NCC Group (NCC) H1 2026 earnings summary

Executive summary

• Completed sale of Escode, transforming into a pure-play cybersecurity business and concluding the strategic review, with sharpened focus on high-value, recurring revenue streams and operational simplification.

• Achieved three consecutive quarters of Cyber revenue growth, including double-digit organic growth in the UK for H1 2026.

• Record H1 Cyber gross margin of 38.4%, driven by operational discipline and AI-enabled efficiencies.

• Enhanced client engagement and retention, with gross revenue retention rising to 85% and net retention rate to 94%.

• Initiated a £170m tender offer and £15m share buyback, targeting a total £185m return to shareholders post-Escode disposal.

Financial highlights

• Group revenue up 5.0% year-over-year to £151.3m for H1 2026; Cyber Security revenue up 5.9% to £118.4m.

• Adjusted EBITDA increased 27.7% to £23.5m; Cyber adjusted EBITDA up 130.6% to £8.3m.

• Record H1 gross margin of 45.9% for the group; Cyber gross margin up 3.2 pts to 38.4%.

• Adjusted EBIT margin rose to 11.8%; adjusted basic EPS up 200% to 4.5p.

• Net debt at £10.2m as of 31 March 2026, moving to c.£230m net cash post-Escode sale.

Outlook and guidance

• Adjusted EBITDA expected to grow ahead of revenue, with margins projected at 5.5%-7.5% for the year.

• Board remains confident in achieving mid-teens EBITDA margin for Cyber by FY 2028, with £25m cost savings targeted by FY 2028.

• Continued focus on scaling key accounts, expanding in priority markets, and increasing recurring revenue.

• Dividend policy to remain aligned with profitability post-Escode disposal.