Unaudited interim results for 6-months to 31/3/25

19 June 2025

NCC Group plc

Unaudited interim results for the period ended 31 March 2025

Significant increase in pre-tax profit from successful non-core disposal; elimination of net debt;

Escode ownership discussions ongoing; Cyber Security division pivots towards strategic client relationships

NCC Group plc (LSE: NCC, "NCC Group" or "the Group"), a people-powered, tech-enabled global cyber security and software escrow business, reports its interim results for the six-months to 31 March 2025 ("the half year", "HY", "H1 2025", "the period").

Highlights

· The Group reported Adjusted EBITDA 1,2 of £21.5m down from £25.5m in H1 2024 (the six-months to 31 March 2024). FY25 Adjusted EBITDA remains in line with our previous guidance as we maintain gross margins and realise operational efficiencies.

· Profit before taxation grew to £16.6m from £8.4m in H1 2024, as a result of the one-off profit (£11.3m in H1 2025) from the sale of our Fox Crypto business for a total consideration of £65.6m completed in March 2025.

· This disposal has helped to eliminate Group borrowings, with net cash of £0.3m at 31 March 2025 compared to net debt of £53.5m at 31 March 2024. In conjunction with our successful refinancing in April 2025, this supports strategic options for capital allocation and value enhancing M&A opportunities.

· Escode revenue grew 1.8% on a constant currency basis 1 and delivered an Adjusted EBITDA 1,2 of £14.8m. The business has now delivered ten consecutive quarters of year-on-year revenue growth.

· As announced on 28 April 2025, the Group is investigating options for its Escode business including a potential sale and is now holding discussions with interested parties. If a transaction were to conclude it would enable the Group to consider a significant return of capital to shareholders and further investment in the Cyber Security business. The Board will provide an update as and when appropriate. 

· Cyber Security revenue declined 6.6% on a constant currency basis 1 and delivered an Adjusted EBITDA 1,2 of £11.0m. We experienced a decline in our high-volume, lower value testing and compliance engagements as clients reacted to macroeconomic uncertainties in the autumn and spring.  Per our strategy, we are achieving a positive shift in revenue mix to strategic higher value engagements in the form of Managed Services, Identity & Access Management, Operational Technology security and advanced testing. These areas have longer sales and onboarding cycles that are supported by our scalable global delivery capabilities and strategic technology partnerships.

· The Board has declared an unchanged interim dividend of 1.50p per ordinary share for the six-months ended 31 March 2025, marking 20 consecutive years of dividend payments for shareholders.

· The Board expects Revenue (excluding non-core disposals) for the year ended 30 September 2025 to decline marginally, with Escode experiencing single digit revenue growth offset by a decline of c.5% in Cyber Security (excluding non-core disposals) as that business pivots towards strategic client relationships. Current Cyber Security pipeline is building and we expect to return to revenue growth in FY26.

Financial highlights:

Footnotes: 1: Revenue at constant currency, Adjusted EBITDA, Adjusted Operating profit, Adjusted basic EPS, Net cash/(debt) excluding lease liabilities and cash conversion are Alternative Performance Measures (APMs) and not IFRS measures. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

2: The Group reports only one adjusted item: Individual Significant Items (includes the £11.3m profit on disposal of Fox Crypto and £1.9m of re-organisation & strategic review of Escode costs). For further details, please refer to unaudited appendix 1 and the Financial Review, which includes an explanation of APMs and adjusting items, along with a reconciliation to statutory information.

Mike Maddison, Chief Executive Officer, commented:

"I want to thank colleagues for their focus and efforts in transforming NCC Group into two distinct businesses. Further significant progress has been made on our strategy: we've completed the complex sale of our non-core Fox Crypto business and finalised the evolution of our Cyber Security business into four globally consistent service lines.

Demand for cyber security services has never been clearer, reflected in strong pipeline growth particularly in solutions related to our investment areas. Our success is driven by a deep penetration testing expertise, a developing global delivery model including our expanding team in the Philippines and strong technology partnerships. We are making progress reflecting the changing market and pivoting to strategic client relationships and projects underpinned by recurring revenue, multidisciplinary capabilities and global delivery.

Escode has now delivered ten consecutive quarters of year-on-year revenue growth. As announced on 28 April 2025, we are exploring strategic options for Escode, including a potential sale. If concluded, this would enable NCC to become a pure-play Cyber Security provider and return significant capital to shareholders and make further investment in our Cyber Security business.

With a new £120m borrowing facility and the Fox Crypto disposal complete, we are well-positioned to pursue value-enhancing acquisitions in Cyber Security."

Contact informationInvestor enquiries:

Media enquiries:

Presentation of results - audio webcast and conference call details:

A live webcast of the presentation from Mike Maddison, CEO and Guy Ellis, CFO and a Q&A will be held at 8:30am BST on Thursday 19 June 2025 for investors and analysts. Please register for the webcast at https://brrmedia.news/NCC_HY_2025.

A recording of the webcast will be made available on NCC's Plc website (https://www.nccgroupplc.com/) as soon as possible following the presentation.

About NCC Group plcNCC Group is a people-powered, tech-enabled global cyber security and software escrow business.

Driven by a collective purpose to create a more secure digital future, c, 2,200 colleagues across Europe, North America, and Asia Pacific harness their collective insight, intelligence, and innovation to deliver cyber resilience solutions for both public and private sector clients globally.

With decades of experience and a rich heritage, NCC Group is committed to developing sustainable solutions that continue to meet client's current and future cyber security challenges.

Cautionary note regarding forward-looking statement

This announcement includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, assumptions, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by the Listing Rules, Disclosure and Transparency Rules and applicable law, the Group undertakes no obligation to update, revise or change any forward-looking statements to reflect events or developments occurring on or after the date such statements are published.

Chief Executive Officer's business review

Introduction

During H1 2025, our work to create two distinct and focused businesses continued. We completed the sale of Fox-IT Crypto for £65.6 million, which enabled us to eliminate the Group's net borrowings, a position that gives us far more flexibility to invest and plan for the future in a continually evolving market. We are investigating the potential sale of Escode, our market-leading escrow business and recently began discussions with a number of interested parties. Were these discussions to result in a successful transaction, this would pave the way for a significant return of capital to shareholders and further investment in the Cyber Security business.

Escode revenue continues to perform well and the business has now delivered ten consecutive quarters of year-on-year revenue growth.

The Group delivered Adjusted EBITDA 1,2  of £21.5m, down 15.7%. With our focus on long-term growth plans, we are pleased with our progress in repositioning our Cyber Security business to maximise future revenue opportunities, while maintaining gross margins and tight control of our cost base. In the past six months we have seen profit before taxation almost double (up 97.6%) to £16.6m compared to the first half of 2024, as a result of a one-off benefit from the sale of Fox Crypto (gain on disposal of £11.3m in H1 2025). Following completion of the Fox Crypto transaction, the Group had net cash of £0.3m as at 31 March 2025.

Our strategy continues to be the right one

The need for organisations to develop a strong Cyber Security environment has never been clearer, demonstrated by the strong pipeline growth in our strategic higher value capabilities. The unique combination of deep penetration testing capability, our expanding global delivery model (which now includes a growing skills base in the Philippines), differentiated technical skills and technology alliances, underpin our ability to succeed. Our journey continues, improving our global Cyber Security offering and our sales and marketing strategy. We have come a long way since I outlined our transformation strategy in 2023 to address our delivery model, our over reliance on short term testing engagements and US tech customer concentration risk. This has moved us towards unlocking our potential with a higher proportion of annual recurring revenue supported by a single technology stack and the opportunity to leverage our scalable flywheel of Cyber services.

This is supported by a network of partners and strategic alliances to optimise our solutions for clients, which is evident in the awards and recognition we receive, including Splunk's 2024 global Partner award and UK and Ireland Security partner award 2025, and Horizon3.ai Global Partner of the Year. In FY22 we had no strategic global partnerships - now we have Microsoft, Dragos, Cycognito, Splunk and we are also a paid research partner for Google.

Market trends, threat landscape and continued regulation - the market continues to evolve

The environment in which NCC Group operates is shaped by a complex interplay of macroeconomic, geopolitical, and technological forces. As we celebrate our 25 year anniversary, we remain confident our transformation strategy will deliver growth underpinned by the range of services, geographic coverage, breadth and depth of offering. Cautious client behaviour and the lengthening sales and onboarding cycles reported in December 2024 has impacted our first half results.  This is also against a backdrop of macro-economic uncertainty, IT & security budgets being under scrutiny and competitive pricing.

Importantly, over the past six months we have continued to see cyber-resilience elevated as a core business-risk agenda item to the C-Suite as opposed to a purely IT consideration. This pivot is most evident in highly regulated verticals - financial services, healthcare, government, and critical infrastructure, where regulatory scrutiny and heightened director liability is driving materially larger, multi-year security programmes. Within Operational Technology (OT) in particular, full risk reviews and resilience roadmaps are being commissioned as the potential business interruption cost of an OT outage becomes clearer. Our global delivery model ensures that these international operators can obtain expert support around the clock, irrespective of time zone or geography. Strategically, our global delivery engine is a differentiated and scalable service that enables us to be competitive.

Ransomware remains widespread and we have seen a marked uplift in AI-enabled phishing and double-extortion campaigns, with industrial and public sector clients disproportionately affected and the recent retail sector in the UK. This evolving threat landscape is leading organisations to favour Managed (Extended) Detection & Response (MDR/MXDR) solutions that provide continuous monitoring across endpoint, cloud, identity, and OT telemetry. In addition, businesses are requesting OT-specific MDR to counter the increase in attacks against industrial-control environments.

Regulatory momentum has intensified across all our core territories and key customer verticals. The EU Cyber Resilience Act and the UK's forthcoming AI Cyber-Security Code of Practice will embed secure-by-design requirements up the software supply chain, while NIS2, DORA and sector-specific mandates in energy and transport expand the range of organisations that must evidence robust cyber controls and incident-reporting disciplines. These developments are complemented by comparable moves in the US, Australia and APAC, signalling a global consensus for higher standards. Demand for strategic advisory and independent validation against these emerging frameworks is fuelling growth in our consulting and assurance work across OT environments and heavily regulated industries. NCC Group's recognised contribution to the UK Government's AI and CRA initiatives underpins our reputation as a leading provider of regulatory advisory and assurance services.

The worldwide shortfall in qualified cyber security professionals continues to become more acute. This structural gap is most evident in highly specialised skills, including advanced testing, OT, and Identity & Access Management disciplines. This is expected to drive outsourcing to third-party cyber security services. Clients are relying on our global delivery hubs to ensure around-the-clock expert coverage without inflating their cost base as a cost of employment. Additionally, the strong reputation that we have among cyber professionals positions us to attract talent more easily than our competitors, with our academy/training ability allowing us to further expand and strengthen this talent base. 

Hybrid working and personal device policies have shifted the security perimeter from the edge of the Enterprise network to the user and their devices. Identity & Access Management and Zero-Trust architectures are consequently commanding a growing share of security budgets. This is further driven by requirements to demonstrate granular access controls under NIS2 and other critical-infrastructure regulations. Our dedicated Digital Identity service is supporting clients through this transition, covering strategy, implementation, and day-to-day identity operations. 

Lastly, the attack surface is expanding, with cloud migrations accelerating, SaaS proliferation and AI adoption continuing, as well as early discussions ongoing regarding the implications of quantum computing. Each new platform expands the potential for malicious attacks and reinforces the need for security to be embedded earlier into development pipelines. Demand is therefore rising for secure-by-design assessments, supply chain software assurance and MXDR coverage that spans traditional IT, cloud, and OT environments. The breadth of clients we serve across industries, geographies, and IT and OT environments has allowed us to build unique IP to help clients secure this expanding attack surface.

Business Performance

Group Revenue declined in H1 2025 compared to H1 2024 by -4.9% on a constant currency basis 1 (Actual rates: -6.0%) with Cyber Security Revenue declining by -6.6% on a constant currency basis 1 (Actual rates: -7.8%) and Escode growing by 1.8% on a constant currency basis 1  (Actual rates: +1.2%). We experienced a decline in our high volume, lower value testing and compliance engagements as clients reacted to macroeconomic uncertainties in the autumn and spring.  Per our strategy, we are achieving a positive shift in revenue mix to strategic higher value engagements in the form of Managed Services, Identity & Access Management, Operational Technology security and advanced testing. These areas have longer sales & onboarding cycles that are supported by our scalable global delivery capabilities and strategic technology partnerships.

Within the Cyber Security business we are increasing the strategic high-value contracts with 57% of contracts sold in H1 2025 over £500k, compared to 31% in FY22. We are also increasing our focus and investment in the fastest growing areas of the cyber security market - Identity and Access Management, Operational Technology, Managed Services and Red Team services.

This increased strategic focus is designed to offset the decline in our lower value transactional testing business, which while still valuable, is defined by single capability opportunities and less predictable workflows in terms of forecasting and scheduling our valuable resources. There is, however, a consequential lag impact in terms of the increased time to close these strategic high-value contracts and recognising revenue.

Escode demonstrated another strong performance with revenue growing 1.8% on a constant currency basis 1 and Adjusted EBITDA of £14.8m meaning the division has now delivered ten consecutive quarters of period-on-period revenue growth and a progressive profit performance.

The Group has been effective in controlling its gross margin and operating costs. Administrative expenses (excluding share based payments, depreciation and amortisation and Individually Significant Items) have remained broadly flat, increasing by just 0.2% to £44.8m (H1 2024: £44.7m). We continue to be focused on identifying further operational efficiencies and ensuring that our operating model is market aligned and delivery focused to support the underlying Cyber Security business strategy.

Total dividends of £4.6m were recognised in the period (H1 2024: £4.7m), which represented the final dividend for the 16-month period ended 30 September 2024 of 1.50p. The Board has declared an unchanged interim dividend of 1.50p per ordinary share for the period ended 31 March 2025 as the Board prioritises investment in the strategy and marking 20 consecutive years of dividend payments for shareholders.

Fox Crypto non-core disposal

On 28 March 2025, the Group completed the disposal of Fox Crypto to CR Group Nordic AB for a gross consideration of £65.6m (recognising a gain on disposal of £11.3m in HY25). The disposal represents a continuation of the Group's transformation strategy to simplify the business and increase the focus of our Cyber Security business.

Bank Refinancing

On the 28 April 2025, we were pleased to announce a new four-year £120m multi-currency revolving credit facility ("RCF"), with a £50m uncommitted accordion option, provided by a syndicate of National Westminster Bank plc, HSBC UK Bank plc, Barclays Bank plc and Santander UK plc. The new RCF facility will expire on 28 April 2029 and replaces the Group's previous £162.5m RCF, which had an expiry date of 22 December 2026.

As of 31 March 2025, the Group had net cash of £0.3m following the disposal of Fox Crypto for £65.6m. The new facility is unsecured, with a margin payable above SONIA/SOFR on a ratchet mechanism in the range of 1.35% to 2.35% depending on the level of the Group's leverage. This strong balance sheet, combined with this new finance facility provides the Group with considerable flexibility to pursue its strategy and selective M&A in 2025 and beyond. 

Escode potential disposal

As announced on 28 April 2025, the Group is investigating options for its Escode business including a potential sale and is now holding discussions with interested parties. No decision has been made on whether to proceed with any transaction, but if a transaction were to conclude it would enable a significant return of capital to shareholders and further investment in the Cyber Security business. The Board will provide an update as and when appropriate. 

Outlook

FY25 Adjusted EBITDA remains in line with our previous guidance as we maintain gross margins and realise operational efficiencies.

The Board anticipates that Revenue (excluding non-core disposals) for the year ended 30 September 2025 is expected to decline marginally, with Escode experiencing single digit revenue growth offset by a decline of c.5% in Cyber Security (excluding non-core disposals) as that division pivots towards strategic client relationships. Current Cyber Security pipeline is building and we expect to return to revenue growth in FY26.

If a potential Escode transaction were to conclude it would enable a significant return of capital to shareholders and further investment in the business.

Footnotes:

1: Revenue at constant currency, Adjusted EBITDA, Adjusted Operating profit, Adjusted basic EPS, Net cash/(debt) excluding lease liabilities and cash conversion are Alternative Performance Measures (APMs) and not IFRS measures. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

2: The Group reports only one adjusted item: Individual Significant Items (includes the £11.3m profit on disposal of Fox Crypto and £1.9m of re-organisation & strategic review of Escode costs). For further details, please refer to unaudited appendix 1 and the Financial Review, which includes an explanation of APMs and adjusting items, along with a reconciliation to statutory information.

Financial review

Highlights - HY25 financial framework

As we measure ourselves against our FY25 financial framework outlined in December 2024, the key points to note are as follows:

Sustainable revenue growth

· Delivering underlying growth in Cyber Security - H1 2025 revenue declined compared to H1 2024 on both constant currency 1 ( -6.6%) and at actual rates (-7.8%)

· Increase Managed Services revenue as a proportion of total Cyber Security - H1 2025 revenue increased by +3.0% at constant currency (Actual rates: +2.2%) and increased by +2.9% to 30.5% as a proportion of total Cyber Security revenue

· Maintaining momentum in Escode - achieved ten consecutive quarters of revenue growth and increased period on period by +1.8% on a constant currency basis (+1.2% actual rates)

Improved gross margin

· Maintain utilisation - The Group's average utilisation rate across both TAS and C&I (all locations) has remained flat at 66% and Manila team now in line with Group averages

· Smart pricing and margin investment decision making - Kantata resource reporting tool now implemented globally and regular reporting of profitability by engagement and client has been implemented

· Globalised technical resource footprint - from a global delivery perspective the Group continues to invest in its Manila office and delivery resourcing is planned and tracked on a single system

Efficiency for growth

· Simplify operating model to generate efficiencies - Finance and IT processes globalised and centralised around hubs in Manchester and Manila

· Drive towards consistent profit conversion in every market - small improvement in North American GP% in spite of revenue decline, in part as a result of increased delivery from Manila and cost control

· Eliminate stranded costs resulting from non-core disposals - The Fox-IT Crypto disposal completed on 31 March 2025 and by mid-autumn 2025, the simplified Fox-IT Cyber Security business operations will be fully separated from the Fox-IT Crypto business in its own offices in Delft.

Capital deployment supporting growth

· Strong cash conversion - H1 2025 amounted to 62.3%, a drop from 90.7% in 2024 driven by increased receivables and bonus payments made to colleagues in December 2025 for 4 month stub period to 30 September 2024

· Ensure appropriate liquidity and debt facilities - net cash effectively managed at H1 2025 to £0.3m, with non-core disposal of Fox-IT Crypto generating £65.6m gross consideration in H1 2025. Agreed a new four-year £120m multi-currency revolving credit facility in April 2025.

· Maintaining dividend - interim dividend maintained at 1.50p, as the Board prioritises investment in the strategy

· Accretive acquisition opportunities - continue to scan the market for accretive opportunities with a clear strategic and operational fit  

Overview of financial performance

The following table summarises the Group's overall performance:

Footnotes: 1: Revenue at constant currency, Adjusted EBITDA, Adjusted Operating profit, Adjusted basic EPS, Net cash/(debt) excluding lease liabilities and cash conversion are Alternative Performance Measures (APMs) and not IFRS measures. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

2: The Group reports only one adjusted item: Individual Significant Items (includes the £11.3m profit on disposal of Fox Crypto and £1.9m of re-organisation & strategic review of Escode costs). For further details, please refer to unaudited appendix 1 and the Financial Review, which includes an explanation of APMs and adjusting items, along with a reconciliation to statutory information.

H1 2025 revenue declined by 4.9% on a constant currency basis (Actual rates: -6.0%) with Cyber Security Revenue declining 6.6% on a constant currency basis (Actual rates: -7.8%) and Escode growing by 1.8% on a constant currency basis (Actual rates: +1.2%). Our revenue performance in Cyber Security, was predominantly driven by our Technical Assurance Services business, which declined by 12.7% on a constant currency basis (Actual rates: -13.8%) in H1 2025. Technical Assurance Services has also declined half-on-half, reflecting a recovery in demand that continues to be less consistent than expected. In parallel, the Group has been increasing its focus and investment in the fastest growing areas of the cyber market - Identity and Access Management, Operational Technology, Managed Services and Red Team services.  While revenue has declined, this has been partially offset by Managed Services continuing to grow in H1 2025, increasing by 3.0% on a constant currency basis 1 (Actual rates: +2.2%).

During the period, the Group's Fox Crypto and Fox DetACT businesses contributed combined revenue of £11.5m (H1 2024: £10.0m) and adjusted operating profit 1 of £2.9m (H1 2024: £3.4m). The results in the current period reflect trading from Fox Crypto only, as the disposal of Fox DetACT completed on 30 April 2024 and therefore only contributed to H1 2024 with nil contribution in H1 2025 as Fox DetACT was not part of the Group during the period. The disposal of Fox Crypto completed on 28 March 2025, and as a result, there will be no further trading impact on the Group's operations beyond 31 March 2025.

In H1 2025 Escode revenues period-on-period increased by 1.8% on a constant currency basis 1 (actual rates: +1.2%) driven by favourable price increases and volume during the period within verification services. Verification services revenue increased by 3.7% on a constant currency basis (actual rates: 3.7%).

Central and head office administrative expenses (excluding share-based payments, depreciation, and amortisation of acquired intangibles) increased by 54.5% to £3.4m in H1 2025, compared to £2.2m in H1 2024, primarily due to a higher allocation of central staff costs. This was driven by a proportionally larger number of head office employees relative to the rest of the business, following the Group's ongoing reorganisation and associated operational headcount reduction within the Cyber Security division.

Gross profit decreased by 5.0% to £67.8m (H1 2024: £71.4m) with gross margin percentage increasing to 43.2% (H1 2024: 42.8%). The 0.4% pts gross margin (%) increase is mainly due to an improvement in Escode gross margin percentage of 1.9% points.

Administrative expenses (excluding share based payments, depreciation and amortisation, and amortisation of acquired intangibles) have slightly increased by 0.2% to £44.8m (H1 2024 £44.7m). This was predominantly due to higher spend on IT software and professional fees, offset by lower payroll costs, reduced FX volatility and savings in rent and rates. The overall movement highlights investment in systems and advisory support, balanced by operational efficiencies.

A statutory profit of £16.0m for the period was recognised after incurring an overall £9.4m credit of Individual Significant Items, giving rise to a basic and diluted EPS of 5.2p and 5.1p respectively (H1 2024: basic 2.0p and diluted 2.0p). Adjusted basic EPS 1 amounted to 2.1p (H1 2024: 2.7p).

H1 2025 cash conversion 1 was 62.3% (H1 2024: 111.8%). Net cash excluding lease liabilities 1 amounts to £0.3m, following the completion of the disposal of Fox Crypto, a non-core asset (H1 2024: net debt excluding lease liabilities 1 of £53.5m). Cash conversion has fallen to 62.3%, predominantly driven by the decline in performance half-on-half and one-off adverse movements within the Group's working capital.

The Group's Balance Sheet remains strong following the successful refinancing completed in April 2025. At that time, the Group entered into a new four-year, £120m multi-currency revolving credit facility (RCF) with a syndicate of 4 banks and includes an uncommitted £50m accordion option. This new unsecured facility replaces the previous £162.5m RCF, which was in place as at 31 March 2025 and was due to expire in December 2026.

The Board has declared a maintained interim dividend of 1.50p per share for the 6-month period ended 31 March 2025, as it remains mindful of the continued need to invest in the Group's strategy and repositioning of the Cyber Security Business.

Alternative Performance Measures (APMs)

Throughout this Financial Review, certain APMs are presented. The APMs used by the Group are not defined terms under IFRS and therefore may not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, IFRS measures. This presentation is also consistent with the way that financial performance is measured by management and reported to the Board, and the basis of financial measures for senior management's compensation scheme and provides supplementary information that assists the user in understanding the financial performance, position and trends of the Group.

We believe these APMs provide readers with important additional information on our business and this information is relevant for use by investors, securities analysts and other interested parties as supplemental measures of future potential performance. However, since statutory measures can differ significantly from the APMs and may be assessed differently by the reader, we encourage you to consider these figures together with statutory reporting measures noted. Specifically, we would note that APMs may not be comparable across different companies and that certain profit related APMs may exclude recurring business transactions (e.g. acquisition related costs) that impact financial performance and cash flows.

As previously reported, the Group only discloses one adjusted item: 'Individually Significant Items' (which includes the £11.3m profit on disposal of Fox Crypto and £1.9m of fundamental re-organisation & strategic review of Escode costs).

The Group has the following APMs/non-statutory measures:

· Adjusted EBITDA (reconciled below)

· Adjusted operating profit (reconciled below)

· Adjusted profit for the period (reconciled below)

· Adjusted basic EPS (pence) (reconciled below)

· Net cash/(debt) excluding lease liabilities (reconciled below)

· Net cash/(debt) (reconciled below)

· Cash conversion which includes Adjusted EBITDA (reconciled below)

· Constant currency revenue (reconciled below)

The above APM's are consistent with those reported for the 16 months period ended 30 September 2024.

The Group reports certain geographic regions and service capabilities on a constant currency basis to reflect the underlying performance considering constant foreign exchange rates period on period. This involves translating comparative numbers to current period rates for comparability to enable a growth factor to be calculated. As these measures are not statutory revenue numbers, management considers these to be APMs; see unaudited appendix 1 for further details.

Adjusted EBITDA and Adjusted operating profit 1 Adjusted EBITDA1 and adjusted operating profit 1,2 is reconciled to statutory measures below:

1: Revenue at constant currency, Adjusted EBITDA, Adjusted Operating profit, Adjusted basic EPS, Net cash/(debt) excluding lease liabilities and cash conversion are Alternative Performance Measures (APMs) and not IFRS measures. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

2: The Group reports only one adjusted item: Individual Significant Items (includes the £11.3m profit on disposal of Fox Crypto and £1.9m of re-organisation & strategic review of Escode costs). For further details, please refer to unaudited appendix 1 and the Financial Review, which includes an explanation of APMs and adjusting items, along with a reconciliation to statutory information.

Revenue summary:

1: Revenue at constant currency is an Alternative Performance Measure (APMs) and not an IFRS measure. See unaudited appendix 1 for an explanation of APMs and adjusting items, Including a reconciliation to statutory information. 

Divisional performance

Cyber Security

The Cyber Security division accounts for 78.8% of Group revenue (H1 2024: 80.3%) and 65.6% of Group gross profit (H1 2024: 68.6%).

Cyber Security revenue analysis - by originating country:

1: Revenue at constant currency is an Alternative Performance Measure (APMs) and not an IFRS measure. See unaudited appendix 1 for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

Cyber Security revenue decreased by -6.6% on a constant currency basis 1 and -7.8% at actual rates. UK & APAC decreased by -5.2% on a constant currency basis 1 (-5.4% at actual rates) and North America declined by -13.1% on a constant currency basis 1 (-14.4% at actual rates). These reductions have been predominantly driven by declines in their respective TAS markets, due to demand recovering more slowly than expected period-on-period.

From a Cyber Security geographical revenue trajectory perspective, the following tables compare H1 2025 against H2 2024 performance:

1: Revenue at constant currency is an Alternative Performance Measure (APMs) and not an IFRS measure. See unaudited appendix 1 for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

While UK & APAC has declined at a lower rate (1.5% at both actual and constant currency rates), North America has further declined by 16.4% at constant currency (14.9% reduction at actual rates). Again, this has been predominantly driven by a reduction in our North American TAS business. However, European revenue has increased by 2.1% at constant currency (+0.7% at actual rates) from H2 2024 to H1 2025 due to an increase in European Managed Services growth.

Cyber Security revenue analysed by type of service and capability:

Cyber Security revenue for H1 2025 decreased by 6.6% on a constant currency basis compared to H1 2024, representing a 7.8% decline at actual rates. The decline was primarily driven by a 12.7% reduction in the Group's TAS business and to a lesser extent by a 17.1% reduction in the Group's DFIR business on a constant currency basis (13.8% and 18.2% declines at actual rates, respectively). The Group's C&I business also declined by 2.7% on constant currency basis (3.5% at actual rates).

These decreases reflect a slower start to the year in UK and APAC C&I markets, as well as in the North American TAS market. Encouragingly, performance in the UK C&I business has recently shown signs of improvement, returning to levels consistent with prior periods.

MS now represents 30.5% of total Cyber Security revenue as compared to H1 2024 of 27.6%, demonstrating that our Cyber business continues to pivot its revenue mix towards the fastest-growing parts of the cyber market in Managed Services. This is reflected by the increase in MS of 3.0% at constant currency (+2.2% at actual rates) in our European market. Managed Services continued to win marquee new clients, with a drop in renewal retention in very competitive market environment.

The decline in DFIR was largely driven by a general reduction in 'one-off' activities as they are dependent on when incidents occur.

From a Cyber Security revenue trajectory perspective, the following tables compare H1 2025 against H2 2024 performance:

1: Revenue at constant currency is an Alternative Performance Measure (APMs) and not an IFRS measure. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

TAS revenue has fallen by 13.5% on a constant currency basis (13.6% reduction at actual rates) which has been driven by a shift towards larger higher margin contracts and an overall reduction in TAS demand (specifically within North America). The Group's average utilisation rate across both TAS and C&I (all locations) has remained flat at 66%.

MS represents 30.5% of total Cyber Security revenue as compared to H2 2024 of 29.0%, demonstrating the continued change in service mix to more annual recurring revenues.

Cyber Security gross profit is analysed as follows:

Gross margins decreased overall by 0.6%pts, driven by a decline in the Group's TAS and C&I capabilities, particularly within North America and UK & APAC revenue. However, despite these revenue declines, the Group achieved operational cost savings in North America.

When comparing H1 2025 performance to H2 2024, the following table summarises the gross margin trajectory by geography:

Comparing H1 2025 to H2 2024, gross margin has decreased by 1.5% pts. This is predominantly driven by a reduction in gross margin of 4.3% pts in UK & APAC, stemming specifically from decreases in revenue within the UK & APAC TAS market. However, the business has continued to benefit from headcount reduction cost savings in North America.

Escode

The Escode division accounts for 21.2% of Group revenues (H1 2024: 19.7%) and 34.4% of Group gross profit (H1 2024: 31.4%).

Escode revenue analysis - by originating country:

Escode revenue has increased by 1.8% at constant currency (1.2% at actual rates) which has predominantly been driven by an increase in volume of verification services during the period.

Escode revenues analysed by service line:

From an Escode service line revenue trajectory perspective the following tables compare H1 2025 against H2 2024 performance:

Gross margin is analysed as follows:

Escode gross margin increased by +1.9% pts with UK and North America increasing by +0.6% pts and +1.7% pts respectively and Europe increasing by +12.9% due to the benefits arising from previous investments enabling Escode to achieve sustainable revenue growth and gross margin improvements. The improvement in gross margin was driven primarily by favourable price increases and operating efficiencies.

When comparing H1 2025 performance to H2 2024, the following table summarises the gross margin trajectory:

Overall Escode Gross margin has increased by 0.5% in H1 2025. This is predominantly driven by an increase in Escode Europe which increased by 15.0% pts to 70.0% in H1 2025 (H2 2024: 55.0%). This was driven by changes in cost allocations, following a change in sales team structure during the period. This change reflects the increased shift towards a more global operating model. Given Escode Europe's proportionate size within the wider Escode business, relative to Escode UK and North America, this change in cost allocation has had a favourable impact on the region's gross margin.

Individually Significant Items

During the period, the Group has incurred Individually Significant Items (ISIs) of a credit of £9.4m (H1 2024: £2.4m expense) as follows:

Individually Significant Items for the period amounted to a £9.4m credit, primarily reflecting an £11.3m profit on the disposal of Fox Crypto. This excludes £1.5m of transaction costs previously recognised as ISIs in the 16 months ended 30 September 2024. ISIs also include £1.7m (H1 2024: £1.7m) of fundamental reorganisation costs as we continue to reshape the Group to implement the Group's strategy. The Group's intention remains for phase 3 of the reorganisation to complete by December 2025; however this will continue to be monitored as the transformation strategy progresses as we ensure the operating model is market aligned and delivery focused to support the underlying Cyber Security business strategy.

The £11.3m gain recognised in the 6-month period ended 31 March 2025 is calculated as cash consideration of £65.6m, less net assets disposed of £52.3m and less £2.0m of transaction costs incurred during the period. The difference between the £11.3m period gain and the £9.8m overall gain reflects the £1.5m of transaction costs incurred in the 16-month period ended 30 September 2024, not included within the period.

Finance costs

Finance costs for the six months to 31 May 2025 were £3.4m which are consistent with £3.3m for the six months to 31 March 2024. Finance costs include lease financing costs of £0.6m (H1 2024: £0.6m). 

Taxation

The Group's effective statutory tax rate is 3.6% (H1 2024: 26.2%). The Group's adjusted tax rate is 9.1% (H1 2024: 22.9%). The decrease in the effective tax rate from H1 2024 to H1 2025 is primarily due to the gain on disposal of Fox Crypto, which was non-taxable. The decrease in the adjusted tax rate was due to the release of a provision in relation to US R&D tax credits and a movement in unrecognised deferred tax assets.

Adjusted profit for the period is reconciled as follows:

1: Adjusted EPS is an Alternative Performance Measures (APMs) and not an IFRS measure. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information.

2: There is no tax impact on the Group's H1 2025 adjusting items, they predominantly relate to the non-taxable gain on the disposal of Fox Crypto, which is included within ISIs(see Note 4).

Reconciliation of net debt 1The table below summarises the Group's cash flow and net cash/(debt) 1:

Net cash/(debt) 1 can be reconciled as follows:

Following the completion of the disposal of Fox Crypto on 28 March 2025, the Group's cash and cash equivalents at 31 March 2025 included £65.6m of consideration received. Subsequent to the period end, this amount was utilised to reduce the Group's borrowings in June 2025.

Reconciliation of net change in cash and cash equivalents to movement in net debt 1

1: Net debt is an Alternative Performance Measures (APMs) and not an IFRS measure. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information.

The calculation of the cash conversion ratio 1 is set out below:

1: Revenue at constant currency, Adjusted EBITDA, Adjusted Operating profit, Adjusted basic EPS, Net cash/(debt) excluding lease liabilities and cash conversion are Alternative Performance Measures (APMs) and not IFRS measures. See unaudited appendix 1 and the Financial Review for an explanation of APMs and adjusting items, including a reconciliation to statutory information. 

2: The Group reports only one adjusted item: Individual Significant Items (which includes the £11.3m profit on disposal of Fox Crypto and £1.9m of re-organisation & strategic review of Escode costs). For further details, please refer to unaudited appendix 1 and the Financial Review, which includes an explanation of APMs and adjusting items, along with a reconciliation to statutory information.

Cash conversion has fallen by 49.5% pts to 62.3%, predominantly driven by the decline in performance half-on-half and one-off adverse movements within the Group's working capital.

Cash capital expenditure during the period was £1.6m (H1 2024: £5.9m) which includes tangible asset expenditure of £1.3m (H1 2024: £5.1m) and capitalised software and development costs of £0.3m (H1 2024: £0.8m). Following the opening of our new Manila office in November 2023, upfront tangible asset capital expenditure was comparatively higher in the prior period, primarily due to amounts spent on fixtures, fittings, and computer equipment to make the office operational.

During the period, the Company acquired treasury shares (4,000,000 ordinary shares) for £5.8m, this follows shares (4,000,000 ordinary shares) purchased in H2 2024 for £5.8m. The Shares are held in the EBT, which is a discretionary trust for the benefit of the Group's employees. The Shares will be used to satisfy the future vesting requirements of share plans the Company operates under the Long-Term Incentive Plan, Restricted Share Plan and other discretionary share plans. Following this purchase, and as at 31 March 2025, the EBT holds a total of 8,524,894 ordinary shares, equating to 2.71% of the Company's issued share capital.

Dividends Total dividends of £4.6m were recognised in the period (H1 2024: £4.7m) which represented the final dividend for the 16 month period ended 30 September 2024 of 1.50p.

The Board is declaring an interim dividend of 1.50p per share for the 6-month period ended 31 March 2025 (H1 2024: 1.50p), as it remains mindful of the continued need to invest in the Group's strategy, marking 20 consecutive years of dividend payments for shareholders.

The proposed interim dividend was recommended by the Board on 19 June 2025 and will be paid on 1 August 2025, to shareholders on the register at the close of business on 4 July 2025. The ex-dividend date is 3 July 2025. The dividend has not been included as a liability as at 31 March 2025. The payment of this dividend will not have any tax consequences for the Group.

Principal risks and uncertainties

The Board has reconsidered the principal risks and uncertainties published at the full 16-month period ended 30 September 2024. The following risks and uncertainties are those that the Directors believe could have the most significant impact on the Group's business and remain unchanged from the year end:

· Strategy - overarching strategic risk

o  Inability to execute the Group's strategy

o  Poor adoption of change management mechanisms

o  Over-reliance on market sector, product/service or client

o  Technology changes render services obsolete/technology disruption impacts pace of change

o  Unable to meet the service and resource needs of our clients

· Cyber and information security

o  Cyber attack

o  Significant business systems failure

o  Loss of client/colleague data

o  Insufficient quality, integrity and availability of management information

· Innovation and service development

o  Intellectual property theft or exposure

o  Ineffective product/service management

o  Lack of Innovation

· People and partners

o  Insufficient workforce resilience

o  Inability to retain/recruit colleagues to meet the resource needs of the businesses

· Market and competition

o  Failure to capture on partnership ecosystem

o  Geopolitical risk

o  Lack of market strength versus competitors

· Brand and reputation

o  Lack of visibility in the marketplace

o  Adverse publicity in news and social media

o  Undertaking work with disreputable clients or in sanctioned/undesirable jurisdictions

· Quality and delivery

o  Service delivery does not achieve established quality standards

o  Loss of internationally recognised quality and security standards

· Legal, regulatory compliance and governance

o  Criminal and civil legal action resulting in fines and incarceration

o  Inability to identify and adopt emerging regulations in a timely manner

Directors' responsibility statement

The directors confirm that these condensed interim financial statements have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

· an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

· material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The Half Year Report is approved and authorised for issue on behalf of the Board on 19 June 2025 by:

Condensed consolidated income statement

For the period ended 31 March 2025

The accompanying notes 1 to 10 are an integral part of these condensed consolidated financial statements.

Condensed consolidated statement of comprehensive income

For the period ended 31 March 2025

The accompanying notes 1 to 10 are an integral part of these condensed consolidated financial statements.

Condensed consolidated balance sheet

as at 31 March 2025

The accompanying notes 1 to 10 are an integral part of these condensed consolidated financial statements.

These condensed financial statements were approved and authorised for issue by the Board of Directors on 19 June 2025 and were signed on its behalf by:

Mike Maddison Guy Ellis

Chief Executive Officer Chief Financial Officer

Condensed consolidated cash flow statementFor the period ended 31 March 2025

The accompanying notes 1 to 10 are an integral part of these condensed consolidated financial statements.

Consolidated statement of changes in equity

For the period ended 31 March 2025