NCC Group outlines cyber future

There has been a flurry of announcements from NCC Group today, with the security player sharing interim results and concluding a strategic review that has ruled out selling off the cyber business.

The first announcement to drop this morning was a statement confirming that the company had wrapped up a strategic review that leaves NCC focusing solely on its pure-play cyber security and resilience business.

The review had included the idea of a sale, but that has now been ruled out by the board, which opted to stick with the current approach.

“The board has concluded its strategic review of the cyber business, which considered all options, including a potential sale of the company, and has determined that remaining a listed company is in the best interests of shareholders at this time. The company is not in receipt of any approaches or in discussions with any party in relation to a potential sale of the company,” the firm stated.

That announcement was followed by the release of interim numbers for the six months to 31 March, which included the disposal of software and IP escrow services operation Escode in May.

Group revenue, excluding Fox Crypto, improved by 5% to £151.3m, with security revenues improving by 5.9% to come in at £118.4m, with growth of 12.5% in the UK and APAC buoying that number. Group adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 27.7% to £23.5m, which was in line with the board’s expectations.

The firm has now delivered three consecutive quarters of growth, with the UK delivering double-digit organic increases in the first half of its financial year.

NCC also saw growth in managed services, which climbed by 4.7% to £40m, with consulting and managed services accounting for 55% of revenues.

Mike Maddison, CEO of NCC Group, said that with the strategic review wrapped up and the Escode business completed, it had a clear direction going forward.

“This has been a solid first half, with very clear progress made against our strategy and a trading performance in line with the board’s expectations. The steps we have taken to simplify and refocus the group are now translating into improved operational execution and financial performance,” he said.

“I’m pleased that we’re seeing a clear shift in the quality of our growth, with more predictable revenues and increasing traction in larger, higher-value engagements. This is reflected in strong performance in the UK, our largest and most diversified market, where we are seeing good momentum in higher-value work. Progression to longer-term, multi-capability relationships is central to our strategy,” he added.

Looking ahead, Maddison indicated that NCC had been able to keep the momentum going into the second half and was tapping into continued demand for data protection services.

“The second half has also started well, and we remain confident in the structural growth drivers of the cyber security market and in our positioning as a focused, scalable business,” he said.

The board signalled in the interim results that it expected mid to low single-digit growth in security revenue for the full year to the end of September and adjusted Ebitda to be in line with expectations.