Cyber security specialist NCC continues to go from strength to strength, and after taking into account exceptional items, adjusted pre-tax profits rose by 21 per cent to £17.3m which underpinned the generous rise in the dividend.
And the trend looks set to continue, thanks to a significant rise in the use of the internet and companies' reliance on more and more software programmes. NCC offers companies an escrow agreement whereby it keeps a copy of source codes to guard end-users against a situation where a software licence is withdrawn. Growth was particularly strong in the US where sales rose by 24 per cent, boosted in part by the acquisition of Escrow Associates, although the UK still provides 81 per cent of profits in this division.
There was also solid progress in NCC's assurance division which accounts for almost two thirds of group revenue, up from 52 per cent a year ago. Excluding the acquisition of SDLC and iSEC Partners, revenue rose by 17 per cent to £27.1m. NGS was the best performer, where demand for ethical testing grew strongly. This is a service where NCC attempts to break into its customers websites as a way of developing protective software to prevent illegal hacking.
Altium Securities is forecasting 2012 adjusted EPS of 43.4p (2011: 37p).
| NCC (NCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 675p | MARKET VALUE: | £ 230m | |
| TOUCH: | 660-685p | 12-MONTH HIGH: | 685p | LOW: 410p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 165p* | NET DEBT: | 37% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 25.4 | 7.8 | 16.5 | 4.80 |
| 2008 | 35.7 | 8.7 | 18.9 | 7.00 |
| 2009 | 46.8 | 10.9 | 22.9 | 9.25 |
| 2010 | 47.6 | 13.0 | 27.5 | 10.75 |
| 2011 | 71.0 | 12.8 | 27.5 | 13.00 |
| % change | +49 | -2 | - | +21 |
Ex-div:31 Aug Payment:30 Sep *Includes intangible assets of £94m or 275p a share | ||||
