Interim Management Statement

RNS Number : 2109K

NCC Group PLC

15 April 2010

 



15 April 2010

NCC Group

Interim Management Statement

NCC Group plc (LSE: NCC or "the Group"), the international, independent provider of Escrow and Assurance Testing, is today publishing its Interim Management Statement, covering the period from 1 December 2009 to 14 April 2010.

NCC Group's trading performance remains in line with the Board's expectations and on course to deliver the anticipated levels of growth and profitability.  Whilst the economy has not materially picked up, both of the Group's divisions are trading well ahead of last year.

In the first 10 months of the financial year, Group revenues are 13% ahead of the same period last year.

Group Escrow continues to perform well with 10% revenue growth to date in this financial year.  Group Escrow renewals are now forecast to be £14.5m for the year to 31 May 2010 against renewals in the year ended 31 May 2009 of £13.6m. 

Escrow UK, the cornerstone of the NCC Group, has seen 9% revenue growth (March 2009: 4%) with a good performance from Verification Testing, which has benefited from the small upturn in system upgrades and implementations.

The verification order book continues to be solid and is at £2.0m (March 2009: £2.0m) of which £1.5m is Escrow UK verifications (March 2009: £1.5m.)

Group Escrow termination rates remain around 12% for contracts.

The Assurance division continues to perform strongly with a 16% growth in revenue in the period.

NGS and Secure Test, the Group's ethical security testing brands, have grown their combined order book to £7.2m (March 2009: £6.6m) as market demand continues to increase for high quality ethical security testing. 

As stated before, the Group's ability to recruit and retain capable, qualified testers has constrained the amount that NCC Group has been able to deliver from its order book in the period to date.  As the premier provider in this market the Group is always under pressure from competitors poaching staff and this has continued unabated. 

As the Assurance market matures, key areas such as Incident Response, Managed Services and Forensics will become vital value add non commodity offerings.  Many competitors, who are typically small and lifestyle enterprises, will not have the research and development capability to compete, or the resources to provide larger clients with these services, which is where the Group differentiates itself.  NCC Group's investment and commitment will encourage staff not only to join the Group but to stay and develop their careers.

The Group's load and performance testing unit, Site Confidence, continues to achieve monitoring renewal rates of close to 85%, which indicates a renewals value of £3.7m for the year ended 31 May 2010.  It has seen a 12% growth in new contract revenues.

During the period, the Group continued to focus on Information Security related services, which saw a marked upward trend, although as previously stated and anticipated the general commoditisedIT Advisory revenues continued to decline.

As a result the order book for Information Security and Advisory services is currently at £3.5m (March 2009: £2.8m). 

Meridian Services, the card services auditing and assurance company acquired on 19 March 2010, offers good opportunities to expand further the Group's Information Security audit offerings, as well as providing £0.6m of recurring revenues.

The Group has negotiated a new banking facility with RBS who will now become the Group's bankers.  This new facility will be for three years from July 2010 and provides a £23m revolving credit facility and a £2m overdraft.  It ensures the Group has the necessary capability to meet its acquisition objectives.

The Group continues to search for a Finance Director to fill the vacancy.  The Board is encouraged by the progress to date. 

The Group expects to report its Preliminary Results for the 12 months to 31 May 2010 on Monday 5 July 2010.

NCC Group remains well on course to deliver another strong year, in line with market expectations and is well positioned for continued long term, sustained growth.

Enquiries:

NCC Group  (www.nccgroup.com)	0161 209 5432
Rob Cotton, Chief Executive
College Hill
Adrian Duffield/Rozi Morris	020 7457 2020

 

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