logo-loader

NCC Group's shares drop 25% as it warns again on Assurance arm, starts strategic review

Published: 12:08 22 Feb 2017 GMT

Cyber software
The group now expects its full-year adjusted underlying earnings to be around 20% lower than previous forecasts

Just over two months after saying its remains confident on the future prospects for  its Assurance division, cyber security and risk mitigation software provider NCC Group PLC (LON:NCC) today warned on trading at the arm and instigated a strategic review, sending its shares almost 25% lower.

In an update, NCC said trading in its Assurance arm in the year to the end of May will be "significantly lower"  than it had previously anticipated.

The group said it said now expects its full-year adjusted underlying earnings (EBITDA) to be around 20% lower than the £45.5mln to £47.5mln range it provided in December, which had already been downgraded once before.

The firm had warned over problems with four contracts in a trading update in October, and confirmed in December that its earnings would not be able to make up the lost ground.

NCC today said that third-quarter sales growth for the Assurance arm has been lower than anticipated, both for Security Consulting and Software Testing work, and for its Web Performance unit.

It added that the reduction in expected sales and profitability in the quarter has been seen in the UK, mainland Europe and North America.

Despite the Assurance arm wores, the group said its Escrow Division continues to perform in line with expectations.

Strategy review …

NCC said, in light of the deterioration in trading in the Assurance Division its board is initiating a comprehensive review of  group operating strategy, including a probe of all of the Assurance businesses, how they operate and how they sell.

The firm said it “continues to firmly believe that the Assurance Division has significant growth prospects which it is determined to capture once the Group has reviewed its existing strategy and operations.”

Back in December, NCC’s chief executive Rob Cotton had said: “The long-term outlook for our Assurance business is unchanged and we remain confident in the future prospects for both of our divisions.”

NCC said it expects to update the market on its review no later than its full-year results, due to be announced in July 201, but in the meantime has cancelled a Capital Markets day scheduled for tomorrow, February 22.

In lunchtime trading, NCC shares had dropped 24%, or 30.5p lower to 96p.

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

1 hour, 3 minutes ago