8th Nov 2006 07:01
NCC Group PLC08 November 2006 8 November 2006 NCC Group - Trading Update NCC Group plc, (AIM: NCC) the international, independent provider of EscrowSolutions, Testing Solutions and Consultancy, is today publishing a tradingupdate covering the period to 8 November 2006. The Group's overall tradingperformance continues to be in line with the statement published at the AGM on21 September 2006. All three UK divisions, Escrow Solutions, Testing Solutions and Consultancy,have seen good growth in prospects, orders and sales during the first fivemonths of the current financial year. The Board expects the H1:H2 profits splitwill be similar to last year. The performance of the Group's core division, Escrow Solutions, continues to bestrong. Group renewals for the full year are now forecast to be £9.1m (May2006: £7.6m) for the year as termination rates continue to be tightlycontrolled. The annual price increase has been implemented, with prices for themain product lines increased by around 6% with no impact on termination rates.The Group now expects termination rates to remain on or below 11% for contractsand beneficiaries for the foreseeable future. UK Escrow Solutions has continued to grow strongly. It now has 7,144 contracts(2005: 6,414) and 13,935 licensees to contracts (2005: 11,597) of which 932(2005: 957) are minimum annual fee arrangements (see appendix for more details).Escrow Solutions in the US continues to perform in line with expectations,whilst in Germany although the potential remains, the market is still provingdifficult. The Testing Solutions division currently has an order book of £2.1m (2005:£1.7m.) Sales growth is coming from an increased demand for high qualityindependent security testing and in the take up rate from Escrow customers forthe source code verification services. The Consultancy division grew its order book to £1.7m (2005: £1.4m) despite thecompetitive market conditions. The Group's cash position has continued to strengthen with currently a cashposition of £0.8m. The Group expects to report its interim figures for the six months to 30November 2006 in late January 2007 and to provide details about the developmentof a southern based operation. Overall the Board remains confident that the Group is in line to deliver anothergood year. Enquiries: NCC Group (www.nccgroup.com) 0161 209 5432 Rob Cotton, Chief Executive Paul Edwards, Group Finance Director College Hill Adrian Duffield/Corinna Dorward 020 7457 2020 Appendix UK Escrow Contracts and Beneficiaries Date No of Contracts No of Beneficiaries No of min annual fee charges Incl min annual Excl min annual fee charges fee charges May 2004 5,420 10,483 9,448 1,035July 2004 5,586 10,769 9,770 999Oct 2004 5,760 11,193 10,225 968Jan 2005 5,901 11,384 10,399 985May 2005 6,154 11,911 10,961 950Jul 2005 6,236 12,060 11,115 945Oct 2005 6,414 12,554 11,597 957Jan 2006 6,630 12,943 11,954 989May 2006 6,868 13,381 12,406 975Jul 2006 6,970 13,615 12,637 978Oct 2006 7,144 13,935 13,003 932 A software escrow agreement is a contract made between three parties: thesoftware vendor (the licensor), the software customer (the licensee) and anindependent third party (the escrow agent, such as NCC Group). Under the termsof the agreement, the licensor agrees to send a copy of the source code to theescrow agent and the escrow agent agrees to hold the source code securely, andto release it to the licensee only in the event of certain predefined triggerevents. These include the insolvency of the licensor or its failure to providesupport services as defined in the software license agreement. Contract - represents an escrow agreement to provide escrow services for anowner of the software on behalf of licensees who have signed to the agreement. Beneficiary - represents licensees who have signed to the contract and whoreceive the benefits of escrow as set out in the contract. Minimum Annual Fee - a charge is levied on the owner of the software under amultiple agreement where there are fewer than two beneficiaries to the contract. Once two or more beneficiaries are signed to the agreement the minimum fee isno longer charged. The fee is charged at the end of the year and released tothe P&L account over the following twelve months. This will decline as itintended that beneficiaries are signed to agreements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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