NCC numbers hit by sluggish UK performance

Group enjoys seven per cent bump in overall revenue despite challenges in UK business

NCC Group is rebuilding its sales team in order to offset the challenges it is facing in its UK business.

The cybersecurity VAR posted overall revenue of £250.7m in its preliminary results for its fiscal year ending 30 May 2019. This represents a seven and a half per cent rise on last year's figure.

Its Assurance division contributed £212.7m to overall revenue, with a 23.7 per cent year-on-year rise in North America and 12.9 per cent in the rest of the world, but declined one per cent in the UK.

Its Escrow business witnessed a decline of nearly three per cent to £38m, with a 10.7 per cent increase in North America offset by a six and a half per cent decline in the UK.

CEO Adam Palser said that the company has added 44 heads to its UK escrow sales teams in order to return it to growth.

"Beyond our existing on-premise software escrow solutions, we believe that the need for business resilience is just as relevant - if not more so - in the growing world of cloud services," he stated.

"Towards the end of the financial year, we launched our escrow-as-a-service (EaaS) cloud-resilience proposition and are encouraged by initial demand and feedback from the market.

"Over the course of the coming year, our intention is to prove that our EaaS product is a scaleable high-margin offering which has the potential to match the market penetration of our on-premise solutions."

Earlier this year, NCC sold off its software testing business for £3.6m. It has also reduced its year-end debt by over £7m to £20.2m.

Despite the challenges in the UK market, Palser is optimistic about the future of the company, stating that continuing high-profile data breaches present opportunities for it and that its Assurance division's headcount has grown by 102 to 1,047, widening its scope to grow.

"After a first half in which we were unable to resource all of our opportunities because of skill shortages, we have rebuilt the capacity of our technical cyber teams within the Assurance division," he said.

"Given the scarcity and demand for cyber skills, our ability to attract sufficient specialists is a pleasing endorsement of our progress towards being the employer of choice for cyber talent."

Marc Hardwick, research director at TechMarketView, warned that the company needs to focus on its success in the North American market in order to offset the issues faced by its UK business.

"Given the changes that the business has been navigating over the last 12 months - particularly in the UK, which has experienced significant staff turnover - improving operating profit, a recovering share price and overall growth show positive momentum," said Hardwick.

"Performance in the US will be pivotal to the group's overall success following the integration of acquisitions there. Given the UK business remains in decline, this has become even more important to get right."