26th Oct 2005 07:00
NCC Group PLC26 October 2005 NCC GROUP - TRADING UPDATE NCC Group plc, the Manchester-based leading independent provider of ITassurance, security and consultancy services, is publishing today a tradingupdate covering the period to 26 October 2005. The Group's overall trading performance continues to be in line with thestatement published at the AGM on 21 September 2005. The statement indicatedthat for the current year ending 31 May 2006, a greater contribution to profitswas expected in the second half of the year than in the equivalent period in2005. Accordingly, a higher percentage of profits is expected to come fromEscrow and Testing Solutions rather than from Consultancy. The Board nowexpects the H1:H2 split will be nearer to 40%:60% as compared to 44%:56% in theprevious year. The performance of the Group's core division, Escrow Solutions, continues to beexcellent. Renewals are now forecast to be £6.8m for the year as terminationrates continue to be well controlled. The annual price increase has beenimplemented, with prices for the main product lines increased by around 8% anddual depositing instituted to further improve the value of the proposition. Theaverage number of agreements per customer has increased to over 1.8 and thereare more than 11,400 beneficiaries to over 6,200 agreements. The early signs from Germany are encouraging and the market there appears,despite the low level of awareness of Escrow, to show good potential. GartnerConsulting has assessed that the addressable market in Germany alone is £88m -£102m which is greater than that of the UK which was assessed to be £65m - £85m.Investment in the infrastructure of the business is in progress and the Groupwill be actively selling and account managing, in the same way as it does in theUK, by New Year. Testing Solutions has performed very well in the first part of the year. Eachof its business areas are functioning well and its order books, at £1.7m, areahead of the Board's expectations, with the further recruitment of high calibrestaff being the next priority to address. Growth has come from an increaseddemand for high quality independent testing to provide assurance over securityand performance issues, as well as from an increase in the take up rate fromEscrow customers for the source code verification services. The consultancy marketplace continues to be difficult with the Group's ITConsultancy business finding the market slow as both decisions and projectinitiations slip. The order book stands at £1.4m. The market for the provisionof Information Security Consultancy has proved particularly difficult, with asignificant lack of awareness in the market of the merits and values of both itsservice offerings and its independence. To that end, the provision ofInformation Security Consultancy services has been reduced and the smallbusiness unit will be recombined within the IT Consultancy. The Group's cash position has continued to grow and NCC Group currently has anet cash position of £0.3m. The Group expects to report its interim figures for the six months to 30November 2005 in mid-January 2006 and will provide IFRS information shortlybefore that date. 26 October 2005 Enquiries: NCC Group (www.nccgroup.com) 0161 209 5432 Rob Cotton, Chief Executive Paul Edwards, Group Finance Director College Hill Adrian Duffield/Clare Warren 020 7457 2815/2055 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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