rns (extract)18 Apr 2013 12:27
18 April 2013
NCC Group
Interim Management Statement
NCC Group plc (LSE: NCC or "the Group"), the international, independent provider of Escrow and Assurance, is today publishing its Interim Management Statement to 17 April 2013.
The Group continues to grow well across most of its operating units and remains extremely profitable and cash generative. However, in aggregate a number of small, unrelated factors have held back the Group's overall rate of expected growth over the last four months.
The Board now expects Group revenues for the financial year to 31 May 2013 to be not less than £99.0m (2012: £87.7m) and adjusted profits before tax will be not less than £23.0m (2012: £22.6m), which is some 3% and 4% respectively below current market expectations.
In the first 10 months of the financial year, Group revenues are 12% ahead of the same period last year at £80.4m (March 2012: £72.0m), which reflects 7% organic growth.
The Group's balance sheet remains strong with net debt currently £30.7m (March 2012: £25.4m) against the new £40m three-year revolving credit facility signed in April 2013, and an additional £5m overdraft facility.
Group Escrow
The market for Escrow, as reported at the half-year results, continues to be challenging as customers have continued to delay spending on new applications or upgrades of business critical applications.
Group Escrow is performing largely as seen in the first half of the year. Overall revenue growth to date has been 2% (March 2012: 14%, organic growth: 7%).
Escrow UK, the cornerstone of NCC Group, has seen 3% revenue growth (March 2012: 7%).
Escrow Europe saw a positive performance after a period of decline. Despite the 4% decline in revenues to date, it is expected that the revenues will, as previously anticipated, achieve that of last year by 31 May 2013.
The Escrow North American businesses' combined rate of growth is 3%. There was a 15% revenue growth in Atlanta but a 6% decline in San Francisco. The Group expects this performance to improve with the appointment of a new US General Manager.
Group Escrow renewals are now forecast to be £17.8m for the current financial year (March 2012: £17.3m.) The global verification order book continues to be solid and is at £2.1m (March 2012: £1.8m). Group Escrow termination rates remain below 12% for contracts (March 2012: 12%).
Assurance
The global security market has continued to grow strongly. Recent attacks and initiatives further confirm that expenditure in this area will continue to increase.
The Assurance division continues to benefit from the heightened awareness of cyber-crime as more and more high profile organisations fall foul of significant attack or data loss. Although the division operated satisfactorily overall, delivering 16% year on year growth (9% organic growth), parts of the US business ha