Shares in cyber security specialist NCC (NCC) suffered a harsh sell-off in April, following a disappointing trading update. But they've bounced back on the back of these full-year figures, which revealed solid organic growth and healthy operating margins.
At the fast-growing assurance division - which protects IT systems from unauthorised entry - revenue grew 18 per cent in the period to £70.7m, of which 10 per cent was organic growth. The operating margin here held steady at 17 per cent, too. The escrow division - which looks after IT system source codes, so that companies can continue operating in the event of a supplier failure - saw sales rise by a more modest 2 per cent to £28.5m, although the divisional operating margin improved slightly to a rewarding 59 per cent.
Moreover, NCC appears to have drawn a line under April's lacklustre trading update. Finance director Atul Patel said the lower-than-expected sales growth back then reflected three separate incidents - involving staff leaving, or needing to be replaced. Accordingly, management says the outlook for the current year remains strong, with the assurance testing division's order book and renewals up 20 per cent year on year and modest growth expected again at the escrow unit.
Broker Canaccord Genuity expects adjusted pre-tax profit of £25.8m for 2014, giving adjusted EPS of 8.8p from £23m and 8.4p for 2012-13).
NCC (NCC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 135p | MARKET VALUE: | £280m | |
| TOUCH: | 135-136p | 12-MONTH HIGH: | 171p | LOW: 103p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 34p* | NET DEBT: | 36% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2009 | 46.8 | 10.9 | 3.82 | 1.54 |
| 2010 | 47.6 | 13.0 | 4.58 | 1.79 |
| 2011 | 71.0 | 12.8 | 4.58 | 2.17 |
| 2012 | 87.7 | 10.6 | 3.70 | 2.68 |
| 2013 | 99.2 | 18.8 | 7.00 | 3.10 |
| % change | +13 | +77 | +89 | +16 |
Ex-div: 21 Aug Payment: 20 Sep **Includes intangible assets of £106m, or 51p a share *Restated for December 2012's five-for-one bonus issue | ||||
