Year End Trading Update

NCC Group PLC 09 May 2006 NCC GROUP YEAR END TRADING UPDATE NCC Group plc, a leading independent provider of IT assurance, security and consultancy services, is publishing today a trading update covering the period since the Group announced its interim results on 23 January 2006. The Group's year end is 31 May 2006. The Group's overall trading performance during the second half of the year has been good, in line with the Board's expectations, showing strong organic growth in both revenue and profit together with good cash generation. The year as a whole has seen a difficult trading environment, with the H1:H2 split of profits for the year ending 31 May 2006 expected to be 40:60 and in line with the consensus range of the market. The Board's expectation for the Group's further progress remains unchanged for the next financial year. The Escrow division continues to perform strongly. Annual renewals for the 2006 /2007 financial year are expected to be £8.1 million, up from £7.1 million for the year to 31 May 2006. The number of beneficiaries to NCC Group escrow agreements now exceeds 13,200 up from 12,800 in January 2006, and the average number of agreements per customer has increased to 2.0 (1.9 in January 2006.) Board expectations for contract terminations continue to be below 11%, against the planned for rate of 13%. The Group has seen very encouraging performances from both its German and US subsidiaries. The Escrow sales model has been trialled, refined and implemented in Germany and the Board is confident that it will prove successful. The US business, acquired December 2005, has been successfully integrated. The Board sees a good opportunity to invest in an account management model to grow the customer and renewal base in the US. The US renewal base is likely to be in excess of $1.2 million in this financial year. The Testing Solutions division order book continues to develop and now stands at £2.0 million (£1.5 million in May 2005) in line with the Board's expectations. The demand for Escrow Verification Testing continues to grow, with a strong renewal trend by customers to re-verify their applications as they are upgraded. The Penetration Testing unit has continued to grow strongly as corporate network and electronic trading security continues to be a major boardroom issue. Additionally, the Group has benefited from the increasing importance being placed on the independent specialist testing of applications' performance and load capacity as companies recognise that this is as critical as the capability of the software. The Consultancy division has returned to profitability, as expected, and although the climate remains tough, the order book continues to develop and now stands at £1.4 million (£1.3 million in May 2005.) The first four months of the Group's financial year are traditionally the quietest for this business. The competitive nature of consultancy has been further exacerbated by the increasingly complex procurement processes adopted by local and central government. The Group continues to generate cash strongly. The Board expects the Group to be cash positive at the end of the financial year even after accounting for the cost of the US acquisition from £1.5 million net cash positive as at 30 November 2005. The Group expects to report its preliminary results for the year to 31 May 2006 in mid-July 2006. Tuesday 9 May 2006 Enquiries: NCC Group (www.nccgroup.com) 0161 209 5432 Rob Cotton, Chief Executive Paul Edwards, Group Finance Director College Hill Adrian Duffield/Corinna Dorward 020 7457 2020 This information is provided by RNS The company news service from the London Stock Exchange

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NCC Group (NCC)
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