NCC shareholders far from hacked off

7th Jul 2011 09:47

NCC, the fast growing software firm that keeps companies' critical software applications backed up and protects corporations from cyber attacks, saw strong revenue growth last year, helped by some judicious acquisitions."The two US acquisitions have transformed our capabilities and provide a sound platform for sustained international growth," said group chief executive, Rob Cotton.Group revenues rose 49% to £71.0m in the year to 31 May from £47.6m the year before. Excluding the acquisitions, organic growth was 12%. Adjusted pre-tax profits rose 21% to £17.3m from £14.3m the year before. Reported pre-tax profits dipped, however, to £12.77m, once amortisation of acquired intangibles - £3.28m this year versus £1.56m last year - and exceptional items - a credit of £1.14m versus a charge of £0.32m last year - are taken into account. The escrow division, which is the part that keeps mission critical software safe and up to date in the event that a software supplier goes out of business, saw revenue growth of 8% and organic growth of 6%.Group escrow renewals are forecast to increase by 12% to £17.0m this year versus £15.2m in fiscal 2010/11.The assurance division, which is the part that tests companies' computer security measures, saw organic revenue growth of 17%. Operating profit rose by 70% to £6.5m from £3.8m, helped by the acquisition of iSEC in March.The assurance testing order book and renewals rose 23% to £22.6m from £18.3m the year before.""Within the Assurance division, the exponential growth of all types of activity on the internet, has created an open unregulated and unmanaged environment, ideally suited for a wide range of illegal activities including state-sponsored targeted attacks and the rise of 'hacktivism'. These are providing considerable opportunities for us to develop this division further into an international leader in information security," Cotton said.Group margins remained strong with the adjusted operating profit margin at 25%, achieved despite the effects of the acquisitions and growth of non-escrow businesses which have lower margins than the escrow operations.The full-year dividend has been increased in line with the 21% growth in adjusted fully diluted earnings per share. A final dividend of 8.85p makes a total for the year of 13.0p, up from 10.75p the year before.The shares reacted very positively to the results, rising 35p to 680p in the morning session.--jh