Interim Management Statement

RNS Number : 4825Q

NCC Group PLC

15 October 2013

 



15 October 2013

NCC Group

Interim Management Statement

NCC Group plc (LSE: NCC or "the Group"), the international, independent provider of Escrow and Assurance, is today publishing its Interim Management Statement to 14 October 2013, covering the trading period from 1 June to 30 September 2013.

In the first four months of the financial year, Group revenues are 20% (September 2012: 7%) ahead of the same period last year at £35.6m (September 2012: £29.6m).  Organic growth in the period has been 16%.

Rob Cotton, Group Chief Executive, comments:

"We have performed well in our traditionally quietest quarter and are on course to deliver good levels of growth and profitability.  It's still early in the year but we remain on course to meet our expectations for the financial year to 31 May 2014."

Group Escrow has performed more strongly than anticipated as the international businesses showed much improved performance.  Organic revenue grew by 8% (September 2012: 3%) and renewals are now forecast to be £18.1m for the current financial year (September 2012:  £17.9m).

The global verification order book continues to be solid, with good prospects coming through in the US and stands at £2.6m (October 2012: £2.1m).

Group Escrow termination rates continue to remain below 12% for contracts (September 2012: 12%).

Escrow UK, the cornerstone of the NCC Group, has seen revenue growth in line with expectations at 6% (September 2012: 4%) with the verifications order book standing at £2.1m (October 2012: £1.6m).

In North America revenue grew by 14% (September 2012: 6%) as the benefits of the management changes made in the last financial year are seen to be taking effect.

In continental Europe, the smallest part of the Escrow Division, revenue grew by 8% in the period (September 2012: 7% decrease) as the stable management structure and sales team make progress in developing the business. 

The Assurance division continues to perform strongly with a 26% increase in revenue (September 2012: 10%), of which 19% was organic growth (September 2012: 5%) although this period in the prior year was abnormally slow.

The challenge for the whole of the Assurance division remains the recruitment and retention of the highest quality testers.  Whilst the number of testers in the Assurance Division has grown in the period the retention rate has been lower than in the past and is running at close to 90% (September 2012: 98%).

The Group's load and performance testing unit saw a 7% growth in contract revenues and continues to achieve monitoring renewal rates of better than 90%.  The renewals base is valued at £6.6m for the year ended 31 May 2013 (September 2012: £6.2m).

The Assurance Division's overall combined order book and renewals base currently stands at £30.4m (October 2012: £26.7m) including the testing businesses combined order book of £23.8m (October 2012: £20.5m). 

Artemis - creating a safer internet - .secure.  In May 2012, the Group applied to register the .secure generic top level domain (gTLD) as part of the ICANN programme to create a new set of gTLDs. 

On 21 June 2013, it was confirmed by ICANN that the application for .secure had completed and passed the initial evaluation process.  The Group's application is one of two for .secure as a gTLD, with Amazon being the other.  ICANN are expected to complete the process by the end of the year.

Utilising the .secure domain is a component part of the Group's strategy.  NCC Group aims to create a universal environment for companies to gain much needed higher security over new and existing domains in order for end users to operate and navigate the Internet with safety and security. 

The systems, processes and environments developed so far are currently being beta tested in two major corporations from the Pioneer Group set up by Artemis.

The Group has invested a total of £1.3m in the project during the year to date, (total Investment to date £4.0m) of which £0.4m has been expensed.  The project remains on time and cost, subject to ICANN variations to the timetable for delivery of the new gTLD's. 

The Group's net debt has reduced as expected to £28.8m (October 2012: £31.7m) against the revolving credit facility of £40.0m and additional £5.0m overdraft facility. 

The Group expects to report its half year results for the six months to 30 November 2013 on Thursday, 16 January 2014.

Enquiries:

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

 

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