20 June 2024
NCC Group plc
FY24 Unaudited Post-Close Trading Update
and
Notice of Final
Results
NCC Group plc (LSE: NCC, "NCC Group" or "the
Group"), a leading independent global cyber security and resilience
provider, presents the following unaudited post-close Trading
Update for the 12 months ended 31 May 2024 in advance of publishing
its unaudited 12-month results on 1 August 2024.
The Group's audited results for the 16 months
ending 30 September 2024, NCC Group's new financial year end
following its change in year end from 31 May to 30 September, will
be presented on 10 December 2024.
Trading Update
- key profit measure expected to be ahead of
consensus
For the 12 months ended 31 May 2024, the Board
expects:
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Group LFL Revenues to have declined by c.1% on
a constant currency basis and are expected to be c.£324m (decline
of c.3% at actual rates).
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Cyber Security revenues to have returned to
growth in H2 2024, up c.6.0%, on a constant currency basis
following a decline of 9.6% in H1 2024. This should result in a
full year decline of c.2.0% on a constant currency basis (c.4.5% at
actual rates). Managed Services growth has continued to accelerate,
increasing by c.36% and Technical Assurance Services has declined
by c.23% with the recovery in demand less consistent
than expected.
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Escode revenue to have increased by c.5% on a
constant currency basis (c.3% at actual rates) now delivering seven
consecutive quarters of year-on-year growth.
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Adjusted Operating Profit1 expected
to be ahead of consensus2 at c.£31m driven by delivering
targeted efficiencies in both gross margin and operating costs.
Group gross profit margin has improved by +c.2% YOY, supported by
an improvement in H2 2024 in Cyber Security gross profit margins of
c.800bps to c.38% as a result of strong utilisation and operational
efficiencies.
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Net debt (excluding leases) to be better than
consensus2 at c.£39m, c.£11m improvement from FY 2023,
after consistent strong cash conversion and disposal gross proceeds
of c.€9m from the DetACT non-core disposal as described in December
2023.
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Leverage (excluding IFRS 16) as at 31 May 2024
to be c.1.0x Adjusted EBITDA (excluding IFRS 16) (H1 2024:
1.9x).
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To maintain a 12-month dividend of 3.15p
payable in October 2024.
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1 Adjusted Operating Profit is
defined as Operating Profit before Amortisation of acquisition
intangibles, share based payments and Individually Significant
Items. Noting that our Final results on the 1 August 2024 will
disclose Adjusted Operating Profit on its new basis of Operating
Profit before Individually Significant Items.
2 Consensus as at 12 June 2024 and
as outlined on https://www.nccgroupplc.com/investor-relations/results-media/.
Adjusted Operating Profit consensus amounted to £29.7m and Net debt
(excluding leases) amounted to £50.4m.
Business
update
Cyber Security
The Group has delivered against its FY24
financial framework outlined in September 2023 including returning
Cyber Security to overall growth in H2 2024 YoY. The Group's
strategy remains the same, with a focus on stabilising Technical
Assurance and growing other capabilities, notably Managed Services.
More detail on Managed Services will be presented at our Capital
Markets Event at 3pm BST today -
access the webcast registration link here.
From a global delivery perspective, the Group
continues to invest in its Manila office with a delivery team of
c.80 colleagues operational.
Further information on our strategic progress
will be outlined on 1 August 2024.
Escode
As outlined at the Escode Capital Markets Event
on 25 April 2024, our Escode investment case remains clear and as a
leading global player in software escrow, the business is well
positioned for growth. The growth levers include further valuing
our customer proposition, expansion into additional verticals and
geographies, increasing awareness and education, working with
regulators to influence regulation globally, continuing to build
out our product offering, and delivering on core platform
changes.
Current
trading and outlook
As we enter a period of four months trading
(driven by a change in financial year end from 31 May to 30
September 2024), which is a historically quieter trading period, we
expect overall revenue to be in the region of c.£100m, generating
Group gross profit margin of c.38% and adjusted operating profit
margin of c.3.5% (4 months ended 30 September 2023: c.£1m adjusted
operating loss).
To provide an initial basis for comparison, total Revenue and
Adjusted Operating Profit for the 12 months ended 30 September 2023
amounted to c.£324m and c.£20m respectively.
Notice of final results
The Group expects to report its unaudited
results for the 12 months ended 31 May 2024, on 1 August 2024. The
audited results for the 16 months ending 30 September 2024 will be
presented on 10 December 2024, in line with the change of NCC
Group's financial year end from 31 May to 30 September. For both
events management will host a presentation and Q&A session,
details of which will be circulated in advance.
Mike Maddison CEO said:
"We have delivered a second-half financial performance ahead of our
Adjusted Operating Profit expectations and continued to transform
the business on many fronts. We remain confident in our ability to
create sustainable long-term revenue growth, our financial
resilience and continue to improve shareholder value. It is
exciting to see Managed Services continue to grow, which is central
to our Cyber strategy, and Escode continue to experience
consecutive revenue growth alongside its new brand launch early in
the year."
Contact
information:
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Investor
enquiries
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Yvonne Harley
Director of Investor Relations &
Sustainability
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Tel: +44(0)7824 412405
Email:
Investor_Relations@nccgroup.com
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Media
enquiries
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H/Advisors Maitland
Sam Cartwright/Genevieve Ryan
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Tel: +44(0)207 379 5151
Email:
NCCGroup-maitland@h-advisors.global
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About NCC
Group plc
NCC Group is a people-powered, tech-enabled
global cyber security and software escrow business.
Driven by a collective purpose to create a more
secure digital future, c, 2,200 colleagues across Europe, North
America, and Asia Pacific harness their collective insight,
intelligence, and innovation to deliver cyber resilience solutions
for both public and private sector clients globally.
With decades of experience and a rich heritage,
NCC Group is committed to developing sustainable solutions that
continue to meet client's current and future cyber security
challenges.
Cautionary
note regarding forward-looking statement
This announcement includes statements that are
forward-looking in nature. Forward-looking statements involve known
and unknown risks, assumptions, uncertainties, and other factors,
which may cause the actual results, performance, or achievements of
the Group to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Except as required by the Listing
Rules, Disclosure and Transparency Rules and applicable law, the
Group undertakes no obligation to update, revise or change any
forward-looking statements to reflect events or developments
occurring on or after the date such statements are
published.