2nd Feb 2023 09:52
(Alliance News) - NCC Group PLC shares slumped on Thursday as the cybersecurity firm said trading is being hurt by a lengthening of sales cycles, and it warned of job cuts.
The company reported that revenue in the six months to November 30 increased 18% to GBP176.6 million from GBP150.1 million a year ago. Pretax profit jumped 22% to GBP10.3 million from GBP8.4 million.
It also declared an interim dividend of 1.50 pence, unchanged year-on-year.
However, NCC said that since the beginning of the second half of its financial year, it has experienced a lengthening of the sales cycle. This is leading to delays in buying decisions, work commencement and therefore revenue recognition. This has been a particular problem in North America and the UK.
Based on this, the company now expects only a single-digit revenue increase on a constant currency basis for all of financial 2023. In financial 2022, NCC reported GBP314.8 million of revenue.
NCC added: "As a result of the current market conditions, we are experiencing a reduction in our utilisation rates and attrition. We are therefore accelerating the implementation of our strategy and reshaping the business, with a proposed reduction in headcount in the near term."
It plans to cut around 7% of its global workforce, mostly in the UK and North America, at a one-off cost of GBP4 million. NCC employs more than 2,000 across the globe.
It now expects adjusted operating profit of around GBP47 million, which would be down 2.3% from GBP48.1 million. Without the impact of "strategic investments" adjusted operating profit will be around GBP52 million.
"The board remains confident in the medium-term prospects for the cyber market and these strategic actions will position the business to capitalise when the market improves," NCC said.
NCC shares were 9.5% lower at 166.80 pence each in London on Thursday morning.
By Eric Cunha, Alliance News news editor
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