NCC : Half year results

NCC Group plc (LSE: NCC, 'NCC Group' or 'the Group'), the independent global cyber security and risk mitigation expert, has reported its half year results for the six months to 30 November 2016.

Highlights

• Group revenues increased by 35% (November 2015: 50%) to £125.8m (November 2015: £93.5m). Organic growth of 18% (November 2015: 17%)
  • Assurance Division revenue increased by 42% (November 2015: 57%) to £104.8m (November 2015: £73.8m) - organic growth 21% (November 2015: 17%)
  • Escrow Division revenue increased by 14% (November 2015: 7%) to £18.7m (November 2015: £16.4m)
• Group adjusted EBITDA* increased by 15% to £21.3m (November 2015: £18.5m)
  • Assurance Division EBITDA increased by 18% to £13.1m (November 2015: £11.1m)
  • Escrow Division EBITDA increased by 14% to £10.6m (November 2015: £9.3m)
• Group adjusted profit before tax** increased by 5% to £16.7m (November 2015: £15.9m)
• Group profit before tax was £7.4m (November 2015: £7.5m)
• Adjusted fully diluted earnings per share^ 4.6p (5.0p in 2015)
• Interim dividend maintained at 1.50p (1.50p in 2015)
• Three large unrelated contract cancellations in quick succession and one deferral in the Assurance division impacted rate of growth
• Acquisitions of North American Payment Software Company in September 2016 and Virtual Security Research in November 2016

Board change

• Paul Mitchell, the Chairman, has notified the Board that he intends to step down on 31 May 2017 - see separate release.

Outlook

• Adjusted EBITDA* for full year to 31 May 2017 expected to be in the range of £45.5m to £47.5m - showing growth of up to 5% year on year
  • H1:H2 adjusted EBITDA* expected split will be approximately 46%:54% based on the midpoint of £46.5m
• Orders and renewals up 49% totalling £112.8m (November 2015: £75.7m) for the current financial year

* Adjusted EBITDA is adjusted operating profit as defined at *** below, excluding depreciation and amortisation of software and development costs

** Adjusted profit before tax excludes exceptional items, the loss incurred by Domain Services, share based payments, unwinding of discount on deferred consideration and amortisation of acquired intangible assets.

*** Adjusted operating profit excludes exceptional items, the loss incurred by Domain Services, share based payments, unwinding of discount on deferred consideration and amortisation of acquired intangible assets.

^ Adjusted full diluted earnings per share is as calculated on page 25.

Rob Cotton, Group Chief Executive, commented:

'We have continued to see strong organic growth across the business, particularly in Assurance, albeit that earlier contract cancellations were disappointing. Our EBITDA has increased by 15% and we are maintaining our interim dividend at 1.50p - a clear indication of our confidence in our growth prospects for this year and beyond.

'With our global reach and increased product range, we are in a prime position to help organisations as they tackle compliance with the General Data Protection Regulation (GDPR) ahead of 25 May 2018.

'GDPR preparation should already be well underway but many organisations still believe that preparing for GDPR sits with the IT department and the legal team. In our view, it belongs with the Board.'

For the full press release, visit our investor relations page: https://www.nccgroup.trust/uk/about-us/investor-relations/stock-exchange-announcements/

Enquiries:

NCC Group (www.nccgroup.trust)	[phone]
Rob Cotton, Chief Executive
Instinctif Partners
Adrian Duffield/Lauren Foster	[phone]

Published date: 19 January 2017