The cybersecurity sector is a rare bright spot in the market at the moment, so it is perhaps unsurprising that NCC’s (NCC) trading has largely held up through 2020, despite an estimated £15m blow to sales due to the pandemic.
In the assurance segment, revenues grew by 5.2 per cent in the year. But it was not sunny across the whole division: risk management consulting sales dropped by almost a fifth, which chief executive Adam Palser described as the most disappointing part of the company’s performance. Last year the service accounted for over a tenth of assurance revenues. Elsewhere in the software escrow business, sales dipped slightly by 1.3 per cent.
Management has cut net debt by more than three quarters (ex lease liabilities of £38.2m), even after the full draw-down of £100m from its revolving credit facility in April. Analysts at broker Jefferies expect that the company will move into net cash in its 2022 financial year.
Jefferies forecasts a pre-tax profit of £26.2m and EPS of 7.6p per share for May 2021, rising to to £42.6m and 12.5p in FY2022
| NCC (NCC) | ||||
| ORD PRICE: | 187p | MARKET VALUE: | £ 522m | |
| TOUCH: | 187-189p | 12-MONTH HIGH: | 134p | LOW: 234p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 77p* | NET DEBT: | 20% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 209 | 9.4 | 2.5 | 3.98 |
| 2017 | 215 | -44.8 | -17.0 | 4.65 |
| 2018 | 233 | 11.7 | 4.4 | 4.65 |
| 2019 | 251 | 17.8 | 4.9 | 4.65 |
| 2020 | 264 | 16.1 | 4.2 | 4.65 |
| % change | +5 | -10 | -14 | - |
| Ex-div: | 08 Oct | |||
| Payment: | 06 Nov | |||
| *Includes intangible assets of £232m or 83p a share | ||||
