NCC Group PLC Trading Update (3515R)
21 September 2017 - 4:00PM
UK Regulatory
TIDMNCC
RNS Number : 3515R
NCC Group PLC
21 September 2017
21 September 2017
NCC Group plc
Trading update
-- Trading in line with Board's expectations
-- Continuing revenues increased by 5.6% to GBP62.7m during the period (Q1 2017: GBP59.4m)
-- Disposal of the Web Performance and Software Testing businesses are underway
-- Target Operating Model implementation continues on track
NCC Group plc (LSE: NCC, "NCC Group" or "the Group"), the
independent global cyber security and risk mitigation expert, is
today publishing a trading update covering the 3 month period from
1 June 2017 to 31 August 2017 ('the Quarter', 'Q1') ahead of its
Annual General Meeting.
The Group continues to trade in line with the Board's
expectations for the full year Adjusted EBIT(1) , as set out on 18
July 2017 in the Preliminary Results for the year ended 31 May
2017.
Operational highlights
Continuing revenue increased by 5.6% to GBP62.7m (Q1 2017:
GBP59.4m) during the period. The components of growth for each
division are set out in the table below:
Q1 2017 FX Acquisitions Organic Q1 2018 All Growth
GBPm (2) (3) GBPm GBPm GBPm /
GBPm GBPm %
-------------------- -------- ------ ------------- -------- -------- ------------
Escrow 8.4 0.1 - 0.5 9.0 0.6 / +7.1%
-------------------- -------- ------ ------------- -------- -------- ------------
Assurance 51.0 0.6 2.9 (0.8) 53.7 2.7 / +5.3%
-------------------- -------- ------ ------------- -------- -------- ------------
Continuing revenue 59.4 0.7 2.9 (0.3) 62.7 3.3 / +5.6%
-------------------- -------- ------ ------------- -------- -------- ------------
Domain Services (1.1) /
(4) 1.1 - (1.1) - - N/A
-------------------- -------- ------ ------------- -------- -------- ------------
Group total 60.5 0.7 1.8 (0.3) 62.7 2.2 / +3.6%
-------------------- -------- ------ ------------- -------- -------- ------------
Escrow revenue comparison benefitted from a one-off change in
revenue recognition as noted at end of last year. Excluding this
benefit, Escrow growth of 2.4% was in line with expectations.
In Assurance, the businesses in the UK, USA, Netherlands and
Denmark which have long-term strategic importance, all delivered
strong double digit organic growth. This included a partial
recovery in High Assurance revenues in Fox-IT. The Assurance result
also reflected the sharp fall in sales of third party products in
the period (approximately GBP6.0m) in our UK Managed Security
Services business ('MSS' - formerly known as Accumuli). We are
re-balancing this business away from single transaction re-selling
of third party products towards more strategic and higher value
added sales and hence little or no recovery is targeted here while
the potential for further falls is also limited.
Overhead costs increased in line with expectations. We recently
completed the move of our IT infrastructure and almost 400
colleagues into our new head office in Manchester. Net debt remains
in line with expectations.
Strategic Plan update
The disposals of the Web Performance and Software Testing
businesses are underway and proceeding in line with the Board's
expectations. Between them Q1 revenues were slightly ahead of Q4 in
the prior year.
The implementation of the new Target Operating Model continues
on track. We have also made good progress in revising our sales and
incentive structures, with the goal of securing larger, more
integrated and higher valued added revenues across our portfolio of
Assurance services.
Brian Tenner, Interim Chief Executive, comments:
"We have made a solid start to the new financial year. Results
are in line with the Board's expectations and the implementation of
the Strategic Plan is gathering momentum with a number of new
initiatives underway. These are being closely managed and monitored
to ensure we achieve the target benefits.
"Our underlying markets remain buoyant. We continue to deliver
growth while also re-positioning the business to focus on areas
that leverage our key strengths and increase margins, through
growth in higher value added services."
The Group expects to report its half-year results, for the six
months to 30 November 2017 on Tuesday, 16 January 2018.
21 September 2017
(1) 'Adjusted' items exclude exceptional items, the results of
the now closed Domain Services business, share based payments,
unwinding of discounts on deferred consideration and amortization
of acquired intangible assets.
(2) FX impact retranslates the prior year reported figures at
the current year weighted average exchange rates
(3) Acquisitions reflect the purchase of PSC and VSR in the
second half of the prior year
(4) The Domain Services business unit was exited in the prior
year and revenue ceased entirely in December 2016.
NCC Group
Enquiries
NCC Group (WWW.nccgroup.trust) +44 (0) 161 209 5432
Chris Stone Executive Chairmans
Brian Tenner Interim Chief Executive
and CFO
Maitland +44 (0) 207 379 5151
Neil Bennett / Al Loehnis
This information is provided by RNS
The company news service from the London Stock Exchange
END
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