Northcoders Group (CODE) H2 2024 earnings summary

Executive summary

• Revenue rose 24% to £8.8m; adjusted EBITDA recovered to just under £1m after a 2023 investment year. The period ended with £1.2m cash and £5.3m net assets.

• Student volumes were broadly level with 2023 at around 1,100 for the period, while higher revenue per seat lifted overall revenue; the hiring-partner network reached 510.

Financial highlights

• Revenue £8.8m; gross profit £5.9m and gross margin 67%; adjusted EBITDA just under £1m, adjusted only for share-based payment expense.

• Profit after tax £388k; tax liability £9k, reduced by carried-forward losses and R&D tax credits; basic EPS 4.58 and adjusted EPS 6.58.

• Operating cash flow £978k; investing cash outflow £819k, including £571k of intangible asset investment and £240k deferred consideration for the Tech Returners acquisition.

Outlook and guidance

• Q1 2025 was described as successful for graduates moving into work; management said the year had started ahead of expectations and remained confident in planned delivery.

• Contracted revenue stood at £4.1m as at April; management expected it to grow as regional funding awards are released and the Department for Education contract timing normalizes.

• Counter had over £1m of revenue contracted for 2025 and a potential-contract pipeline valued at ~£2m.

• Training gross margin strategy targets ~72%; as Counter grows at ~50% gross margin, management expects the blended margin to settle near 65%.