TIDMNCC
RNS Number : 8841A
NCC Group PLC
16 October 2009
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16 October 2009
NCC Group
Interim Management Statement
NCC Group plc (LSE: NCC or "the Group"), the international, independent provider
of Escrow and Assurance Testing, is today publishing its Interim Management
Statement, covering the period from 1 June 2009 to 15 October 2009.
NCC Group's trading performance remains in line with the Board's expectations
and on course to deliver the anticipated levels of growth and profitability.
Despite the challenging current economic environment, both divisions are trading
well ahead of last year.
In the first four months of the financial year, typically the quietest trading
period, Group revenues are 25% (October 2008: 29%) ahead of the same period last
year, with both divisions showing good growth. Excluding revenues from NGS,
which was acquired in November 2008, Group revenue is up by 11% on a like for
like basis.
Group Escrow continues to perform well with 9% revenue growth to date in this
financial year. Group Escrow renewals are now forecast to be GBP14.3m for the
year against renewals in the year ended 31 May 2009 of GBP13.6m.
Escrow UK, the cornerstone of the NCC Group, has seen 7% revenue growth (October
2008: 2%), with new contract revenues growing by 18%.
Verification Testing revenue has experienced a similar pattern to last year with
the lack of new system upgrades holding back sales opportunities. However, the
order book still remains buoyant at GBP2.1m (May 2009: GBP2.0m.)
Group Escrow termination rates remain around 12% for contracts and
beneficiaries, with most terminations coming from Local Authorities where cost
reduction, regardless of consequence, appears to be the approach.
During the last 12 months NCC Group stated that the 2009/10 price list would be
pegged to the two main price indices as the Group Escrow was not intending to
substantially change the product offering. At present, the RPI, retail price
index, and the CPI, consumers' price index, are currently -1.4% and +1.1%
respectively.
In the light of these low indices, any price increases would be outweighed by
the negative sentiment. The Group is also not seeing any reduction in financial
pressures in either the public or private sectors, or any increase in the
ability of businesses to spend on anything other than security or risk
mitigation related IT projects. Therefore the Board has deferred the UK annual
price increase for six months.
The Assurance Testing division continues to demonstrate very strong revenue
growth in all areas and has maintained its strong order books. Revenues grew by
40% (October 2008: 34%) and by 13% on an organic basis.
NGS and Secure Test, the Group's Ethical Security Testing brands, have grown
their combined order book to GBP7.2m (May 2009: GBP6.5m) as market demand
continues to increase for high quality Ethical Security Testing. The UK test
team continues to grow, but accredited, high quality, resources remain scarce.
The Group's load and performance testing unit, Site Confidence, continues to
achieve monitoring renewal rates of close to 90%, which indicates a renewals
value of GBP3.7m annually against renewals in the year ended 31 May 2009 of
GBP3.9m. The renewal rate continues to be affected by corporate failures and
clients' budgetary pressures across all sectors but the Group is very satisfied
with our ability to attract and retain customers.
Information Security and Advisory service offerings continue to see strong
demand as security issues still consume the majority of available IT
expenditure. Its order book is currently up at GBP3.1m (May 2009: GBP2.9m).
The Group expects to report its interim figures for the six months to 30
November 2009 on Thursday 21 January 2010.
Overall NCC Group remains well on track to deliver another strong year, in line
with market expectations, which positions the Group well for continued long
term, sustained growth.
Enquiries:
+--------------------------------------+--------------------------------+
| NCC Group (www.nccgroup.com) | 0161 209 5432 |
+--------------------------------------+--------------------------------+
| Rob Cotton, Chief Executive | |
+--------------------------------------+--------------------------------+
| Paul Edwards, Group Finance Director | |
+--------------------------------------+--------------------------------+
| | |
+--------------------------------------+--------------------------------+
| College Hill | |
+--------------------------------------+--------------------------------+
| Adrian Duffield | 020 7457 2020 |
+--------------------------------------+--------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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