NCC remains confident, despite fall in sales and deeper annual losses

Manchester-based cyber security business, NCC, revealed lower annual sales and deeper pre-tax losses in its unaudited results for the year to May 31, 2024, today.

But the group said it has enough reserves to qualify as a going concern for the next 12 months.

Revenues for the period dropped from £335.1m in 2023 to £324.4m. A pre-tax loss for the 2024 period of £27.7m is compared with a pre-tax loss of £4.3m the previous year.

The board is declaring a 12-month dividend of 3.15p per ordinary share, equal to that paid in the prior period.

It is the board’s intention to propose a final dividend for the 16-month period ending September 30, 2024, of 1.50p per ordinary share in December 2024, which will require shareholder approval at the AGM in 2025. This amount is equivalent to the interim dividend previously paid, albeit for the final four-month period ending September 30, 2024.

Following the change in year end, the group will then move to a dividend cadence of an interim dividend for the six-month period to March 31, payable in July and a final dividend for the year to September 30, payable in February/March.

NCC said, having reviewed the current trading performance, forecasts, debt servicing requirements, total facilities and risks, the directors are confident that the group will have sufficient funds to continue to meet liabilities as they fall due for a period of at least 12 months from the date of approval of these condensed interim consolidated financial statements, which is determined as the going concern period.

During the year, Cyber Security returned to growth in H2 2024, compared with H2 2023 with an improvement in gross profit margin as a result of stronger utilisation, service mix and operational efficiencies. As expected, revenues slightly declined year-on-year on a constant currency basis.

Technical Assurance Services declined with the recovery in demand less consistent than expected.

Managed Services growth continued to accelerate in H2 2024 driven by its UK performance, and now represents 26% of total Cyber Security revenue as compared with 2023 of 18.5%.

Digital Forensics and Incident Response increased year-on-year reflecting strong demand for support following Ransomware incidents. Consulting and Implementation experienced low single digit decline as NCC enhances its proposition. Escode has now delivered seven consecutive quarters of year-on-year revenue growth, and trading for the four-month period ending September 30, 2024, is expected to remain in line with previous guidance.

Chief executive, Mike Maddison, said: “As noted in June, we delivered on our expected second six-month performance and the group also continues to trade for the four-month period to our new financial year end of 30 September 2024, in line with our previous guidance.

“The group’s transformation journey is progressing well and is already delivering results, however, work continues.

“We have enhanced our capabilities in Cyber and diversified our routes to market, developed differentiated brands and implemented a global resourcing and scheduling model enabled by a new delivery and operating centre.

“We have made this strategic progress whilst successfully reducing our operating costs and improving our gross margin.”

He added: “In addition, we have delivered continued quarter-on-quarter growth of Escode. This could not have been achieved without the focus and resilience of our excellent management team and all our dedicated colleagues.”