NCC Group (NCC) Trading Update summary

Financial performance and trading update

• Group like-for-like revenues declined by approximately 1% on a constant currency basis, with reported revenues around £324m, a 3% decline at actual rates.

• Cyber Security revenues returned to growth in H2 2024, up about 6% YoY, offsetting a 9.6% decline in H1, resulting in a full-year decline of 2% on a constant currency basis.

• Managed Services saw strong growth of approximately 36%, while Technical Assurance Services declined by 23% due to inconsistent demand recovery.

• Escode revenue increased by about 5% on a constant currency basis, marking seven consecutive quarters of year-on-year growth.

• Adjusted Operating Profit is expected to be ahead of consensus at around £31m, with improved gross profit margins and net debt better than expectations at approximately £39m.

Strategic and operational highlights

• Continued investment in the Manila office, now with a delivery team of around 80 colleagues.

• Focus remains on stabilising Technical Assurance and expanding Managed Services as part of the Cyber Security strategy.

• Escode is positioned for further growth through customer value enhancement, geographic expansion, regulatory engagement, and product development.

• The group is maintaining a 12-month dividend of 3.15p, payable in October 2024.

• CEO highlights strong H2 performance, ongoing business transformation, and confidence in sustainable long-term revenue growth.

Outlook and guidance

• For the four months to 30 September 2024, revenue is expected to be around £100m, with a group gross profit margin of about 38% and adjusted operating profit margin of 3.5%.

• The change in financial year end to 30 September will result in a 16-month reporting period, with audited results due in December 2024.

• Management will provide further strategic updates and host presentations with Q&A sessions for both the 12-month and 16-month results.