In This Article:
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Revenue Growth: 6.6% growth on a constant currency basis for the stub period.
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Gross Margin: Improved by 6.5 percentage points during the stub period.
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EBITDA: Increased fivefold to GBP9.5 million for the stub period.
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Adjusted EBIT: Shifted from a loss of GBP5.2 million to a profit of GBP2.3 million.
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Cyber Security Revenue: Increased by 7.6% at constant currency, driven by UK and Asia Pac growth.
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Escode Revenue Growth: 2.9% constant currency growth in the stub period.
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Adjusted EBITDA for Cyber: From a loss of GBP5.5 million to a profit of GBP3 million.
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Adjusted EBITDA for Escode: Grew to GBP8.1 million.
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12-Month Revenue Growth: 1.7% increase, 3.5% on a constant currency basis.
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12-Month Adjusted EBITDA: Increased from GBP9.1 million to GBP27.5 million.
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Net Debt: Reduced from GBP57.5 million to GBP45.3 million.
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Cash Conversion: Just under 97%.
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Basic Earnings Per Share: Increased from 0.6p to 5.2p.
Release Date: December 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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NCC Group PLC (NCCGF) reported strong recurring revenues and improvements in EBITDA, highlighting its cash-generative nature.
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The company has made significant progress in its cyber security and Escode businesses, driven by increasing cyber threats and digitalization.
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NCC Group PLC (NCCGF) has improved gross margins through better pricing, global delivery models, and a more commercial mindset.
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The company has successfully executed on two disposals, strengthening its balance sheet and providing future optionality.
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NCC Group PLC (NCCGF) has launched new services around AI, addressing critical client needs and expanding its capabilities.
Negative Points
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The company faces challenges with lengthening sales cycles, particularly in government and public sector contracts.
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There is a noted decline in the North American Technical Assurance Services (TAS) business, requiring strategic adjustments.
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NCC Group PLC (NCCGF) is experiencing foreign exchange headwinds, impacting revenue translation.
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The company acknowledges the need for further operational efficiencies and cost management to maintain profitability.
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Despite strong performance, the macroeconomic environment and government budget changes pose potential risks to future growth.
Q & A Highlights
Q: Within the consulting business, should we expect a margin pickup as the pipeline converts over the next 12 months? A: Mike Maddison, CEO, explained that the consulting business is shifting from compliance-driven services to transformation projects and technology implementations. They are building the pipeline first before hiring more resources, leveraging their Manila delivery model for flexibility.