliance.

Financial highlights

• Group revenue declined by 7.2% year-over-year to £305.4 million; Escode grew and Cyber improved in H2.

• Gross margin improved by 1.1 percentage points to 44.5%, though absolute gross margin cash declined by £3.1 million due to lower revenue.

• Adjusted EBITDA decreased by 12.1% to £43.7 million, mitigated by £1.6 million in-year cost savings and £4 million annualized savings from operational efficiencies.

• Operating profit increased by £41.8 million year-over-year to £22.8 million, mainly due to a £40.9 million reduction in Individually Significant Items (ISI) charges.

• Net cash position at year-end was £13.1 million, a significant improvement from net debt of £52.4 million three years ago.

Outlook and guidance

• Confident in medium-term growth prospects for both businesses; Cyber expected to return to revenue growth in FY 2026, Escode to deliver low single-digit growth.

• Adjusted EBITDA, excluding non-core disposals, expected to be in line with board expectations.

• Dividend maintained for FY 2025; initial share buyback of up to 10% of share capital to commence after Escode review concludes.