Last close As at 05/08/2026
GBP1.42
▲ −0.80 (−0.56%)
Market capitalisation
GBP405m
Research: TMT
H126 results show that the changes at NCC Group go far beyond its divestment programme, making the investment opportunity more interesting than investors might realise. An increased focus on Cyber means that revenue growth is returning, with increasing predictability. This is not just through growth in managed services but, more importantly, as a result of moving from transactional to outcome-based customer relationships. We expect future valuations to reflect not only the higher quantity but also the enhanced quality of earnings.
The H126 results were aligned with the April trading update. H126 revenues were £151.3m, up c 5% CER y-o-y. Cyber revenues rose 5.9% to £118.4m, including 12.5% growth in UK/APAC in the period. Gross margins were 45.9% (H125: 43.2%) with a record Cyber gross margin of 38.4% (H125: 35.2%). Adjusted EBITDA was £23.5m, with Cyber adjusted EBITDA increasing to £8.3m (H125: £3.6m). The interim dividend was unchanged at 1.5p/share. Net debt (excluding leases) as at March 2026 was £10.2m, and, following the sale of Escode, net cash as at May 2026 was £230m. The board intends to commence a £170m tender offer followed by a new £15m share buyback. Guidance is for mid- to low-single-digit Cyber Security FY26 revenue growth and for FY26 adjusted EBITDA margin of c 5.5–7.5% (H126: 7.0%). FY27 and FY28 Cyber revenue growth is expected to be mid-single-digit, with mid-teens adjusted EBITDA margins by the end of FY28. Management expects to generate £25m in gross margin and overheads by FY28.
Investors should note that the group’s new focus is not only restoring top-line growth but, just as importantly, is building greater quality into future earnings. Customer relationships are deepening as a result of more outcome-based agreements, which in turn is driving both growth and predictability of earnings. Consulting and Managed Services revenue now represents 55% of Cyber revenue.
AI is expanding the enterprise attack surface and highlighting the importance of robust cyber solutions over simply adhering to IT best practices. Thus, we expect the market increasingly to realise that AI is more of a tailwind than a threat to NCC and value it accordingly.
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Consensus estimates |
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| Year end | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | DPS (p) | P/E (x) | EV/sales (x) | Yield (%) | EV/EBITDA (x) |
| 9/25 | 305.4 | 43.7 | 18.7 | 4.70 | 4.70 | 30.0 | 0.6 | 3.3 | 4.0 |
| 9/26e | 297.1 | 39.3 | 24.1 | 5.90 | 3.90 | 23.9 | 0.6 | 2.8 | 4.4 |
| 9/27e | 289.8 | 35.3 | 20.3 | 5.00 | 4.00 | 28.2 | 0.6 | 2.8 | 4.9 |
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OSE Immunotherapeutics’ key opinion leader (KOL) event reinforced the clinical rationale for Tedopi, its lead off-the-shelf neoepitope-based cancer vaccine, which is, to our knowledge, the most advanced therapeutic cancer vaccine in the clinic. The KOLs highlighted that immunotherapy remains central to advanced non-small cell lung cancer (NSCLC), but durable benefit is achieved by only a minority of patients, leaving a clear need for additional immune-mediated approaches. It was reminded that Tedopi’s mechanism is differentiated, having been designed to activate tumour specific T cells in HLA-A2 positive patients, and is supported by prior survival, quality-of-life and safety data in NSCLC. The recent positive TEDOVA results in ovarian cancer (OC) also broadened the narrative, suggesting that Tedopi may have clinical utility beyond the core focus in second-line NSCLC.