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NCC stirs in 'lumpy' bits of Fox, produces sales gravy. But market still chokes
Doesn't seem to've killed its appetite for acquisition
UK-based infosec outfit NCC Group has weathered a tricky summer period that involved some contract deferrals and cancellations while still managing to post a profit.
Group revenues for the four month till the end of September increased £79.6m compared to £58.5m in the same June to September period last year.
The increased sales came in despite a number of setbacks to NCC’s core assurance division including “three large unrelated contract cancellations, a large contract deferral and difficulties with some managed services contract renewals”. In a statement, NCC said these various troubles were unrelated to each other.
Rob Cotton, NCC Group chief exec, said: "Overall, we continue to make good progress across the business with strong organic growth. However, we have been hit by a number of unrelated adverse developments in the Assurance Division that will have an impact on profitability between the first and second half of the financial year.”
These assurances failed to reassure markets, with a third of NCC Group’s market capitalisation getting wiped out following the release of the update. NCC shares were down 36.42 per cent to 219.8 in London trading at the time of publication and continue to drop.
NCC is still looking to expand its business through the purchase of “boutique cyber security consultancies over the next few months,” Cotton added.
Forensics and incident response outfit Fox-IT, which NCC acquired last November for £93.5m, is being “slowly integrated” into the group but the “lumpy nature of its product revenues and a large contract deferral allied to complex government relationships makes this process more challenging”, according to NCC. ®