Strong organic growth supports 13% increase in profits and dividend up 33%

22 Jan 2009

NCC Group plc (LSE: NCC, “NCC Group” or “the Group”), the independent information security assurance group, has reported its interim results for the six months to 30 November 2008.

Financial Highlights

• Group revenue up 27% to £20.8m (£16.4m in 2007) - organic growth 18%

• Group adjusted operating profits* increased by 17% to £5.5m (£4.7m in 2007) - organic growth 9%

• Escrow Solutions operating profits up 19% to £5.5m
• Assurance Testing operating profits up 25% to £1.0m
• Consultancy operating profits up 71% to £0.2m

   

• Group adjusted pre tax profits* up by 13% to £5.2m (£4.6m in 2007

• Adjusted diluted earnings* per share up by 13% to 11.0p (9.8p in 2007)

• Interim dividend up by 33% to 3.00p (2.25p in 2007)

• Ratio of cash inflow from operating activities before interest and tax to operating profit up to 119% (118% in 2007)

• Net debt of £11.9m following acquisition of NGSS Limited (£0.2m net debt in 2007) and payment of deferred consideration payments

Operational Highlights

• Acquisition of NGSS Limited, an Ethical Security Testing business, on 26 November 2008 for total consideration of up to £10.0m, established Group as largest Ethical Security Testing team in Europe
• Consultancy and Assurance have seen excellent growth as the public demands security over its information, held in both the public and private sectors
• New multi option £15m loan and overdraft facilities agreed in principle until July 2010

* 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.

Rob Cotton, NCC Group Chief Executive commented:

“Despite the current economic conditions; our focus on developing a number of complementary international information and security assurance businesses, by acquisition and organic growth, away from discretionary IT services expenditure continues to show excellent returns.

“A combination of our insulation from the worst features of the economic situation, our strong recurring revenues, cash generation and concentration on the fast growing information security markets gives us considerable confidence in our business, as demonstrated by our 33% increase in dividend. We remain on course to deliver another strong set of figures for this financial year.”

To download the Full Interim Results statement please click here the Presentation to Analysts can be found here.