NCC delivers solid if slower growth as '.secure' plans progress

Information security company NCC Group recorded robust growth from top to bottom line, but at a slower rate than in the previous decade. The group had issued a small profit warning in April.Margins were squeezed slightly as the company said its markets remained subdued and difficult to predict, particularly for its Escrow division, while both Assurance and Escrow in the US did not perform as strongly as management had expected despite two Assurance acquisitions in New York. Revenues grew 13% to £99.2m, with underlying organic growth of 10% if an unusually large one-off Assurance contract in the previous year is discounted. Operating profit margins fell from 27% to 24% due to more Assurance business, which is lower margin, and investment in its new San Francisco-based subsidiary Artemis. Artemis has received initial approval from its registration of the .secure generic top level domain - as a new website suffix such as .com or .biz to "create a universal environment for end users to operate and navigate the internet with complete safety and security".Artemis received £2.3m of investment during the year and remained on time and on budget, with NCC planning to "invest progressively" and an expectation that the service will start to be delivered for major customers during the second half of this financial year.Group Chief Executive Rob Cotton said the company had delivered what was a "solid" performance.Reported operating profit rose 70% to £19.8m, although when adjusted for acquired intangibles, exceptional items and share based payment charges, rose just 1.8% from £22.6m to to £23.0m.With a cash conversion ratio slipping to 116% of operating profit, down from 131% the year before, the dividend was lifted 16% to 3.1p. "We continue to strengthen our market leading position in growing markets. Our .secure venture is making good progress and is on track to start generating revenue in 2014. "With total renewals and order book of £51m already secured for the current financial year and our global reach and product range providing a platform for sustained long term growth, the outlook for the group remains very good."Shares in NCC Group were up 6.9% at 135p at 09:30 on Thursday.OH Ncc