UPDATE:NCC Group FY Pretax Profit Up;Sees FY11 In Line With Views

5th Jul 2010 10:20

(Rewrites, adds CEO interview, analyst comments.) By Tommy Stubbington Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Information technology security company NCC Group PLC (NCC.LN) Monday posted an increase in profit and revenue for fiscal 2010, and said it expects revenue to continue to grow in line with market expectations. The firm reported pretax profit of GBP13.1 million for the year ended May 31, up from GBP10.9 million a year earlier, with revenue climbing 15% to GBP53.7 million. NCC expects revenue growth to continue in all its regions and divisions in the coming year, and is "comfortable" with current market expectations for fiscal 2011, Chief Executive Rob Cotton told Dow Jones Newswires. The median estimate for 2011 of five analysts is pretax profit of GBP17 million on revenue of GBP68 million, according to Factset. The firm, which provides security services such as software escrow and software security assurance known as "ethical hacking," raised its total dividend 16% to 10.75 pence. Cotton said the company, which made two acquisitions in the past year, continues too look for companies to buy in the U.K. and particularly the U.S. markets. "In the U.S. tax changes have made businesses appear pretty affordable," he said. NCC generally makes around two acquisitions each year, Cotton said, adding: "This year should be no different." Any deals would be funded from cash flow and the company's existing debt facility, and could be worth anything from "a few million dollars" up to $15 million, he added. NCC doesn't fear the possibility of a "double-dip" recession, Cotton said, as the services it provides are non-discretionary spending for its customers. "We've done everything we can to get away from the vagaries of the economy," he said. KBC Peel Hunt analyst Alex Jarvis reiterated his "buy" rating on the stock, raising the target price to 560 pence from 540 pence. "We anticipate 21% earnings growth in the current year, with further potential upside from escrow price rises," Jarvis said. At 0910 GMT, shares were up 28.5 pence, or 6.9%, at 442 pence in a 0.2% lower Dow Jones U.K. Smaller Companies Index. -By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [email protected] (END) Dow Jones Newswires July 05, 2010 05:20 ET (09:20 GMT)