NCC Group H1 revenues fall

(Sharecast News) - Cybersecurity firm NCC Group said on Thursday that revenues had fallen in the six months ended 31 March amid a decline in its "high-volume, lower value testing and compliance engagements". NCC said overall revenue was down 6% at £156.8m, with cybersecurity revenues dropping 7.8% to £123.5m and Escode revenues growing 1.2% to £33.3m as the unit delivered a tenth consecutive quarter of year-on-year growth. Gross margins improved slightly, up from 42.8% to 43.2%

As a result, adjusted underlying earnings slumped 15.7% to £21.5m, even as pre-tax profits surged 97.6% to £16.6m due to NCC's sale of its Fox Crypto business for £65.6m in March. Operating profits were also higher, up 70.9% at £20.0m.

The FTSE 250-listed firm noted that FY25 adjusted EBITDA remains in line with previous guidance as it looks to maintain gross margins and realise operational efficiencies.

NCC also noted that it was currently investigating options for its Escode business, including a potential sale, and was now holding discussions with interested parties.

Chief executive Mike Maddison said: "Demand for cyber security services has never been clearer, reflected in strong pipeline growth, particularly in solutions related to our investment areas.

"We are making progress reflecting the changing market and pivoting to strategic client relationships and projects underpinned by recurring revenue, multidisciplinary capabilities and global delivery."

As of 0855 BST, NCC shares were down 9.37% at 149.54p.

Reporting by Iain Gilbert at Sharecast.com