NCC (NCC) delivered a solid first-half performance, with its core assurance and escrow divisions both having pushed turnover ahead - although headline profits dipped slightly after £825,000 of acquisition-related costs. NCC broadened its geographical spread, too, with non-UK revenue having grown from 31 per cent to 35 per cent of total turnover.
At the assurance division, which protects IT systems from unauthorised entry, as well as covering audit and compliance data, sales rose 18 per cent in the period to £34.2m. That business now generates 71 per cent of group turnover, up from 68 per cent a year earlier. Turnover was boosted by two acquisitions, in New York and Chicago, as well as by the establishment of a small operation in Texas. Moreover, the division's success was highlighted after it managed to double, to 259, the number of vulnerable situations that it uncovered for clients.
Meanwhile, the escrow operation - which looks after IT system source codes, so that companies can continue to operate even if their supplier fails - delivered a 3 per cent rise in turnover to £13.9m. While escrow is a smaller division than assurance, margins there are significantly higher and recurring revenue also comprises a high proportion of the total. Looking forward, second-half income should be boosted by price increases implemented in November.
Broker Canaccord expects full-year adjusted pre-tax profit of £23.8m, giving EPS of 8.1p (from £22.6m and 7.7p in 2012).
| NCC (NCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 143p | MARKET VALUE: | £297m | |
| TOUCH: | 139-143p | 12-MONTH HIGH: | 171p | LOW: 118p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 30p** | NET DEBT: | 45% | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p*) | Dividend per share (p*) |
|---|---|---|---|---|
| 2011 | 42.2 | 7.78 | 3.22 | 0.85 |
| 2012 | 48.1 | 7.54 | 3.08 | 0.98 |
| % change | +14 | -3 | -4 | +15 |
Ex-div: 23 Jan Payment: 22 Feb *Adjusted for December 2012's five-for-one bonus share issue **Includes intangible assets of £103m, or 50p a share | ||||
