NCC Group (NCC) H2 2025 earnings summary

Executive summary

• FY 2025 saw a challenging first half and a stronger second half, with results in line with board expectations and strategic progress in both Cyber and Escode businesses.

• Two strategic reviews are ongoing: one for Escode and one for the cybersecurity business, with the latter independent of the Escode review.

• The group is debt free, with a higher mix of recurring revenues and a flexible balance sheet.

• Both businesses serve a global client base, with Cyber driven by threat landscape and skills shortages, and Escode by regulatory requirements in critical infrastructure.

Financial highlights

• Group revenue declined by 7.2% year-over-year to £305.4m; Escode grew and Cyber improved in H2.

• Gross margin improved by 1.1 percentage points to 44.5%, though absolute gross margin cash declined by £3.1m due to lower revenue.

• Adjusted EBITDA decreased by 12.1% to £43.7m, mitigated by £1.6m in-year savings and £4m annualized savings from operational efficiencies.

• Operating profit improved by £41.8m year-over-year to £22.8m, mainly due to a £40.9m reduction in significant items charges.

• Net cash position of £13.1m at year-end, aided by disposals and strong cash conversion.

Outlook and guidance

• Cybersecurity is expected to return to revenue growth in FY 2026; Escode is projected for low single-digit growth.

• Adjusted EBITDA, excluding non-core disposals, is expected to be in line with board expectations.

• Dividend maintained for FY 2025; initial share buyback of up to 10% of share capital to commence after Escode review concludes.