NCC delivered a solid full-year performance, marred only by impairment costs relating to a failed IT system that wiped £7m from pre-tax profits. Leaving that aside, adjusted pre-tax profit rose 27 per cent to £22.6m. Nonetheless, some analysts are doubtful over whether the last year's exceptional growth rates can be maintained and, after having risen 9 per cent since late June, the shares now look up with events.
The group's two core divisions both performed well, with the assurance division - which protects IT systems from unauthorised entry, as well as covering audit and compliance - boosting operating profit by 58 per cent to £10.3m. And with the risks to companies and government growing from cyber crime related threats, management expects to see more spending on IT security. Meanwhile, the Escrow operation - which looks after IT system source codes on behalf of its customers, and allows them to continue using their systems even if a supplier fails - saw both revenues and profits rise 12 per cent, to £27.9m and £16.3m, respectively.
Broker Investec Securities currently expects adjusted pre-tax profit of £23.4m for 2013, giving EPS of 48.3p (46.7p in 2012), but expects to upgrade these estimates by around 5 per cent.
| NCC (NCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 813p | MARKET VALUE: | £279m | |
| TOUCH: | 808-815p | 12-MONTH HIGH: | 922p | LOW: 610p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 176p* | NET DEBT: | 38% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 35.7 | 8.70 | 18.9 | 7.00 |
| 2009 | 46.8 | 10.9 | 22.9 | 9.25 |
| 2010 | 53.7 | 13.2 | 27.9 | 10.8 |
| 2011 | 71.0 | 12.8 | 27.5 | 13.0 |
| 2012 | 87.7 | 10.6 | 22.2 | 16.1 |
| % change | +24 | -17 | -19 | +24 |
Ex-div: 29 Aug Payment: 28 Sep *Includes intangible assets of £89m, or 261p a share | ||||
