financial information
22nd January 2008
Interim profits up 42% as ethical security testing unit gains momentum and escrow business maintains good growth
NCC Group plc (LSE: NCC, "NCC Group" or "the Group"), the international, independent provider of Escrow Solutions, Assurance Testing and Consultancy, has reported its interim results for the six months to 30 November 2007.
Financial highlights
- Group revenue up by 42% to £16.4m (£11.5m in 2006)
- Group Escrow Solutions revenue up by 15% to £8.4m
- Assurance Testing revenue up by 193% to £5.8m
- Consultancy revenue down by 5% to £2.1m
- Group adjusted operating profits* before charges for share option schemes up 42% to £5.0m (£3.5m in 2006)
- Group adjusted operating profits* up by 41% to £4.7m (£3.3m in 2006)
- Group Escrow Solutions operating profits up by 26% to £4.6m
- Assurance Testing operating profits up by 898% to £0.8m
- Consultancy operating profits down by £73k to £0.1m (£0.2m in 2006)
- Group adjusted pre tax profits* up by 41% to £4.6m (£3.3m in 2006)
- Adjusted diluted earnings* per share up by 44% to 9.8p (6.8p in 2006)
- Interim dividend up by 50% to 2.25p (1.5p in 2006)
- Ratio of cash inflow from operating activities before interest and tax to operating profit up to 118% (108% in 2006)
- Net debt of £0.2m following acquisition of SecureTest (£1.6m net funds in 2006)
Operational highlights
- Acquisition of SecureTest, an ethical security testing business, on 1 August 2007 for up to £4.0m - Group now largest ethical security testing team in the UK
- Southern based Escrow Solutions account management team now fully operational
- Discontinuance of low margin Specialist Testing, revenue of £0.3m and operating profits of £0.1m more than covered by rapid growth of other higher margin Assurance Testing operations
- Acquisition of Escrow Europe, a pan-European escrow solutions company, also announced today for a maximum consideration of up to €10.5m in cash
- Earnings enhancing acquisition will increase the Group's share of the European escrow market and substantially develops its international presence
Rob Cotton, NCC Group Chief Executive commented:
"We have yet again delivered very strong growth against each of our key metrics of operating profits, renewable revenues and cash.
"The mix of growth between organic and acquisitive is well balanced across the Group to ensure that focus, direction and management control is maintained on the growth business streams.
"Our escrow businesses remain the principal and most profitable part of the Group. However, our established Assurance business, which contains the UK's largest ethical security testing team and our web assurance service, also now provides us with considerable forward visibility."
To view the interim results for the six months to 30 November 2007 in full, please click here
For the full Interim Results presentation (January 2008), please click here
Enquiries
NCC Group (www.nccgroup.com)
Rob Cotton, Chief Executive
Paul Edwards, Group Finance Director
Today: 020 7457 2020
Thereafter: 0161 209 5432/5200
College Hill
Adrian Duffield/Rozi Morris
020 7457 2815/2803
* Adjusted earnings measures: A reconciliation of adjusted operating profit, profit before tax and diluted earnings per share measures to reported adopted IFRS measures is set out in the notes. The Directors consider that the adjusted measures better reflect the ongoing performance of the business.
Note to editors
A software escrow agreement is a contract made between three parties: the software vendor (the licensor), the software customer (the licensee) and an independent third party (the escrow agent, such as NCC Group). Under the terms of the agreement, the licensor agrees to send a copy of the source code to the escrow agent and the escrow agent agrees to hold the source code securely, and to release it to the licensee only in the event of certain predefined trigger events. These include the insolvency of the licensor or its failure to provide support services as defined in the software license agreement.
Contract– represents an escrow agreement to provide escrow services for an owner of the software on behalf of licensees who have signed to the agreement.
Beneficiary– represents licensees who have signed to the contract and who receive the benefits of escrow as set out in the contract.
Minimum annual fee – a charge is levied on the owner of the software under a multiple agreement where there are fewer than two beneficiaries to the contract. Once two or more beneficiaries are signed to the agreement the minimum fee is no longer charged. The fee is charged at the end of the year. This will decline as it intended that beneficiaries are signed to agreements.
13 July 2007
NCC Group commences trading on the Official List
NCC Group plc, (AIM: NCC, “NCC Group” or “the Group”) the international, independent provider of Escrow Solutions, Assurance Testing and Consultancy, has today been admitted to the Official List of the UKLA and will commence trading at 8.00am on the London Stock Exchange's market for listed securities.
To read more click here