‘Business as usual’ seems to be the key message NCC’s (NCC) new management want investors to take away from these results. Like-for-like revenue ticked up 3 per cent, bolstered by £21.1m of sales from acquisitions. Geographical expansion is under way, with 39 per cent of revenue now coming from outside of the UK. Good numbers, if the mayhem of the past six months can be brushed aside. Many investors appear to have done just that, sending the share price up 8 per cent on results day.
But is NCC’s historic miss-management really that easy to forgive? In November 2015, the group raised £126m from shareholders to fund two acquisitions in the fast-growing cyber security space. Now management has been forced to admit that it overpaid for those businesses and has taken a £62m write-down on intangible assets. That and other “significant charges” – which include long overdue holiday pay provisions and dividends being paid illegally from non-distributable reserves – swung the group into an operating loss of £53.4m, from a profit of £11.4m this time last year.