NCC share price tumbles 30% on profit warning

NCC Group, the listed cyber security and risk mitigation firm, has issued another profit warning for the current financial year and initiated a strategic review of the business.

The Manchester-headquatered company’s share price tumbled by 30% to 125p on the news when it was announced late yesterday afternoon.

NCC said trading in its Assurance arm in the year to the end of May will be “significantly lower” than it had previously anticipated.

Due to this, NCC said its full year adjusted EBITDA will be 20% lower than the £45.5m to £47.5m range it first announced in December.

Sales growth for the Assurance arm in the third quarter has been lower than anticipated, both for Security Consulting and Software Testing work, and for the Web Performance unit, resulting in lower sales and profit across the UK, Europe and North America.

NCC has initiated a review of its operating strategy, including its Assurance arm, and said it will also look at how it can use its assets and resources more efficiently across the business.

The firm’s Escrow arm has continued to trade in line with expectations, it said.

The group has cancelled its Capital Markets Day, which had been due to take place today.

Group revenue was £125.8m for the six months to the end of November (2015: £93.5m). However, it has suffered three large contract cancellations in quick succession and one deferral in the Assurance division, which reduced the group’s rate of growth in the financial year. Pre-tax profits remained static for the half year – at £7.4m (2015: £7.5m). Adjusted pre-tax profits after exceptional items was 5% up at £16.7m.

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