NCC Group plc (NCCGF) Q4 2025 Earnings Call Transcript

2025-12-15 14:29:32 ET

NCC Group plc (NCCGF) Q4 2025 Earnings Call December 10, 2025 7:00 PM EST

Company Participants

Mike Maddison - CEO & Director
Guy Ellis - CFO & Director

Presentation

Mike Maddison
CEO & Director ...

Hello. I'm Mike Maddison, CEO of NCC Group. And along with my colleague, Guy Ellis, the CFO, we are pleased to bring you our full year results for 30 September 2025 in this presentation. I want to start with some important points. First of all, as predicted, this was a year of 2 halves. We had a challenging first half, as we talked about at our interims on the 19th of June. But as highlighted in our trading update in October, we saw improved performance in the second half. Overall, the results are in line with the Board's expectations and good strategic progress is being made across both the Cyber and the Escode businesses.

As a reminder, we have 2 reviews in progress. The Escode review and the strategic review of the Cyber Security business, which is independent from both the process and the outcome of the Escode review. Regardless of the outcome of the Escode review and as announced in our October trading update, we will launch the initial share buyback program once the Escode review concludes. Now I know you'll have lots of questions, but as a reminder, NCC Group remains in an offer period under the Takeover Code rules. This does restrict what we can say about current trading and the financial outlook for the group.

So with that context, let me give you an overview of our 2 businesses in FY '25. For those unfamiliar with the business, let me first provide you with an overview of who NCC Group is. Our strategy recognizes and reflects that we have 2 distinct businesses, both operate with the goal of providing increased operational resilience. And while there is some overlap in clients, the buyers and buying cycles are fundamentally different. Both our businesses provide services to clients where we are a trusted partner. And by that, I mean, we support a significant client base at both the enterprise and SME level, and it's in every sector and with a global footprint. We bring deep skills that address compliance issues and/or provide solutions to build Cyber resilience. Both of our businesses have multiple growth drivers.

In Cyber Security, this relates to the ever-increasing threat landscape, digital adoption and the shortage of necessary skills to meet these evolving client needs. In Escode, the drivers are linked to regulatory requirements, particularly in the critical infrastructure arena. Our group retains strong financials with an increased mix of recurring revenues and importantly, an improved balance sheet, which gives us increased optionality. And I'm delighted that our Escode business has now delivered 12 consecutive quarters of growth.

So let me give you some color on each of the businesses in FY '25. Firstly, let me talk about Escode. The Escode business continues to perform consistently, and I think I've already mentioned this. Delighted to say that we've delivered 12 consecutive quarters of growth. We've continued to execute on our plan for this business consistently. Highlights include: we've reorganized the sales structure by industry verticals to deliver deeper sector expertise, create greater value for customers in finance, critical infrastructure and commercial markets. We've been establishing a new customer acquisition team focused on ideal customer profiles within our growth sectors in the U.K. and also the U.S. market.

We've seen an expansion of our software verification offering to include fully independent builds of cloud-hosted solutions, ensuring greater reliability and trust. And we've been broadening our regional presence with an extended focus into the Middle East, which we've highlighted previously. Let me give you the highlights for the Cyber Security business in FY '25. While the economic conditions are doing us no favors, as I said, this year was 1 of 2 halves. It's worth noting that our Technical Assurance Services is intrinsically linked to economic conditions. And as a result, customer buying reflects the economic cycle.

Despite this, and as Guy will talk to in more detail in his section, we've made good progress against our strategy in FY '25, and it continued very much in line with the areas we highlighted in June at our trading update. So those key highlights. We've had investment in strategic sales capability to build deeper relationships in each of our markets. For example, we put in place market leadership with experience of strategic consultative selling. We've launched client propositions with embedded technology at their heart. For example, our Continuous Offensive Security service was launched, highlighting our emphasis on moving to increased subscription services as part of our strategy to increase ARR and to build longer-term, more strategic engagements with our clients.

The investments we made in consulting and implementation services, in particular, operation technology and information technology convergence and identity and digital access management is generating value, which Guy again will highlight in the financials. We've put the foundations in place for an enhanced global account management approach, which will deepen relationships and unlock revenue opportunities. And I really want to emphasize this point. We've put in place a global sales operation capability, and we've improved our management information. This enabled us to highlight the positive deal quote creation trajectory in December 2024, which turned into sales and then into revenue in the second half.

This allowed us to make informed decisions on balancing supply and demand in January as we were confident in the forward look. We've now also fully implemented global scheduling, time sheets and pricing tools, which is a significant cultural shift within NCC Group. We've also completed the DetACT and Fox Crypto sales, fully separating those businesses and the operational efficiencies that come with it. Now I'm now going to hand over to Guy to bring to life some of these points through the financials, and I'll then talk a little bit more about our strategy and our future focus. Guy, over to you.

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