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NCC to look at costs after warning on profits as it prepares to cut jobs

NCC

NCC to look at costs after warning on profits as it prepares to cut jobs

Cyber security company NCC Group has lowered its profit projections after experiencing major financial effects from "market volatility.

The company, which has its headquarters in Manchester, now projects its most recent fiscal year's adjusted running profit will range from £28 million to £32 million.

This is after it had originally forecast a profit of about £47 million.

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The company added that instead of the high single-digit growth indicated in its half-year results, it now anticipates low single-digit constant currency growth for its cyber protection revenue growth.

According to NCC, its software resilience company is still on schedule to meet expectations.

The group said that as a result of its forecast lower profit it is "scrutinising the underlying cost base and will take appropriate action in due course".

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NCC said in February that it was to cut jobs "as a result of the current market conditions".

In a statement issued to the London Stock Exchange, it said: "These economic headwinds and current challenges to the group's cyber security revenues, which the board expects will persist into the next financial year, reinforce the need to implement the next chapter of the NCC Group strategy.

"The strategy will deliver revenue from a broader service portfolio, addressing the full cyber security lifecycle, with deeper presence across sectors.

"This will be supported by the activation of a global delivery model, including an offshore delivery and operations centre, and investment in the go-to-market model and brand for cyber.

"On this basis, the board remains confident in the medium-term prospects for the cyber market and these strategic actions will position the business to return to greater growth when the market improves."

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Analysts at Panmure Gordon recently valued NCC's software resilience business at around £240m and tipped that a sell-off as "the most likely result" of its strategic review.

Chief executive Mike Maddison said: "Macro-economic headwinds, market volatility and uncertainty are undermining business confidence, particularly in the technology sector where we are well represented, and as a result we are seeing demand fall in the form of projects being further delayed, reduced or cancelled.

"While we cannot control demand in the short term, the conditions we now face reinforce the rationale for our strategy, which I outlined in February.

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"We remain confident that the group's strategy will deliver a more resilient business that is positioned to fully capitalise on opportunities to meet changing client needs in a dynamic cyber market."

Source: Business Live

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