Cyber security specialist NCC’s transformation on track

Cyber security specialist NCC Group said its transformation is on track as it unveiled better annual revenues and profits, today.

Reporting full year figures to May 31, the Manchester-based group saw turnover rise from £215.3m to £233.2m, and pre-tax profits, after adjustments, improve to £29.5m, compared with £24.1m the previous year.

Stripping out adjustments the profit before tax recovered to £11.9m, from a £44.8m loss in 2017.

Adjusted EBITDA from continuing operations was up 29% to £42.5m.

Net debt fell from £43.7m to £27.8m.

The firm, which sold its Web Performance business for £7.5m in March, said it has made good progress on the implementation of its strategic review, with new initiatives in place to broaden and deepen the strategic plan.

There is a transformation programme in place to invest £3m-£4m each year for the next two years, with EBIT margin gains of around 1% per annum targeted in the same period.

An organisational restructure has been completed around geographical units and customer segments, while the group is undergoing significant changes to the board and executive management team.

On March 1, last year, NCC Group announced that Rob Cotton had stepped down as chief executive and executive director of the board with immediate effect. He was placed on immediate gardening leave and ceased to be an employee at the end of October.

Chairman Chris Stone said today: “We have made good progress against the strategic goals that we set for ourselves at the start of the year.

“The business has been successfully stabilised following a period of volatility.

“We have reorganised our senior management teams to improve our go-to market strategy.

“We have also maintained double digit organic growth in our Assurance division, improved our gross margin ratio and completed the divestment of the two business units identified as non-core in the strategic review.”

He added: “While much remains to be done, I am confident that the building blocks for long term sustainable improvement in business performance and shareholder returns are starting to be put in place.

“The combination of continuing growth and improving margins in the two operating divisions will deliver year-on-year improvements in adjusted EBIT in 2019 while also allowing us to make considered and targeted investments to support the business transformation programme.

“Overall, the board’s expectations for adjusted EBIT in 2019 remain unchanged.”

Chief executive Adam Palser added: “The group has excellent foundations on which to build a world-leading cyber security and risk mitigation business.

“We are working to broaden and deepen the strategic plan developed in the early part of the year, its core findings remain robust and relevant and it is now being expanded with our ‘securing growth together’ transformation programme.

“Our markets remain buoyant, our high quality customer base continues to see us providing value-added technical expertise, and our staff remain committed to building a genuinely differentiated global cyber security and business continuity group of companies.”

NCC also announced today that Tim Kowalski will be joining the company as chief financial officer on July 23. The appointment follows the announcement on June 20, that Brian Tenner, current CFO, will be leaving the group next month.