NCC Group (LON:NCC) said it has completed a major strategic reset after selling Escode and is now operating as a focused cybersecurity business, with management pointing to improving revenue momentum, record first-half gross margins and plans to return substantial capital to shareholders.
Chief Executive Mike Maddison said the company had made “significant progress” in delivering its vision despite headwinds, citing the completion of the Escode sale on May 29 and the conclusion of a strategic review of the cyber business. He said NCC is now “a much more clearly focused and pure-play cybersecurity business.”
Cyber business shows improving momentum
Maddison said NCC’s cyber business has delivered three consecutive quarters of growth, including double-digit organic growth in the U.K. in the first half of fiscal 2026. He said three of the company’s four markets grew, while all capabilities expanded during the period.
The company reported a record first-half gross margin of 38.4%. Managed services continued to expand, increasing 4.7% to £40 million on a constant-currency basis compared with the first half of fiscal 2025, and rising 2.8% compared with the second half of fiscal 2025. Managed services represented 33.8% of cyber revenue in the first half.
Maddison said the company’s revenue mix is shifting as planned, with consulting and managed services combined accounting for 55% of cyber revenue. He also said customer metrics had improved, with gross revenue retention rising from 78% to 85%, churn falling from 22% to 15%, and net retention increasing from 89% to 94%.
“The reset phase is complete, and the emphasis now is on execution, delivery, and value creation,” Maddison said.
Revenue and profitability improve
Ellis said the continuing business is showing “a clear improvement in the quality of performance,” with revenue growth, margin gains and stronger profitability. Group revenue rose 4.1% year over year, while cyber revenue increased 5.7%. Escode revenue declined 1.2% on a reported basis, though Ellis said both divisions grew on a like-for-like basis.
Group adjusted EBITDA was £2.5 million, up £5.1 million year over year, with £4.7 million of the improvement coming from cyber. Ellis said cyber EBITDA grew 130% compared with the same period a year earlier.
Ellis also noted that the prior-year operating profit and profit before tax benefited from an £11.3 million profit on disposal of Fox Crypto, as well as £2.8 million of trading from Fox Crypto. Excluding those items, like-for-like operating profit increased by £6 million and like-for-like profit before tax increased by £8.2 million.
He said margin improvement was driven by a better work mix and stronger operational discipline across cyber and Escode. Cost increases were mainly due to £0.6 million of foreign exchange movements and £0.8 million of non-repeating IFRS 16 lease benefits in the prior-year period, with operating efficiencies offsetting inflation.
Escode sale strengthens cash position
NCC ended the first half with net debt of £10.2 million, compared with £13.1 million of net cash at the start of the period. Ellis said the company returned £33 million to shareholders through a buyback announced on Jan. 21, 2026, with another £7 million executed after the half-year close.
Across the £40 million buyback, NCC purchased 31 million shares at an average price of £1.28, Ellis said.
Following receipt of Escode proceeds, NCC had a net cash position of £230 million at the end of May. Ellis said net proceeds from the Escode sale, after £10 million of costs, were £252.8 million, and the company will recognize a disposal gain in the second half of the fiscal year.
Ellis said the company expects to conclude the capital reduction process and issue a circular for the tender offer around the end of July. He also said the board intends to maintain an ongoing dividend, though at a lower level than the existing dividend, while NCC works toward its medium-term margin goals.
North America remains a focus
Maddison said NCC continues to face challenges in North America, where large technology clients have changed buying patterns. He said those clients have reduced demand for technical assurance services due to factors including insourcing, automation, supplier consolidation, completed projects and reduced spending.
However, he said the remaining North American business has seen only a modest decline, and NCC has begun refocusing its go-to-market efforts in the region. The company is bringing U.K. expertise in operational technology and critical infrastructure to North American clients and has appointed a financial services leader, which Maddison said has produced early successes.
In response to an analyst question about North American margins, Ellis said regional margin comparisons are not fully like-for-like because some U.S. work is delivered from the U.K., Spain or Manila, with transfer pricing affecting how margin is reported by region. Maddison said the company is focused on higher-value opportunities, managed services, consulting and more efficient global delivery.
AI seen as opportunity and operational lever
Maddison said artificial intelligence is both a disruptor and an opportunity for NCC. He said AI may disrupt commoditized point solutions, but can also improve productivity by automating scanning, analysis and reporting while increasing demand for independent assurance.
“Automation alone does not replace judgment,” Maddison said, adding that regulators increasingly require human oversight. He said NCC is using large language models and technical expertise to simulate exploits and prompt-based attacks, test resilience and support clients on AI readiness.
The company said it has completed paid reports reviewing Google’s private AI compute system and Meta’s WhatsApp message summarization service. Maddison also said NCC has published 50 AI cyber research papers since 2019 and has appeared more than 130 times in media coverage on AI over the past year.
Looking ahead, NCC said adjusted EBITDA is expected to grow ahead of revenue, with full-year margins in the range of 5.5% to 7.5%. The board remains confident in reaching medium-term objectives, including mid-teens EBITDA margins for cyber by the end of fiscal 2028.
Ellis said NCC expects to realize about £25 million of savings by the end of fiscal 2028, including about £7 million in the current year, with the cost of achieving those savings expected to be broadly pound-for-pound. Maddison said the company has delivered substantial change but remains focused on further execution.
About NCC Group (LON:NCC)
NCC Group is a people-powered, tech-enabled global cyber security and software escrow business.
Driven by a collective purpose to create a more secure digital future, c. 2,000 colleagues across Europe, North America, and Asia Pacific harness their collective insight, intelligence, and innovation to deliver cyber resilience solutions for both public and private sector clients globally. With decades of experience and a rich heritage,
NCC Group is committed to developing sustainable solutions that continue to meet client’s current and future cyber security challenges.
