Final Results

RNS Number : 4755D
NCC Group PLC
07 July 2016
 

7 July 2016

 

NCC Group plc

 

Continued rapid growth of international cyber security drives profits up 48%

 

NCC Group plc (LSE: NCC or "the Group"), the independent global cyber security and risk mitigation expert, has reported its full year results for the 12 months to 31 May 2016.

 

Highlights

§ Group revenue up 56% to £209.1m (2015: £133.7m), organic growth 19%

§ Group EBITDA* up 48% to £43.7m (2015: £29.5m) before £18.9m exceptional charge

§ Group adjusted operating profit* up 46% to £38.4m (2015: £26.4m)

o   Assurance operating profit up 52% to £25.8m (2015: £17.0m)

o   Escrow operating profit up 6% to £20.1m (2015: £18.9m)

§ Group adjusted profit before tax* up 45% (2015: 1%) to £37.0m (2015: £25.5m)

§ Adjusted fully diluted earnings per share up 19% to 11.2p (2015: 9.4p)

§ Total dividend up 17% to 4.65p (2015: 3.98p) - since July 2004 flotation, dividend increased from 0.42p to 4.65p, CAGR of 25%

 

Operational

§ Fox-IT integration on track - global roll out of services expected to start during current financial year

§ Accumuli fully integrated - focus on substantial cyber security market opportunities

§ Strongest Escrow revenue growth in 10 years

§ Withdrawal from Domain Services but domain security capability retained

o   Open Registry to be realised and other assets written down

o   Exceptional charge of £13.7m, including £0.9m cash cost

§ Employees increased by 40% to 1,857 worldwide (2015: 1,388)

§ First PLC to form Cyber Security Committee - on a par with Audit and Remuneration Committees

 

Outlook for 2016/2017

§ Group's forecast contracted recurring revenue and current order book up 67% to £104.6m (2015: £62.7m)

o   Group contracted recurring revenues are £48.5m

 

* All Group adjusted figures exclude the amortisation of acquired intangibles, exceptional charges, share-based charges and unwinding of discount on deferred consideration.

 

Rob Cotton, Group Chief Executive, comments:

 

"This has been a year of notable progress for the business. We fully integrated Accumuli, considerably expanded our capabilities with the acquisition of Fox-IT and delivered a significant increase in earnings, up 19% - and increased dividends by 17%, a 12 year CAGR of 25%.

 

"The threat intelligence capabilities that Fox-IT brings to the Group are proving to be a key point of differentiation. We look forward with increasing confidence as we roll out its services to customers across the Group.

 

"The threat of being hacked or having valuable data stolen continues to grow at a seemingly unstoppable pace. With our global reach and increased product range, we remain tightly focused on exploiting the opportunities to deliver sustained long term growth.

 

"The cybercrime arms race is the single biggest threat to corporates and individuals globally particularly as cybercrime is not bound by national borders or political and trade treaties.

 

"Regardless of when or how the various negotiations develop with the EU, if the UK wants to trade with the EU on equal terms, UK data protection standards will have to be equivalent to the EU's General Data Protection Regulations ("GDPR"). For the UK to do business with the EU, or any other country for that matter, it is vital that data protection standards and legislation is of the highest order.

 

"Although cyber threats are now an everyday occurrence for businesses and individuals alike, there needs to be a cultural shift as it is clear that the required behavioural change at all levels is severely lagging. A recent government cyber survey of FTSE 350 companies indicated that only 33% of boards understood their appetite for cyber risk - 67% do not!

 

"All listed companies should have a Board-led Cyber Security Committee. As such, we are creating a Cyber Security Committee to sit alongside our Audit and Remuneration Committees."

 

*FTSE 350 Cyber Governance Health Check Report 2015 published on 8 May 2016.

 

Enquiries:

 

NCC Group (www.nccgroup.trust)

+44 (0)161 209 5432

Rob Cotton, Chief Executive

 

Atul Patel, Group Finance Director

 

 

 

Instinctif Partners

 

Adrian Duffield/Lauren Foster

+44 (0)20 7457 2020

 

Overview

 

The twelve months to 31 May 2016 was yet another year of strong and consistent growth for NCC Group. Notably during the year, the Group joined the FTSE250 index. This is yet another milestone for the Group and demonstrates how far the business has grown and developed over the last 12 years.

 

During the last 12 months, Group revenues grew by 56% to £209.1m (2015: £133.7m) with Group EBITDA increasing by 48% to £43.7m (2015: £29.5m). Adjusted pre-tax profits and adjusted fully diluted earnings per share were up 45% to £37.0m (2015: £25.5m) and 19% to 11.2p (2015: 9.4p) respectively.

 

Reflecting the Board's commitment to a progressive dividend policy, which broadly tracks earnings growth, a final dividend of 3.15p is being recommended, making a total for the year of 4.65p, up 17%.

 

The Group continues to be highly cash generative with underlying operating cash conversion representing 107% of operating profit (2015: 107%) with net debt down to £12.7m (2015: £50.6m).

 

2015/2016 was a year of tangible progress, strategically, operationally and financially. The Group raised £126.3m by way of a firm placing and a placing and an open offer in November and December 2015, which helped fund the acquisition of Fox-IT.

 

Operationally, the Group completed the integration of Accumuli plc, which has been rebranded NCC Group Managed Security Services and has commenced the process with Fox-IT. Both are performing in accordance with expectations.

 

Following a strategic review after the year-end, the Board has taken the disappointing decision to divest and reallocate some of the assets in the Domain Services division. This has resulted in an exceptional charge of £13.7m of which £0.9m is a cash cost.

 

The Group continues to believe that safe, controlled open or branded domains will play a major part in the Internet landscape in the years to come, but has recognised that other opportunities will provide a faster return on Group assets and investments.

 

As a result, certain parts of the Division will be divested in due course, although the capability to provide a secure domain environment will be retained.

 

NCC Group is committed to leading the push to make the Internet a safer place for all and as its markets continue to quickly evolve, the Group remains active in innovating and creating new services to address the numerous emerging opportunities.

 

Both the Assurance and Escrow divisions have continued to grow strongly. Assurance has yet again shown stellar revenue growth of 74%, of which 25% was organic, while Escrow achieved record organic growth of over 10%, all of which translated into Group adjusted pre-tax profit growth of over 45%.

 

In line with the acquisition strategy, the Group added another security technology company. Fox-IT provides complementary security consulting services in Europe and offers advanced threat analytics, cryptography services and products, which the Group was previously lacking.

 

This enables the Group to supply a wider range of security related services to its customers globally and ensures that the Group is a comprehensive one-stop consultancy led security services company that caters for all of a client's requirements.

 

Overall, the Group's strategy remains fundamentally unchanged. The Group aims to develop both complementary divisions organically and by acquisition to deliver excellent service and value for money to customers. This will continue to drive growth across the Group.

 

The Group will continue to actively seek to acquire services-led businesses in both Europe and North America to complement its geographical and technical presence. In addition, new offices will be opened in Singapore and Dubai, with consideration being given to a significant central London office.

 

Cyber Security Committee

 

NCC Group has stated on a number of occasions that the responsibility for cyber security rests directly with a company's Board and should be approached and managed with the same vigour and transparency as audit, remuneration, health and safety and CSR.

 

This year NCC Group will form a Cyber Security Committee, led by the Senior Independent Non-Executive Director, and comprising the Non-Executive Directors and the CEO. The CEO will report monthly to the Committee on the performance of the Group's internal security and defences. The Group believes it is the first listed company to create a Cyber Security Committee at a Board level.

The Group believes that with the ever rising threat of cyber-attacks, all listed companies should have a Board led Cyber Security Committee.

 

Outlook

 

The whole organisation is focused on client risk mitigation and delivering peace of mind, through a complementary range of services offered to an increasing range and number of multinational clients to address their business issues.

 

NCC Group has established itself as one of the leading pure play cyber security services businesses with an extremely wide geographical footprint and has the largest number of industry experts.

 

Across the Group, the current financial year has started well and the market for the Group's services remains as strong as ever. It is still too early to assess how the decision made by the UK to leave the EU will affect the Group but this is being carefully monitored.

 

The Group's recurring income is significant and has increased. The start to the year sees Escrow renewals increasing to £20.5m (2015: £19.3m) and Assurance has £28.0m (2015: £6.8m) of managed services, threat intelligence and monitoring renewals forecast for the current financial year.

 

The Assurance division's order book has improved to £53.1m (2015: £32.3m) and Escrow verification orders total £3.1m (2015: £2.4m).

 

The Group's total renewals and order books now stand at £104.6m (2015: £62.7m).

 

The outlook for NCC Group remains very positive. The Group is operating in a number of fast growing international markets where it can offer its existing extensive capabilities as well as a range of new and innovative products and services.

 

As a consequence of all these factors, alongside the integration and roll out of Fox-IT products and services, the Board is confident that the Group can continue to deliver sustainable growth and enhanced shareholder value.

 

Strategic report

 

Group strategy - delivering sustained growth based on innovation, expertise & independence

 

NCC Group is a global expert in cyber security and risk mitigation providing organisations worldwide with market leading escrow and verification, security consulting and web performance solutions.

 

The Group set about building its future around the software escrow business while looking for new areas of growth in the then uncharted territory of information and cyber security. Since then, through carefully constructed, controlled and sustainable organic growth along with a carefully planned and well-executed strategic acquisitions programme, the Group has developed into a leading multinational provider in both areas.

 

The Group now operates in two distinct but complementary divisions, Assurance and Escrow, having taken the decision to withdraw from providing Domain Services.

 

The two Divisions do not actively cross-sell. However, they do share information, intelligence and relationships to ensure that the appropriate products across the portfolio are made available to all our clients.

 

Both divisions are tasked with and measured on providing the best client service, allied to offering appropriate services to help mitigate risk. The Group is cautiously and diligently looking for acquisition opportunities of complementary businesses that either further strengthen its market position, geographic presence or appropriately extend the service offering.

 

Each division has a common objective, to innovate and develop further its product sets, to ensure that it remains at the forefront of thought leadership and delivery, as well as to expand geographically where appropriate.

 

Markets and positioning

 

The Group's markets continue to evolve quickly and it remains active in innovating and creating new services to address the numerous emerging opportunities.

 

Innovation, creation and research and development are the key touchstones of the Group's development and growth. Never has this been more important as the world finally wakes up to the cyber threat that is now an everyday occurrence for businesses and individuals alike.

 

The Group is committed to making the Internet a safer place for all. NCC Group's continued investment in people and research led initiatives means that it is well placed to call for changes to make Boards truly accountable for the security of their organisations.

 

Online security continues to fail to keep up with the numerous types of individual and indeed organisations that transgress the Internet. The threat of being hacked or having valuable data stolen continues to evolve rapidly and it is growing at a seemingly unstoppable pace.

 

Phishing, fake payment requests and ransomware attacks are every day events and have increased massively, providing lucrative rewards to the miscreants who perpetrate these attacks.

 

The world cannot be made completely safe from cybercrime. As the number and range of threats proliferate, being innovative and using the Group's experience and skills to protect against attacks becomes more important than ever. NCC Group is doing this by providing the best security consultants to world leading clients as well as conducting world-renowned security research.

 

Employees

 

The talent, dedication and experience of the people employed by the Group is vital to its success. The motivation and retention of staff remains key for the Group's future. The Group aims to be the employer of choice. It proactively monitors staff retention and manages all aspects of individuals' roles, responsibilities and aspirations.

 

The Group now employs 1857 people across the world, including 206 associates.

 

General Data Protection Regulation and Brexit

 

The current UK data protection regime was due to be modified by new EU regulation, primarily the General Data Protection Regulation ('GDPR'). GDPR will be implemented across the EU by May 2018.

                                                                   

This legislation will enable individuals to gain the right to know when their data has been hacked and companies and organisations will be required to notify the national supervisory authority of serious data breaches as soon as possible.

 

Any breach of the new data protection rules will be punished with fines of up to four per cent of global turnover with the prospect of significant financial fines for non-compliance as an additional incentive to focus minds at Board level.

 

Regardless of when or how the various negotiations develop with the EU, NCC Group strongly believes that the UK should implement similar data protection legislation. Cybercrime is not bound by national borders or political and trade treaties.

 

NCC Group shares the ICO's (Information Commission's Office) practical view that if the UK wants to trade with the Single Market on equal terms UK data protection standards would have to be equivalent to the EU's GDPR.

 

For the UK to do business with the EU, and any other country for that matter, it is vital that data protection standards and legislation is of the highest order.

 

The government's National Cyber Security Strategy for the next five years is due for publication later this year. NCC Group strongly believes that it must have a clear commitment to protect citizens, businesses and public administration more than ever from cyber threats. Crucially it needs to put in place reforms that allow continued European and international trading as well as data protection for both citizens and businesses. It should also address the major challenge concerning a dearth in skills in order to continue the UK's unrivalled expertise in security consulting.

 

Board responsibility

 

Cyber security and the associated risk mitigation should be the Board's responsibility and in particular that of the CEO. All Directors must be fully accountable and a lack of understanding or knowledge is not an acceptable excuse.

 

A recent government cyber survey of FTSE 350 companies indicated that only 33% of boards understood their appetite for cyber risk, so 67% do not. The Group is committed to putting cyber security onto companies' main boards' agendas.

 

Currently companies do not have any responsibility to report on cyber breaches or the costs spent mitigating or remediating after a breach has occurred. Boards fully discuss and become expert on accounting policies, health & safety, CSR and executive remuneration and report on them in detail in their Annual Report and Accounts. This is not the case with a company's most valuable assets, its data and information.

 

While the measure and assessment of cyber risk can be contracted out to third parties, the determination and judgement of what is an acceptable level of risk and what appropriate mitigations can be used to reduce or minimise that risk, cannot be delegated or outsourced.

 

It is no longer acceptable for cyber security to be passed down to an IT director or risk manager. It is the responsibility of the CEO and the main board as it is the most significant issue facing businesses today.

 

No FTSE 350 company currently has a separate Cyber Security Committee that reports to the Board monthly. Most, incorrectly, believe that this responsibility is that of the Audit Committee which usually meet at most, on a quarterly basis.

 

Audit committees do not always have the necessary skill, gravitas, capability or mandate to deal with what is a daily threat. It is also unclear what cyber expertise and know-how a non-executive accountant would bring. Nor is it clear why cyber risk would be managed in a domain where the CEO is not the key member of a committee since it is the biggest risk on his/her watch.

 

A cultural change is needed as the majority of boards do not have executives with the necessary IT skills, let alone an understanding of cyber security. Most board directors who have extensive operational and financial expertise in their industries and the corporate world, have minimal, if any, formal education in IT.

As directors undergo training for anti-bribery or health and safety, they should also undertake training for cyber security, as without it they will not be able to judge or score the threat on the corporate risk register.

 

Assurance Division

 

Information security & security consulting

 

The strategic direction and cultural philosophy of the Assurance Division is about constant evolution and therefore research is key to being successful in the marketplace. Information security and cyber security continue to change at a rapid pace with new areas of concern or vulnerabilities frequently and regularly discovered.

 

To stay ahead in the cyber-arms race, the Group's global corporate culture is aligned with this rapid and constant change. The Group has created boutique ways of working with cultural values that encourage individuals to fulfil their full creative potential.

 

Apart from determining security weaknesses, the Group is also committed to making the Internet a safer place for the world to interact, communicate and transact. While combatting the threat of cyber-crime is a clearly stated objective, so is finding a safe way for the world to navigate, communicate and transact on the Internet.

 

Today, cybercrime is the single biggest threat to businesses and individuals around the world. To put this into perspective, a recent Kaspersky survey stated that the damage from cyber-attacks costs UK business more than £27 billion each year.

 

The average cost to recover from a DDoS attack is £275,000 and more than 90% of businesses have experienced some form of cyber security threat. On average, it takes almost 120 days for an organisation to find out that it has been compromised.

 

In the UK, the public is still largely in the dark about what data of theirs has been compromised or how poor companies are at safeguarding their data. Individuals should have the right to expect their data to be protected to the highest standards and if it is not, they should be made aware of what has happened to it.

 

Furthermore, from the Group's own research into the safety of the Internet, almost two-thirds of consumers believe an online data breach will compromise their financial information within the next year.

 

The fact that some 60% of consumers are more worried than ever before about protecting their personal and financial information online should certainly confirm the threat as the greatest to face business today.

 

Division's strategy and positioning

 

The Division's strategy is to constantly demand the generation of new ideas and initiatives. Not all ideas make it to product development or design but each is critically, technically and commercially appraised before any financial commitment is made.

 

In conjunction with this creativity, the organisation is committed to remaining independent and listening to its clients' requirements as well as looking to supply complementary Group capabilities and services that are currently not supplied.

 

To that end, new product or service lines are reviewed from a make or buy standpoint. Acquisitions are carefully analysed and decisions to acquire Assurance businesses are based upon culture, fit and service but never on the basis of profit enhancement by cost reduction or the ability to turn around an ailing business.

 

Threat intelligence and cryptology is the most recent example of this, where the Group acquired a business, Fox-IT, to directly fill a product and service need and will be rolling its services out to multi-national customers during 2016. Threat intelligence is one of the most important tools in an organisation's armoury to help prevent and mitigate cyber-attack.

The Group has been product agnostic and has avoided being a reseller of third parties' products, software or services, but this can in certain situations compromise the Group's ability to effectively deliver client solutions.

 

The acquisitions of Accumuli and Fox-IT required the Group to ensure that these businesses' channel and product models did not blur the Group's product independence positioning, nor its independent service capabilities.

 

Following a detailed due diligence process, the Group is satisfied that its clients are being supplied the right set of products from a controlled process of recommendation even if the product is not sold by the Group.

 

As one of the worlds' largest service led security consultancies, the Group is capable of leading all bids rather than having to look for support from larger third parties. NCC Group does not provide white label solutions for third parties to resell, nor does it enter into any strategic alliances that compromise the Group's objectivity or independence.

 

Integrity and credibility, alongside technical capability, are the leading cultural values of the Group and the fundamental underpinning of its strategy to innovate, create and make safe. This will ensure the Group remains an independent, unbiased organisation and maintains its place as the trusted provider of choice in the security services marketplace.

 

Since much of the work carried out by the Group is research based, in order to maintain its equitable and ethical disclosure policies, research paid for by third parties and customers is not disclosed, unless requested by the paying organisation.

 

Self-funded research by the Group will always be provided to the organisation that it affects in full, free of charge and without disclosure, until such time as the vulnerability has been resolved in a reasonable timeframe.

 

However, this does not preclude the Group making a full public disclosure if there is a threat to life or to the general public's online security and if the third party is unwilling to remediate or fix the issue.

 

Escrow

 

The Escrow Division remains the foundation of the Group and is the platform upon which the organisation has been built. The fundamentals of the Group are fully encapsulated in this division, which is based around the very highest standards of customer care and the equitable treatment of both customers in the contractual relationship.

 

Escrow offers a high value product for a low, in comparison, investment. Due to its importance to clients, it provides the Group with excellent recurring revenues along with good margins and cash generation.

 

Escrow can be provided both in the traditional software market as well as in all iterations of the outsourced model, as the basic underpinnings are the same, protection from an event that disrupts the relationship between the owner and licensee of a software product.

 

Escrow is also a requirement for all registrars and registries of domains. The Group provides registry data escrow services, where the IP address of each domain registered within a TLD is safely secured along with Registrar Data Escrow particularly to support European customers.

The Escrow business has continued to develop its SaaS service and although not yet a major contributor to profitability, it is a very important tool in providing a complete service for clients as they seek to mitigate risk.

 

This year has been very successful as the team has worked hard to consolidate the positive performances of previous years in both Europe and the US. The performance is underpinned by a stable management team that has driven success from the UK to the rest of the world.

 

The cash flow and profitability of Escrow are reinvested to produce not only better Escrow products and services but also other areas of complementary services across the Group to help clients mitigate their information and cyber security risks.

 

Domain Services

 

Following a strategic review, the Group has decided to withdraw from the Domain Service marketplace and reinvest some of the assets and resources in areas that will provide a more suitable return in the near term.

 

While this will involve the diminution and realisation of assets, the Group is still committed to the concept behind domain services and has retained the ability to provide a secure, managed environment when the marketplace changes, with the objective being to create a safer Internet for all who traverse and use it. The Internet will only survive as a usable vehicle for commerce and industry if there are radical changes to operators' and users' behaviours.

 

It is clear that the open generic domains and city codes have not been taken up by businesses and consumers as well as expected with all of these falling well short of their initial registration targets. Coupled with the fact that the branded domains are still either undelegated or those that are, are unused, it is clear that the market is not ready for the very necessary changes that need to happen to strengthen security on the Internet.

 

As it appears that the process for new applications is unlikely to happen in the near term, so actual use of those newly applied for domains is still years away, the Group has decided to cut its losses at this stage.

 

The Group will maintain and continue to publish the .trust security standards since these are fundamental to a safer Internet regardless and will continue to use .trust as the Group's domain.

 

Financial review

 

Revenue

 

For the financial year ended 31 May 2016, the Group increased revenue by 56% to £209.1m (2015: £133.7m) with the revenue split being H1 45%: H2 55% (2015: H1 47%: H2 53%) between the first and second halves of the year. Organic revenue growth was 19% (2015: 18%).

 

On a constant currency basis, the Group revenue growth would have been 54% (2015: 19%) as both the dollar and euro exchange rates against the pound varied considerably during the year. Due to the natural hedging through the intercompany loans, the impact on the Group's operating profits was minimal. The Group does not hedge against currency fluctuations.

 

In the year, 58% (2015: 54%) of revenue, £122.0m (2015: £72.1m) was derived from the UK. Continental Europe contributed £34.2m (2015: £13.5m) or 16% of Group revenue, with the Rest of the World revenue increasing to £52.9m (2015: £48.1m), some 25% of Group revenue.

 

Assurance accounted for 81% of the Group's revenue (2015: 74%) as it continues to see faster organic growth as well as benefiting from six month's revenue from the newly acquired Fox-IT.

 

Domain Services saw revenues reach £4.9m (2015: £4.7m).  The Group expects to withdraw from the sector by the end of the financial year 2017.

 

The Group's recurring income is significant and has increased. Assurance, benefiting from the acquisition of Fox-IT, saw 94% of its revenues renewed (2015: 83%), representing 61% of all customers (2015: 52%). In addition, 90% (2015: 91%) of the performance monitoring revenues renewed and are recurring.

 

The increasing number of customers that are renewing in Assurance has resulted in renewing Assurance customers' annual expenditure increasing from £73.7k to £83.2k with total average customer spend moving to £51.9k from £53.7k.

 

In Escrow UK nearly 90% of all contracts renewed (2015: 89%).

 

The Group continued to have minimal reliance on any one customer or sector. Within Assurance the largest customer represents 4% of Assurance revenue which is 3% of Group revenue. The largest customer in Escrow is 1% of total Escrow revenue.

 

The majority of revenue for Domain Services came from the withdrawal of the application for .secure and so has not been included in the sector analysis.

 

Top three sectors by Division

Assurance

Finance Sector

38%

 

Software & Computer Services

19%

 

Retail

8%

 

 

 

 

Top three sectors by Division

Escrow

 

Finance Sector

42%

 

Software & Computer Services

20%

 

Telecoms

9%

 

 

Assurance Division

 

Assurance now accounts for 81% (2015: 73%) of Group revenues with total divisional revenues increasing by 74%, 25% organically, to £168.9m (2015: £97.0m).

 

Security consulting revenues grew 87% to £138.9m (2015: £74.4m). Included within this was £14.0m of revenue from Fox-IT for the period December 2015 to the year end.

 

Software Testing and Web Performance revenues grew by 33% to £30.0m (2015: £22.6m) with a recurring revenue of £7.0m within web performance, some 90% (2015: 91%) of customers, which continues its strong track record of client retention.

 

The Assurance division primarily provides expert security assurance and penetration testing, cyber defence operations, incident response and forensics, managed security services and security operations centres as well as risk management and governance. 

 

Fox-IT complements these services and provides a number of them as well as providing threat intelligence services and cryptography based products to clients.

 

Following the integration of Accumuli, the Group's managed scanning service (MSS) offerings have been consolidated so that there is a single client solution. Accumuli has been rebranded NCC Group and the majority of services offered are either security consulting or MSS, although the Group also sells a limited number of security and big data related third party product sales.

Software Testing delivers secure UK based testing to clients. Web performance testing involves continuously monitoring the performance and load capability of organisations' websites. This is a SaaS-based service that relies heavily on a world-class product with the highest levels of customer support.

 

The business unit employs 1323 employees globally (2015: 929) and uses 206 associates (2015: 158).

 

Escrow Division

 

The Group's Escrow business, the cornerstone of NCC Group, produced another very solid year's performance with a substantial margin and very strong cash conversion, as well as a high degree of recurring revenue, due to the consistent contract renewal rates of almost 90%.

 

The Escrow division increased revenue by 10% to £35.3m (2015: £32.0m).

 

Group Escrow recurring revenue renewals, grew to £20.0m (2015: £18.5m). Group Verification revenues grew by 20% in the year to £10.0m (2015: £8.3m).

 

Escrow UK. Escrow UK revenue was £25.7m (2015: £23.7m). This 8% growth in revenue (2015: 5%) was delivered through contract growth and verifications, with only a limited amount coming from the effects of the price increase introduced during the year.

 

Escrow UK recurring revenues increased to £13.7m (2015: £13.2m) and terminations remain below 11%.

 

Escrow Europe and Escrow US. Escrow US revenues grew by 20% to £6.2m (2015: £5.2m) and Escrow Europe revenues grew by 9% to £3.4m (2015: £3.2m).

 

Escrow UK now has 107 employees (2015: 99), Escrow Europe has 15 employees (2015: 14) and the North American Escrow businesses have 59 employees (2015: 32).

 

Domain Services

 

The Division was established in May 2012 in California, but has now been wound down due to the slow take up of the new domains and the lack of awareness of customers and businesses about the changes in the domain world.

 

The division was set up to develop the critical infrastructure and know-how to create a universal environment for end users to operate and navigate the Internet with complete safety and security.

 

In January 2015, the Group acquired Open Registry to provide the technical know-how and software to operate as a secure registry and registrar in order to offer a complete end to end service for all of a client's ICANN related and domain requirements.

 

Domain Services accounted for less than 2% (2015: 4%) of Group revenues.

 

The domain, .trust and associated capital assets valued at £4.2m continue to be used elsewhere in the Group and have not been written down in value. Impairment and other charges for the remainder of the Division are shown in the Exceptional items section below.

 

Profitability and margins

 

As product development, intellectual property and tool development are now such integral parts of the Group, especially following the acquisition of Fox-IT, the impact of amortisation and depreciation has a material effect on NCC Group's financial statements.

 

 

2016

2015

 

£000

£000

Reported profit before tax

9,428

21,421

Amortisation of acquired intangible assets

6,833

2,207

Share based payments

1,191

991

Exceptional items

18,945

588

Unwinding of discount on deferred consideration

621

262

Adjusted profit before tax

37,018

25,469

Net financing costs

1,407

929

Adjusted operating profit

38,425

26,398

Depreciation

3,682

2,623

Amortisation

1,578

515

Group EBITDA

43,685

29,536

 

 

 

Reported operating profit

11,456

22,609

 

Accordingly, in line with many of its peers in the UK and the US, the Board has decided to publish the Group EBITDA (earnings before interest, tax, depreciation, amortisation and exceptional charges).  Group EBITDA is £43.7m (2015: £29.5m), up 48%.

 

NCC Group continues to generate strong margins despite the increased percentage of revenue from the non-escrow businesses and the effects of the Domain Services operational loss.

 

Overall adjusted operating margins remained strong at 18% (2015: 20%). Excluding Domain Services operating margins would have been 19%.

 

Assurance's profitability grew by 52% to £25.8m (2015: £17.0m) and Escrow's by 6% to £20.1m (2015: £18.9m).

 

The Assurance division's margin was 15% (2015: 18%) due to the effects of a full year of NCC Group MSS product sales. This is over one percentage point better than at the half year. The underlying margin will continue to improve, ultimately achieving the division's medium term objective of 20%.

 

The Escrow division's operating margins remained strong at 57% (2015: 59%), almost one percentage point better than in the first half of the year.

 

Adjusted Group operating profit was up by 46% to £38.4m (2015: £26.4m), including a net operational loss of £1.7m (2015: loss £4.9m) in Domain Services. It excludes the amortisation of acquired intangibles, exceptional charges, share-based charges and unwinding of discount on contingent consideration.

 

Adjusted Group pre-tax profit improved by 45% to £37.0m (2015: £25.5m) after an interest charge of £1.4m.

 

The Group's reported pre-tax profit was £10.7m (2015: £21.4m), after the inclusion of the unwinding of the discount on the acquisitions' deferred consideration, amortisation of acquired intangible assets, share based payment charges and the exceptional items.

 

Exceptional items

 

Total Group exceptional charges were £18.9m (2015: £0.6m), of which £0.9m is cash cost in the financial year ended 31 May 2017.

 

As a result of the acquisition of Accumuli in April 2015, the Group, as previously reported, became responsible for paying retention bonuses to a large number of employees and former employees of Accumuli as well as the costs of a fundamental restructure and reorganisation of the company. This resulted in an exceptional charge of £1.7m

 

In November and December 2015, the Group raised £126.3m through a firm placing and a placing and open offer and simultaneously acquired Fox-IT on 27 November 2015 for €133.25m (£93.5m).

 

The costs associated with the fund raising and acquisition were £3.5m, which is comprised of fees of £2.3m and related foreign exchange exposure of £1.2m on the deferred consideration.

 

As a result of the decision to withdraw from the Domain Services market place, the Group has taken a number of one off charges, totalling net £13.7m, of which £0.9m is a cash cost that will be paid in the financial year ending 31 May 2017. These include:

·   The impairment of capitalised assets, the critical infrastructure and know-how to create a universal environment for end users to operate and navigate the Internet with complete safety and security is £6.9m.

·      The net impairment in the goodwill in Open Registry is £5.9m. This includes the £5.9m of deferred consideration that will not be paid as the earnings targets have not been achieved.

·     A further £0.9m for headcount and associated restructuring costs related to winding down the Division.

 

Taxation

 

The Group's effective tax rate is 22% (2015: 22%), which is marginally above the average standard UK rate of 20% (2015: 21%). The higher effective rate reflects the higher tax rates incurred in the overseas businesses.

 

Earnings per share

 

The adjusted basic earnings per share from operations was 11.3p (2015: 9.5p).

 

The table shows the effect on the Group's basic earnings per share of the amortisation of acquired intangibles, share based payment charges, unwinding of the discount on the deferred consideration for acquisitions and the effect of the exceptional items.

 

 

2016

Pence

 

2015 Pence

Basic EPS as per the income statement

2.5

8.0

Amortisation of acquired intangibles

2.1

0.8

Exceptional items

6.1

0.2

Unwinding of the discount on the deferred consideration of the acquisitions

0.2

0.1

Share based payments

0.4

0.4

Adjusted basic EPS

11.3

9.5

 

The adjusted fully diluted earnings per share from continuing operations was 11.2p (2015: 9.4p) whilst reported fully diluted earnings per share was 3.2p (2015: 7.8p).

 

Dividends

 

The Board is recommending a final dividend of 3.15p per ordinary share, making a total for the year of 4.65p. This represents cover of 2.4 times (2015: 2.4 times) based on basic adjusted earnings per share from continuing operations.

 

Since the Group's flotation in July 2004, the dividend has increased from 0.42p to 4.65p, a compound annual growth rate of 25%.

 

Cash

 

The Group continues to be highly cash generative with an operating cash flow before interest and tax of £23.1m (2015: £24.3m), which gives a normalised cash conversion ratio of 107% of operating profit before interest and tax (2015: 107%) after adjusting for exceptional working capital movements associated with acquisition related payments and the non-cash exceptional items in the cash flow.

 

It is expected as the mix of business continues to change due to the increase in Assurance revenues, the percentage will be closer, normally, to 100%.

 

After accounting for net cash inflows of £123.8m from the fund raisings and after the outflows for the acquisitions and contingent acquisition payments, the Group ended the year, as expected, with net debt of £12.7m (2015: £50.6m).

 

In November 2015, the Group increased its banking facilities to £110m (May 2015: £78m) with a new five year multi bank facility, comprising a £80m (May 2015: £78m) revolving credit facility and a £30m (May 2015: nil) five-year term loan and completed a firm placing for £63.1m.

 

In December 2015 a placing and open offer for a further £63.2m was completed.

 

In November 2015, the Group completed the acquisition of Fox-IT for £93.5m (€133.25m) of which £76.6m (€108.3m) was paid on completion.

 

At the year end, contingent payments relate to Fort Consult of £1.8m, which was paid in full in June 2016 and ArmstrongAdams of £1.7m due in August 2016.  A non-contingent amount of £18.5m is due to be paid to Fox IT comprising of €10m in cash and €2.5m shares in November 2016 and November 2017.

 

The deferred payments of £5.9m to Open Registry are now no longer due as the profit targets cannot be achieved.

 

In the financial year to May 2016, due to the refurbishment and opening of new offices, the development of new security products and tools, as well as the roll-out of the new IT solution, the Group spent as planned some £13.5m (2015: £12.9m) on capital expenditure.

 

In the financial year to May 2017, the investment programme capital expenditure is expected to increase to about £18.0m representing the development of the Group's new head office in Manchester and other facilities around the world. Particular consideration is being given to a significant central London facility.

 

Business performance measures

 

The Group manages the business using the Key Performance Indicators shown in the table below. Reporting is daily, weekly and monthly and has different levels of granularity according to each manager's responsibility. The provision of accurate and quickly produced management information has always been integral to the Group.

 

Key Performance Indicators

31 May 2016

31 May 2015

% Change

Group revenue

£209.1m

£133.7m

56%

Group Escrow revenue

£35.3m

£32.0m

10%

Group Assurance revenue

£168.9m

£97.0m

74%

Group Domain Services revenue

£4.9m

£4.7m

5%

Escrow operating profits

£20.1m

£18.9m

6%

Assurance operating profits

£25.8m

£17.0m

52%

Domain Services operating losses

(£1.7m)

(£4.9m)

65%

Corporate overheads

£5.7m

£4.6m

24%

Adjusted operating profits

£38.4m

£26.4m

46%

Group EBITDA

£43.7m

£29.5m

48%

Adjusted profit before tax

£37.0m

£25.5m

45%

Reported profit before tax

£9.4m

£21.4m

(56)%

Adjusted basic earnings per share

11.34p

9.52p

19%

Group Escrow margins

57%

59%

(4)%

Group Assurance margins

15%

18%

(13)%

Escrow termination rates

11%

11%

-%

Group headcount including associates

1857

1388

34%

Assurance headcount  including associates

1529

1087

41%

Escrow headcount

181

145

25%

Domain Services headcount

16

61

(74)%

Net debt

£12.7m

£50.6m

(75)%

Cash conversion ratio

107%

107%

-%

 

 

Consolidated income statement

For the year ended 31 May 2016

 

 

 

 

 

Notes

2016

2015

 

 

£000

£000

 

 

 

 

 

 

 

 

Revenue

2

209,102

133,696

Cost of sales

 

(150,537)

(92,828)

Gross profit

 

58,565

40,868

 

 

 

 

Administrative expenses before amortisation of acquired intangible assets, share based payments and exceptional items

 

(20,140)

(14,473)

Operating profit before amortisation of acquired intangibles, share based payments and exceptional items

 

38,425

26,395

Amortisation of acquired intangible assets

 

(6,833)

(2,207)

Share based payments

 

(1,191)

(991)

Exceptional items

3

(18,945)

(588)

Total administrative expenses

 

(47,109)

(18,259)

 

 

 

 

Operating profit

2

11,456

22,609

 

 

 

 

Financial income

 

5

10

Finance expense excluding unwinding of discount

 

(1,412)

(936)

Net financing costs excluding unwinding of discount

 

(1,407)

(926)

Unwinding of discount relating to consideration on business combinations

 

(621)

(262)

Financial expenses

 

(2,033)

(1,198)

 

 

 

 

Net financing costs

 

(2,028)

(1,188)

 

 

 

 

Profit before taxation

 

9,428

21,421

Taxation

4

(3,145)

(4,633)

Profit for the year

 

6,283

16,788

 

 

 

 

Attributable to equity holders of the parent company

 

6,283

16,788

 

 

 

 

Earnings per share from continuing operations

6

 

 

Basic earnings per share

 

2.5p

8.0p

Diluted earnings per share

 

2.4p

7.8p

 

 

 

 

 

Consolidated Statement of comprehensive income

for the year ended 31 May 2016

 

 

 

 

2016

2015

 

 

 

£000

£000

 

 

 

 

 

Profit for the year

 

 

6,283

16,788

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss (net of tax)

 

 

 

 

 

Foreign exchange translation differences

 

 

9,713

(388)

Total comprehensive income for the year, net of tax

 

 

15,996

16,400

 

 

 

 

 

Attributable to:

 

 

 

 

Equity holders of the parent

 

 

15,996

16,400

 

 

 

 

 

 

Consolidated statement of financial position

at 31 May 2016

 

Notes

2016

2015

 

 

 £000

   £000

  £000

        £000

Non-current assets

 

 

 

 

 

Intangible assets

7

297,277

 

204,936

 

Plant and equipment           

8

12,686

 

9,376

 

Investments

 

608

 

553

 

Deferred tax assets

11

5,285

 

4,318

 

Total non-current assets

 

 

315,856

 

219,183

 

 

 

 

 

 

Current assets

 

 

 

 

 

Trade and other receivables               

9

66,467

 

44,429

 

Inventories

 

334

 

-

 

Cash and cash equivalents

 

20,663

 

16,353

 

Total current assets

 

 

87,464

 

60,782

 

 

 

 

 

 

Total assets

 

 

403,320

 

279,965

 

 

 

 

 

 

Equity

 

 

 

 

 

Issued capital                                        

 

2,759

 

2,293

 

Share premium                                     

 

147,324

 

23,964

 

Merger reserve

 

42,308

 

42,308

 

Reserve for own shares

 

(230)

 

(464)

 

Retained earnings                                

 

62,490

 

65,064

 

Currency translation reserve

 

8,274

 

(1,439)

 

Total equity attributable to equity holders of the parent

 

 

262,925

 

131,726

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Other financial liabilities

14

394

 

392

 

Deferred tax liability

11

15,492

 

10,119

 

Finance leases

 

-

 

64

 

Consideration on acquisitions

10

18,526

 

7,998

 

Interest bearing loans

14

33,395

 

57,155

 

Total non-current liabilities

 

 

67,807

 

75,728

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables                     

12

31,647

 

25,862

 

Interest bearing loans

 

-

 

9,750

 

Consideration on acquisitions

10

3,471

 

1,546

 

Deferred revenue                                  

13

36,313

 

31,861

 

Current tax payable

 

1,157

 

3,492

 

Total current liabilities

 

 

72,588

 

72,511

Total liabilities

 

 

140,395

 

148,239

Total liabilities and equity

 

 

403,320

 

279,965

These financial statements were approved by the Board of Directors on 6 July 2016 and were signed on its behalf by:

 

Rob Cotton

Chief Executive

NCC Group plc

4627044

 

Consolidated statement of cash flows

for the year ended 31 May 2016

 

 

Notes

2016

2015

 

 

£000

£000

Cash flow from operating activities

 

 

 

Profit for the year

 

6,283

16,788

Adjustments for:

 

 

 

Depreciation charge

8

3,682

2,623

Share based charges (net of national insurance contributions)

 

1,135

885

Amortisation of intangible assets

7

8,409

2,723

Net financing costs

 

2,028

1,188

Profit on sale of plant and equipment

 

(148)

(43)

Adjustments to contingent consideration

3

(5,940)

-

Impairment of intangible assets

3

6,858

-

Impairment of goodwill

3

11,877

-

Income tax expense

4

3,145

4,633

Cash inflow for the year before changes in working capital

 

37,329

28,797

Increase in trade and other receivables

 

(15,055)

(511)

Increase/(decrease)in trade and other payables

 

2,860

(4,000)

Exceptional payables

 

(2,049)

-

Cash generated from operating activities before interest and tax

23,085

24,286

Interest paid

 

(2,029)

(1,072)

Income taxes paid

 

(7,291)

(3,417)

Net cash generated from operating activities

 

13,765

19,797

 

 

 

 

Cash flows from investing activities

 

 

 

Interest received

 

5

10

Acquisition of plant and equipment

8

(4,649)

(4,788)

Software and development expenditure

7

(8,863)

(8,175)

Acquisition of businesses

10

(78,427)

(19,831)

Cash acquired with subsidiaries

10

1,769

5,676

Net cash used in investing activities

 

(90,165)

(27,108)

 

 

 

 

Cash flows from financing activities

 

 

 

Purchase of own shares

 

(98)

(414)

Proceeds from the issue of ordinary share capital

 

123,826

429

Draw down of borrowings

 

(33,509)

20,443

Equity dividends paid

 

(10,280)

(7,634)

Net cash used in financing activities

 

79,939

12,824

 

 

 

 

Net increase in cash and cash equivalents

 

3,539

5,513

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

16,353

11,212

Effect of foreign currency

 

771

9

(372)

Cash and cash equivalents at end of year

 

20,663

16,353

 

 

 

 

 

Statements of changes of equity

for the year ended 31 May 2016

 

Group

 

Issued

Share

 capital

 

Share

 Premium

 

Merger

Reserve

Currency

Translation

reserve

Reserve

for own

shares

 

Retained

earnings

 

 

Total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 1 June 2014

2,085

23,634

-

(1,051)

(1,075)

56,003

79,596

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

16,788

16,788

Foreign currency translation differences

-

-

 

-

(388)

 

-

 

-

 

(388)

Total comprehensive income for the year

-

-

-

(388)

-

16,788

16,400

 

 

 

 

 

 

 

 

Transactions with owners recorded directly in equity

 

 

 

 

 

 

 

Dividends to equity shareholders

-

-

-

-

-

(7,634)

(7,634)

Share based payment transactions

-

-

-

-

-

885

885

Current and deferred tax on share based payments

-

-

-

-

-

47

47

Shares issued

208

330

42,308

-

-

-

42,846

Purchase of own shares

-

-

-

-

611

(1,025)

(414)

Total contributions by and distributions to owners

208

330

42,308

-

611

(7,727)

35,730

 

 

 

 

 

 

 

 

Balance at 31 May 2015

2,293

23,964

42,308

(1,439)

(464)

65,064

131,726

 

 

 

 

 

 

 

 

 

 

Issued

Share

capital

 

Share

 Premium

 

Merger

Reserve

Currency

Translation

reserve

Reserve

for own

shares

 

Retained

 earnings

 

 

Total

 

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

Balance at 1 June 2015

2,293

23,964

42,308

(1,439)

(464)

65,064

131,726

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

-

6,283

6,283

Foreign currency translation differences

-

-

 

-

9,713

 

-

 

-

 

9,713

Total comprehensive income for the year

-

-

-

9,713

-

6,283

15,996

 

 

 

 

 

 

 

 

Transactions with owners recorded directly in equity

 

 

 

 

 

 

 

Dividends to equity shareholders

-

-

-

-

-

(10,280)

(10,280)

Share based payment transactions

-

-

-

-

-

1,135

1,135

Current and deferred tax on share based payments

-

-

-

-

-

620

620

Shares issued

466

123,360

-

-

-

-

123,826

Purchase of own shares

-

-

-

-

234

(332)

(98)

Total contributions by and distributions to owners

466

123,360

-

-

234

(8,857)

115,203

 

 

 

 

 

 

 

 

Balance at 31 May 2016

2,759

147,324

42,308

8,274

(230)

62,490

262,925

 

 

 

 

 

 

 

 

                 

 

 

Notes

(forming part of the financial statements)

 

1          Accounting policies

 

Basis of preparation

NCC Group plc ("the Company") is a company incorporated in the UK. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The parent company financial statements present information about the Company as a separate entity and not about the Group.

 

These financial statements have been approved for issue by the Board of Directors on 6 July 2016.

The financial information set out herein does not constitute the Company's statutory financial statements for the year ended 31 May 2016 or the year ended 31 May 2015 but is derived from those financial statements. Statutory financial statements for 2015 have been delivered to the Registrar of Companies, and those for 2016 will be delivered in due course. The auditors have reported on those statutory financial statements; their report was (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain statements under sections 498(2) or 498(3) of the Companies Act 2006.

 

In accordance with EU law (IAS Regulation EC 1606/2002), the group financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') adopted for use in the EU as at 31 May 2016 ('adopted IFRS'), International Financial Reporting Interpretations Committee ('IFRIC') interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The preliminary results consolidate those of the Company and its subsidiaries.

 

The Group financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use within the European Union and in accordance with the accounting policies included in the Annual Report for the year ended 31 May 2015. A number of new standards and amendments to existing standards were effective for the financial year ended 31 May 2016. None of these have had a material impact. A number of standards, amendments and interpretations have been issued and endorsed by the EU, but which are not yet effective and accordingly the Group has not yet adopted. The cumulative impact of the adoption of these standards is not expected to significant.

 

Going concern

The Group funds its strategic acquisitions and meets its day to day working capital requirements via a multi-currency revolving credit facility of £80m, a £30m multi-currency term loan and an overdraft of £5m. At 31 May 2016, the amount drawn down under the facilities was £33.3m. This facility was agreed in November 2015 and is due for renewal in November 2020.

 

The Directors have reviewed the trading and cashflow forecasts of the Group as part of their going concern assessment and have taken into account reasonable downside sensitivities which reflect uncertainties in the current operating environment. The possible changes in trading performance show that the Group is able to operate within the level of the banking facilities and as a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. After making enquiries, the Directors have a reasonable expectation that the company and the Group have adequate resources to continue in operational existence for the foreseeable future.

 

Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

 

2          Segmental information

 

The Group is organised into three operating segments (2015: three) Escrow, Assurance and Domain Services each of which is separately reported. While revenue and profitability are monitored by individual business units within these operational segments it is only at the operating level that resource allocation decisions are made. Performance is measured based on segment profit, which comprises segment operating profit excluding amortisation of intangible assets, share based payment charges and exceptional items. Interest and tax are not allocated to business segments and there are no intra-segment sales.

 

 

2016

£000

2015

£000

Revenue by business segment

 

 

Escrow UK

25,680

23,729

Escrow Europe

3,434

3,152

Escrow US

6,187

5,151

Group Escrow

35,301

32,032

 

 

 

Security Consulting

138,903

74,381

Software Testing and Web Performance

29,963

22,582

Assurance

168,866

96,963

Domain Services

4,935

4,701

Total revenue

209,102

133,696

 

 

 

All revenue is in relation to services provided.

 

 

2016

£000

2015

£000

Operating profit by business segment

 

 

Group Escrow

20,064

18,891

Assurance

25,762

16,990

Domain services

(1,712)

(4,913)

Segment operating profit

44,114

30,968

Head office costs

(5,689)

(4,573)

Operating profit before amortisation of acquired intangibles, charges for share based payments and exceptional items

38,425

26,395

Amortisation of acquired intangible assets Group Escrow

(732)

(722)

Amortisation of acquired intangible assets Assurance

(5,599)

(1,257)

Amortisation of acquired intangible assets Domain Services

(502)

(228)

Share based payments

(1,191)

(991)

Operating profit before exceptional items

30,401

23,197

Exceptional items

(18,945)

(588)

Operating profit

11,456

22,609

 

There are no customer contracts which account for more than 10% of segment revenue. Exceptional items include goodwill impairment of £11,877,000 attributable to the Domain Services segment, note 3.

 

 

2016

£000

2015

£000

Revenue by geographical destination

 

 

UK

122,014

72,121

Rest of Europe

34,242

13,503

Rest of the World

52,846

48,072

Total revenue

209,102

133,696

 

 

3          Exceptional items

 

The Group identifies separately items as "exceptional". These are items which in management's judgement, need to be disclosed by virtue of their size or incidence in order for the user to obtain a proper understanding of the financial information. Subsequent revisions of estimates for items initially recognised as exceptional provisions are recorded as exceptional items in the year that the revision is made.

 

 

2016

£000

  2015

£000

Operating exceptional items

 

 

Acquisition related costs

 (2,295)

(2,387)

Adjustment to deferred and contingent consideration

4,712

-

Goodwill impairment

(11,877)

-

Intangible asset write down

(6,858)

-

Restructuring costs

(2,627)

-

IT claim net income

-

1,799

Total

(18,945)

(588)

 

In November and December 2015, the Group raised £126.3m through a firm placing and a placing and open offer, part of which was used to fund the initial cash consideration to acquire Fox-IT Holdings B.V. The costs associated with the fund raising and acquisition were £2,295,000.

 

Following a strategic review, the Group decided in June 2016 to withdraw from the Domain Services market place, the Group has taken a number of one off charges, totalling net £13,709,000. These include:

 

·   The write down of capitalised assets, the critical infrastructure and know-how to create a universal environment for end users to operate and navigate the Internet with complete safety and security is £6,858,000.

·    The impairment of goodwill in Open Registry of £11,877,000.

·    A credit of £5,940,000 in respect of contingent consideration that will not be paid as the earnings targets have not been achieved.

·   A charge of £914,000 for headcount and associated restructuring costs related to winding down the Division.

As a result of the acquisition of Accumuli in April 2015 the Group, as previously reported became responsible for paying retention bonuses to a large number of employees and former employees of Accumuli as well as the costs of a fundamental restructure and reorganisation of the company. This resulted in an exceptional charge of £1,713,000.

 

During last year, the Group received a settlement of £2,000,000 in respect of a claim to recover costs incurred on an IT system termination in May 2012. Associated legal costs amounting to £201,000 were incurred in that financial year. In addition, acquisition costs in respect of the acquisition of Open Registry and Accumuli totalling £2,387,000 were included as exceptional charges in the prior year.

The tax effect in the income statement relating to the exceptional items recognised is:

 

 

2016

£000

  2015

£000

Exceptional items and acquisition related costs

 

 

Acquisition related costs

(160)

(497)

Revision to estimates of contingent consideration

-

-

Goodwill impairment

-

-

Intangible asset write down

(2,289)

-

Restructuring costs

(640)

-

IT claim net income

-

375

Total

(3,089)

(122)

 

4          Taxation

 

Recognised in the income statement

 

 

2016

2015

 

 

£000

£000

Current tax expense

 

 

 

Current year

 

4,374

4,408

Adjustment to tax expense in respect of prior periods

 

(478)

(1,366)

Foreign tax

 

839

591

Total current tax

 

4,735

3,633

Deferred tax (note 17)

 

(1,590)

1,000

 

 

 

 

Tax in income statement

 

3,145

4,633

 

Reconciliation of effective tax rate

 

 

2016

2015

 

 

£000

£000

 

 

 

 

Profit before taxation

 

9,428

21,421

Current tax using the UK corporation tax rate of 20% (2015: 20.83%)

 

1,885

4,462

 

 

 

 

Effects of:

 

 

 

Items not taxable for tax purposes

 

2,005

755   

Adjustment to tax charge in respect of prior periods

(187)

(628)

Differences between overseas tax rates

(536)

9

Movements in temporary differences not recognised

31

58

Effect of rate change

(53)

(23)

Total tax expense

3,145

4,633

         

 

Current and deferred tax recognised directly in equity was a credit of £619,000 (2015: charge of £47,000).

 

The UK Government has announced that it intends to reduce the rate of corporation tax to 17% with effect from 1 April 2020.  As this legislation was not substantively enacted as at year end the impact of the anticipated rate change is not reflected in the tax provisions reported in these accounts.  Finance Act 2015 (No.2), which was substantively enacted in October 2015, included provisions to reduce the rate of corporation tax to 19% with effect from 1 April 2017 and 18% from 1 April 2020. Accordingly, the UK deferred tax balances have been revalued to the rate of 19% in these accounts which has resulted in a credit to the profit & loss account of £53,000 and a debit to reserves of £11,000.  To the extent that the deferred tax reverses after 1 April 2020 then the impact on the net deferred tax liability will be increased.

 

5          Dividends

 

2016

£000

2015

£000

Dividends paid and recognised in the year

10,280

7,634

Dividends proposed but not recognised in the year

8,692

6,147

 

 

 

Dividends per share paid and recognised in the year

4.18p

3.66p

Dividends per share proposed but not recognised in the year

3.15p

2.68p

 

6          Earnings per share

 

The calculation of earnings per share is based on the following:

 

2016

2016

2015

2015

 

£000

£000

£000

£000

Profit for the year from continuing operations used for basic and diluted earnings per share

 

6,283

 

16,788

Amortisation of acquired intangible assets

6,833

 

2,207

 

Exceptional items (note 3)

18,945

 

588

 

Unwinding of discount (note 6)

621

 

262

 

Share based payments (note 22)

1,191

 

991

 

Tax arising on the above items

(4,854)

 

(818)

 

 

 

22,736

 

3,230

Adjusted profit from continuing operations used for adjusted earnings per share

 

29,019

 

20,018

 

 

Number of shares

 

Number of shares

 

 

000s

 

000s

Basic weighted average number of shares in issue

 

254,625

 

210,421

Dilutive effect of share options

 

3,459

 

3,601

Diluted weighted average shares in issue

 

258,084

 

214,022

 

The average market value of the Company's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding.

 

7          Intangible assets - Group

 

 

 

Software

 

Development costs

Customer  contracts and relationships

Goodwill

Total

 

£000

£000

£000

£000

£000

Cost:

 

 

 

 

 

 

At 1 June 2014

12,943

4,974

23,018

91,651

132,586

Acquisitions through business combinations

340

-

24,581

62,680

87,601

Additions - internally developed

5,075

3,100

-

-

8,175

Effects of movements in exchange rates

-

667

257

1,189

2,113

At 31 May 2015

18,358

8,741

47,856

155,520

230,475

Acquisitions through business combinations

1,706

-

25,393

72,915

100,014

Additions - internally developed

6,944

1,919

-

-

8,863

Costs write down (note 3)

-

(6,858)

-

-

(6,858)

Effects of movements in exchange rates

(18)

390

2,958

7,705

11,035

At 31 May 2016

26,990

4,192

76,207

236,140

343,529

 

 

 

 

 

 

 

Accumulated amortisation and impairment losses:

 

 

At 1 June 2014

7,156

-

15,366

-

22,522

Charge for year

516

-

2,207

-

2,723

Effects of movements in exchange rates

-

-

294

-

294

At 31 May 2015

7,672

-

17,867

-

25,539

Charge for year

1,576

-

6,833

-

8,409

Impairment charge

-

-

-

11,877

11,877

Effects of movements in exchange rates

-

-

427

-

427

At 31 May 2016

9,248

-

25,127

11,877

46,252

 

 

 

 

 

 

Net book value:

 

 

 

 

 

At 31 May 2016

17,742

4,192

51,080

224,263

297,277

At 31 May 2015

10,686

8,741

29,989

155,520

204,936

 

Management have used business forecasts in determining the recoverability of the asset value of software and development costs relating to the creation of new products and services. The remaining useful economic life of customer contracts and relationships is between 2 and 10 years.

 

For the purpose of impairment testing, goodwill has been allocated to the Group's three operating divisions, which are also operating segments, as these represent the lowest level at which goodwill is monitored for internal management purposes.

 

Goodwill considered significant in comparison to the Group's total carrying amount of such assets has been allocated to cash generating units for the purposes of impairment testing as follows:

 

 

          Goodwill

 

2016

2015

Cash generating units

£000

£000

Escrow UK

21,177

21,177

Escrow Europe

6,368

6,046

Escrow USA

7,315

6,990

Total Group Escrow

34,860

34,213

Assurance USA

European Security Services

24,641

164,762

23,553

87,135

Assurance Testing

189,403

110,688

Domain Services

-

10,619

Total

224,263

155,520

 

 

 

 

       

 

When assessing impairment, the recoverable amount of each CGU is based on value in use calculations. These calculations require the use of estimates, specifically, pre-tax cash flow projections, long-term growth rates, and a pre-tax market discount rate.

 

Cash flow projections are based on the Group's detailed annual operating plan for the forthcoming financial year with assumptions applied for expected revenue growth and gross margins to forecast years two to three. The judgement on these assumptions is based on management's past experience of growth and knowledge of the industry sectors and markets. The projections beyond three years are forecast using an estimated long-term growth rate of 2.5% (2015: 2.5%) which represents management's best estimate of a long term annual growth rate in EBITDA. A different set of assumptions may be more appropriate in future years dependent on changes to the macro-economic environment.

 

The discount rates used are based on management's calculation of the weighted average cost of capital using the capital asset pricing model to calculate the cost of equity. Specific rates are used for each CGU sector in the value in use calculation and the rates reflect management's assessment on the level of relative risk in each CGU. The discount rate has been calculated to reflect the latest market assumptions for the risk-free rate, the Equity Risk Premium and the net cost of debt. The pre-tax discount rates used in the value in use calculations are:

 

 

         

Pre-tax discount rates

2016

2015

Cash generating units

%age

%age

Escrow UK

10.1

10.1

Escrow Europe

10.7

10.8

Escrow USA

12.9

12.7

Assurance USA

European Security Services

15.0

11.2

12.5

10.2

Domain Services

10.6

n/a

 

 

 

 

       

The Directors do not believe that a reasonably possible change of assumptions would cause the recoverable amounts to fall below book value for any of the cash generating units due to the significant levels of headroom, with the exception of Domain Services.

 

The Domain Services CGU value in use calculation, based on conservative forecasts of future growth, resulted in a value significantly below the carrying value of the CGU net operating assets at 31 May 2016 and the Directors have concluded that the goodwill is fully impaired. The business forecasts are below the initial expectations due to the slow market development for the use of domain names. Accordingly, the goodwill balance of £11,877,000 has been fully impaired and the impairment charge is included in exceptional items in the income statement (note 3). For sensitivity, based on a change in discount rate of 1%, this would impact the discounted future cash flows by £0.3m, and a 10% change in forecast profits would have an impact of less than £0.1m.

 

During the year, the Group acquired Fox-IT Holding B.V., a group of companies based in the Netherlands with a principal activity of delivering cybersecurity and assurance services to customers. The goodwill of Fox-IT Holdings B.V. has been included in the European Security Services CGU for the purpose of annual impairment testing.

 

8          Plant and equipment - Group

 

 

Computer equipment

Plant and equipment

Fixtures and fittings

Motor vehicles

 

Total

 

£000

£000

£000

£000

£000

Cost:

 

 

 

 

 

At 1 June 2014

11,849

409

6,695

378

19,331

Additions

2,000

-

2,629

159

4,788

Acquired as part of business combination

545

-

53

-

598

Disposals

-

-

-

(181)

(181)

Movement in foreign exchange rates

194

5

322

10

531

At 31 May 2015

14,588

414

9,699

366

25,067

Additions

3,223

-

1,333

93

4,649

Acquired as part of business combination

914

-

984

-

1,898

Disposals

(314)

-

-

-

(314)

Movement in foreign exchange rates

154

-

214

12

380

At 31 May 2016

18,565

414

12,230

471

31,680

 

 

 

 

 

 

Depreciation:

 

 

 

 

 

At 1 June 2014

9,651

409

2,872

155

13,087

Charge for year

1,566

-

986

71

2,623

Disposals

-

-

-

(139)

(139)

Movement in foreign exchange rates

47

5

66

2

120

At 31 May 2015

11,264

414

3,924

89

15,691

Charge for year

1,946

-

1,685

51

3,682

Disposals

(166)

-

-

-

(166)

Movement in foreign exchange rates

(109)

-

(100)

(4)

(213)

At 31 May 2016

12,935

414

5,509

136

18,994

 

 

 

 

 

 

Net book value:

 

 

 

 

 

At 31 May 2016

5,630

-

6,721

335

12,686

At 31 May 2015

3,324

-

5,775

277

9,376

 

The company has no plant and equipment.

 

9          Trade and other receivables

 

 

Group

Group

Company

Company

 

2016

2015

2016

2015

 

£000

£000

£000

£000

 

 

 

 

 

Trade receivables

39,410

26,002

-

-

Prepayments and accrued income

27,057

18,427

-

-

Amounts owed by group undertakings

-

-

130,245

8,741

 

66,467

44,429

130,245

8,741

 

10         Acquisitions

 

Fox-IT Holdings BV

 

NCC Group (Solutions) Limited acquired Fox-IT Holdings BV, a company based in the Netherlands, on 27 November 2015. Fox-IT has a leading market position in Europe for high-end Cyber Security solutions and is a leading European provider of Advanced Incident Response Services. Fox-IT's activities of Advanced Threat Protection, Threat Intelligence and Web/Mobile Event Analytics, High Assurance and Secure Infrastructure, provide further depth to NCC Group's cyber and assurance services and growth opportunities from new markets.

 

The consideration for the acquisition of Fox-IT was €108,250,000 initial cash, with deferred payments due on each of the first and second anniversaries of completion comprising: €10,000,000 cash and €2,500,000 newly issued NCC Group plc shares each.

 

The acquisition had the following effect on the Group's assets and liabilities:

 

 

 

 

Fair values

Acquiree's identifiable net assets at the acquisition date:

 

£'000

£'000

 

 

 

 

Plant and equipment

 

 

1,898

Intangible assets - development

 

 

1,706

Intangible assets - acquired

 

 

25,393

Trade and other receivables

 

 

7,295

Inventory

 

 

370

Deferred tax liability

 

 

(5,972)

Cash

 

 

1,769

Creditors & accruals

 

 

(7,463)

Deferred revenue

 

 

(2,071)

Net identifiable assets

 

 

22,925

Goodwill on acquisition

 

 

70,931

Total consideration

 

 

93,856

Satisfied by: Initial cash consideration

 

76,583

 

                      Deferred cash consideration

 

14,439

 

                      Deferred issue of equity shares consideration

 

3,610

 

                      Finance discount on deferred consideration

 

(776)

 

 

 

93,856

 

Net cash outflow

 

 

76,583

Cash acquired

 

 

(1,769)

Net cash outflow excluding cash acquired

 

 

74,814

 

The fair value of trade and other receivables represents £7,511,000 of gross contractual receivables and a provision for doubtful debts of £216,000.

 

The goodwill of £70.9m represents the value expected to be generated from cross-selling Fox-IT products and services to existing group customers, sales growth from new customers in wider geographic markets and from future product development using the knowledge and expertise of the Fox-IT technical team. The goodwill is not expected to be deductible for tax purposes. Acquisition costs relating to professional fees totalling £1.9m were incurred and are recognised as exceptional costs in the income statement account (note 3).

 

The Group' consolidated income statement includes six month's post acquisition trading, with Fox-IT contributing £14.0m revenue and £1.3m operating profit. The combined results of NCC Group and Fox-IT B.V. for the twelve month period ending 31 May 2016 are revenue of £218.2m and pre-exceptional operating profit of £30.5m.

 

Accumuli plc

 

On 30 April 2015, the Group acquired 100% of the share capital of Accumuli plc for consideration of £52.5m in a share for share exchange plus cash consideration agreement. NCC Group plc issued 20,389,472 new ordinary shares of 1 pence with a closing share price of 208.5p amounting to a share issue valuation of £42.5m. £10.0m cash consideration was paid on a pro-rata basis to the Accumuli shareholders under the Scheme Arrangement.

 

Accumuli is a leading, rapidly growing, UK based independent specialist in IT security and risk management, providing industry leading solutions and services. The group's business activities are in the Assurance business segment. Prior to the acquisition, Accumuli was a public company quoted on the AIM market of the London Stock Exchange.

 

The acquisition had the following effect on the Group's assets and liabilities:

 

 

 

 

Fair values

 

 

£000

£000

Acquiree's identifiable net assets at the acquisition date:

 

 

Plant and equipment

 

 

487

Investments

 

 

553

Trade and other receivables

 

 

8,418

Stock

 

 

36

Deferred costs

 

 

3,279

Cash

 

 

3,980

Creditors & accruals

 

 

(9,298)

Other creditors

 

 

(4,413)

Deferred revenue

 

 

(9,486)

Current tax liability

 

 

(50)

Deferred tax liability

 

 

(3,501)

Bank loan

 

 

(9,750)

Intangible assets acquired

 

 

20,668

Net identifiable assets

 

 

923

Goodwill on acquisition

 

 

51,583

Total consideration

 

 

52,506

Satisfied by: Issue of new 1p ordinary shares

 

42,512

 

                    Cash consideration

 

9,994

 

 

 

52,506

 

Net cash outflow

 

 

9,994

Cash acquired

 

 

(3,980)

Net cash outflow excluding cash acquired

 

 

6,014

 

The goodwill represents the profitable sales growth expected from the cross-selling opportunities using shared product knowledge, expertise, and customer markets, the value of the workforce's industry knowledge and technical skills, and some central cost saving synergy. In the financial year to 31 May 2016, the goodwill value has increased by £1,368,000. This represents a £1,100,000 increase in contingent consideration liability for an acquisition previously made by Accumuli plc and a £268,000 adjustment to the fair value of Accumuli plc's acquired balance sheet relating to additional working capital liabilities and provisions. The goodwill is not expected to be deductible for tax purposes.

 

Open Registry Group

 

On 20 January 2015, the Group acquired the entire share capital of Open Registry S.A (Luxembourg), CHIP S.A. (Luxembourg), Nexperteam C.V.B.A (Belgium) and Sensirius C.V.B.A (Belgium) for total consideration of €19.5m. Of this amount, €10.1m was paid in cash immediately and €0.2m was paid as a retention in June 2015. Additionally, the acquisition agreement provided for contingent consideration of €9.2m payable in cash depending on specific profit based performance targets on the second and third year anniversaries of the completion date.

 

Open Registry S.A.(Open Registry) is the leading European Registry Service Provider for global brands. Clearinghouse for Intellectual Property S.A. (CHIP) is one of three key service providers that form the consortium that has been authorised by ICANN to operate the Trademark Clearinghouse (TMCH). Nexperteam CVBA (Nexperteam) is an accredited registrar for several TLDs managing over 8,000 domain names. The Company provides domain registrar services ranging from domain name registration, name serving to email and web hosting. 

 

The goodwill on acquisition represented the expected future customer growth in the Domain Name Registry and TMCH services, incremental revenue from cross-selling opportunities with NCC Group's developing domain services activity, and the value of the workforce's industry knowledge and technical skills.

 

The acquisition had the following effect on the Group's assets and liabilities:

 

 

 

 

Fair values

 

 

£000

£000

Acquiree's identifiable net assets at the acquisition date:

 

 

 

Plant and equipment

 

 

111

Intangible assets

 

 

209

Investments

 

 

34

Trade and other receivables

 

 

3,494

Cash

 

 

1,696

Creditors & accruals

 

 

(1,814)

Deferred revenue

 

 

(4,129)

Current tax liability

 

 

(14)

Deferred tax liability

 

 

(1,213)

Intangible assets acquired

 

 

4,044

Net identifiable assets

 

 

2,418

Goodwill on acquisition

 

 

11,097

Total consideration

 

 

13,515

Satisfied by: Initial cash consideration

 

7,577

 

                    Contingent consideration (discounted)

 

5,938

 

 

 

13,515

 

Net cash outflow

 

 

7,577

Cash acquired

 

 

(1,696)

Net cash outflow excluding cash acquired

 

 

5,881

 

The Directors performed an annual goodwill impairment assessment on 31 May 2016 and re-assessed the fair value of the contingent consideration using the latest business forecasts. Resulting from these reviews, the £11.9m carrying values of goodwill (note 7) and contingent consideration of £5.9m have been written off to the income statement as exceptional items (note 3).

 

The balances presented below are valued at the fair value of amounts payable for deferred and contingent consideration on acquisitions. The contingent consideration is stated at the maximum amount payable.

 

 

 

2016

 

2015

Contingent consideration

 

 

£000

£000

 

 

 

 

 

FortConsult A/S

 

1,807

1,640

Open Registry Group

 

-

5,794

Eqalis Limited

 

-

810

ArmstrongAdams Limited

 

1,664

1,300

 

 

3,471

9,544

 

 

 

2016

 

2015

Deferred consideration

 

 

£000

£000

Fox-IT B.V.

 

18,526

-

 

 

18,526

-

 

11         Deferred tax assets and liabilities

 

Group

 

Recognised deferred tax assets and liabilities are attributable to the following:

 

 

Assets

Liabilities

Net

 

2016

2015

2016

2015

2016

2015 

 

£000

£000

£000

£000

£000

£000

Plant and equipment

-

-

(2,230)

(426)

(2,230)

(426)

Short term temporary differences

1,738

520

-

-

1,738

520

Intangible assets

-

-

(13,262)

(9,693)

(13,262)

(9,693)

Share based payments

842

493

-

-

842

493

Tax losses

2,705

3,305

-

-

2,705

3,305

Deferred tax asset/(liability)

5,285

4,318

(15,492)

(10,119)

(10,207)

(5,801)

 

Movement in deferred tax during the year:

 

 

1 June 2015

Recognised

in income

Exchange differences

Recognised

in equity

 

Acquisitions

31 May 2016

 

£000

£000

£000

£000

£000

£000

Plant and equipment

(426)

(1,804)

-

-

-

(2,230)

Short term temporary differences

520

814

28

-

376

1,738

Intangible assets

(9,693)

3,303

(524)

-

(6,348)

(13,262)

Share based payments

493

(123)

-

472

-

842

Tax losses

3,305

(600)

-

-

-

2,705

 

(5,801)

1,590

(496)

472

(5,972)

(10,207)

 

 

 

1 June 2014

Recognised

in income

Exchange differences

Recognised

in equity

 

Acquisitions

31 May 2015

 

£000

£000

£000

£000

£000

£000

Plant and equipment

(4)

(337)

(53)

-

(32)

(426)

Short term temporary differences

178

201

12

-

129

520

Intangible assets

(2,440)

(1,837)

(69)

-

(5,347)

(9,693)

Share based payments

579

(67)

-

(19)

-

493

Tax losses

1,542

1,040

187

-

536

3,305

 

(145)

(1,000)

77

(19)

(4,714)

(5,801)

 

The Company has no deferred tax assets or liabilities (2015: £nil).

 

The Group have recognised a deferred tax asset of £2,705,000 (2015: £3,305,000) on tax losses as management consider it probable that future taxable profits will be available against which they can be recognised. The Group have not recognised a deferred tax asset on £5,679,000 (2015: £6,218,000) of tax losses carried forward due to uncertainties over recovery.

 

Included in recognised and unrecognised tax losses are losses of £2,021,000 that will expire in 2034, £3,522,000 that will expire in 2034. Other losses may be carried forward indefinitely.

 

No deferred tax liability is recognised on temporary differences of £243,000 (2015: £359,000) relating to the unremitted earnings of overseas subsidiaries as the Group  is able to control the timing of the reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future.

 

12         Trade and other payables

 

Group

Group

Company

Company

 

2016

2015

2016

2015

 

£000

£000

£000

£000

 

 

 

 

 

Trade payables

7,906

9,039

-

-

Contingent consideration on acquisitions

3,471

1,546

-

-

Non trade payables

7,560

3,589

-

-

Finance lease

38

111

-

-

Accruals

16,143

13,123

-

-

Intercompany payables

-

-

10,642

11,490

 

35,118

27,408

10,642

11,490

 

13         Deferred revenue

 

Group

Group

Company

Company

 

2016

2015

2016

2015

 

£000

£000

£000

£000

 

 

 

 

 

Deferred revenue

36,313

31,861

-

-

 

36,313

31,861

-

-

 

Deferred revenue consists of: Escrow agreements £13,209,000 (2015: £12,954,000), Assurance contracts £17,084,000 (2015: £11,968,000), Website monitoring and load testing agreements of £3,397,000 (2015: £3,348,000) and Domain services contracts of £2,623,000 (2015: £3,591,000). The revenue has been deferred to be released to the income statement over the contract term in accordance with the Group's accounting policy. The balances relating to the acquisitions of Fox-IT are included in the Assurance division.

 

14         Non-current liabilities

 

Group

Group

Company

Company

 

2016

2015

2016

2015

 

£000

£000

£000

£000

 

 

 

 

 

Secured bank loan

33,395

57,240

-

-

Issue costs

-

(244)

-

-

Amortisation of issue costs

-

159

-

-

Interest bearing loans

 

33,395

57,155

-

-

Deferred tax (note 17)

15,492

10,119

-

-

Deferred consideration                                                             on acquisitions (note 6)

18,526

7,998

-

-

Finance leases

-

64

-

-

Other financial liabilities

394

392

-

-

Total non-current liabilities

67,807

75,728

 

-

-

 

Other financial liabilities of £394,000 relates to the balance of a rent-free period (2015: £392,000) which is released to the income statement over the term of the lease.

 

Finance lease maturity

Group

2016

Group

2015

Company

2016

Company

2015

 

£000

£000

£000

£000

Within one year or less

38

111

-

-

Between one and five years

-

64

-

-

 

38

175

-

-

 

The finance leases relate to IT equipment.

 

15         Related party transactions

 

The Group's key management personnel comprise the Directors of the Group. The Group and Company's transactions with those Directors are disclosed in the Directors' Remuneration Report.

 

During the year corporate finance fees of £750,000 (2015: £748,000) and professional fees for services of Paul Mitchell of £37,500 (2015: £75,000) as Non-Executive Chairman were paid to Rickitt Mitchell & Partners Ltd. Paul Mitchell is Non-Executive Chairman of both the Group and Rickitt Mitchell & Partners Ltd.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR BLGDRCSGBGLL

Companies

NCC Group (NCC)
UK 100

Latest directors dealings