NCC Group PLC Trading update; strategic review initiated (4732X)
February 21 2017 - 10:16AM
UK Regulatory
TIDMNCC
RNS Number : 4732X
NCC Group PLC
21 February 2017
21 February 2017
NCC Group plc
Trading update, strategic review initiated and Capital Markets
Day cancelled
NCC Group plc (LSE: NCC, "NCC Group" or "the Group"), the
independent global cyber security and risk mitigation expert, has
published a trading update and initiated a strategic review. As a
result, the Group has cancelled the Capital Markets Day due to take
place on Wednesday 22 February 2017.
Trading update
The Board has reviewed its third quarter performance to date and
the expected financial outcome for the full year ending 31 May
2017. As a result of this review, the Board has concluded that the
performance of the Assurance Division will be significantly lower
than previously anticipated.
The Board now anticipates that the Group's full year adjusted[i]
EBITDA will be approximately 20% below the GBP45.5m to GBP47.5m
range, which it published in the trading update announcement on
13th December 2016.
The rate of sales growth and subsequent delivery in the
Assurance Division in the third quarter to date has been lower than
had been anticipated in both Security Consulting and Software
Testing and Web Performance. The reduction in expected sales and
profitability in the third quarter has been seen in the UK,
mainland Europe and North America.
Whilst sales levels are traditionally significantly higher in
the fourth quarter, they are unlikely to utilise fully the cost
base deployed across the Assurance Division in the current
financial year. This will reduce the Division's profitability in
the final quarter.
The Escrow Division continues to perform in line with
expectations.
Review of strategy
In light of the deterioration in trading in the Assurance
Division through the current financial year, the Board is
initiating a comprehensive review of NCC Group's operating
strategy. This will include a review of all of the Assurance
businesses, how they operate and how they sell.
In addition, given that the significant and planned rise in
central and divisional operating costs this financial year has not
produced the anticipated improvement in sales, there will also be a
review of how the assets and resources of the Group can be more
efficiently deployed and utilised.
The review will be led by the Board, supported by externally
appointed consultants. The Board expects to update the market no
later than the Preliminary Results, due to be announced in July
2017.
The Escrow Division continues to perform satisfactorily. NCC
Group continues to firmly believe that the Assurance Division has
significant growth prospects which it is determined to capture once
the Group has reviewed its existing strategy and operations.
Cancellation of Capital Markets Day
As a consequence of this announcement, NCC Group has cancelled
the Capital Markets Day planned for tomorrow, 22 February,
2017.
Enquiries:
NCC Group (www.nccgroup.trust) +44 (0)161 209 5432
Rob Cotton, Chief Executive
Brian Tenner, Chief
Financial Officer
Instinctif Partners
Adrian Duffield/Lauren
Foster +44 (0)20 7457 2020
[i] Adjusted figures exclude the impact of exceptional items,
the results of the now closed Domain Services business, share based
payments, unwinding of discount on deferred consideration and
amortization of acquired intangible assets and any associated tax
thereon.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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