Shares in NCC Group PLC (LSE:NCC) fell 2% on Thursday after the cybersecurity firm posted a drop in operating earnings and flagged weaker revenues from its core business.
Although pre-tax profit more than doubled to £16.6 million for the six months to 31 March, this was largely due to a one-off gain from the £65.6 million sale of its Fox Crypto unit.
Adjusted EBITDA fell to £21.5 million from £25.5 million a year earlier, with the company citing a shift away from low-margin compliance work and delays in securing larger, strategic contracts.
Cyber Security revenue dropped 6.6% on a constant currency basis, while the company said it is focusing more on long-term, higher-value services like managed security and identity management.
Revenue from its software escrow division, Escode, grew slightly and has now delivered ten consecutive quarters of year-on-year growth.
NCC is exploring a potential sale of that business, with discussions ongoing and a possible return of capital to shareholders if a deal goes ahead.
The sale of Fox Crypto helped eliminate the group’s net debt, and the board kept its interim dividend unchanged at 1.50p per share.
The stock was off 4.19p at 219.44p.