LSE:NCC

Stock Analysis Report

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Executive Summary

NCC Group plc provides cyber security and risk mitigation services in the United Kingdom, North America, rest of Europe, and internationally. More Details


Snowflake Analysis

Excellent balance sheet with reasonable growth potential and pays a dividend.

Share Price & News

How has NCC Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NCC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

NCC

-5.3%

GB IT

-3.4%

GB Market


1 Year Return

3.5%

NCC

9.1%

GB IT

-19.7%

GB Market

Return vs Industry: NCC underperformed the UK IT industry which returned 9.1% over the past year.

Return vs Market: NCC exceeded the UK Market which returned -19.7% over the past year.


Shareholder returns

NCCIndustryMarket
7 Day-2.6%-5.3%-3.4%
30 Day8.1%-2.8%-4.5%
90 Day12.7%-3.4%-5.1%
1 Year6.0%3.5%10.3%9.1%-16.6%-19.7%
3 Year-10.0%-16.4%49.7%42.3%-12.8%-23.6%
5 Year-25.3%-33.3%111.5%93.0%9.9%-14.9%

Price Volatility Vs. Market

How volatile is NCC Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NCC Group undervalued compared to its fair value and its price relative to the market?

45.48x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NCC (£1.91) is trading above our estimate of fair value (£1.08)

Significantly Below Fair Value: NCC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NCC is poor value based on its PE Ratio (45.5x) compared to the GB IT industry average (30.2x).

PE vs Market: NCC is poor value based on its PE Ratio (45.5x) compared to the UK market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: NCC is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: NCC's PB Ratio (2.5x) is in line with the GB IT industry average.


Next Steps

Future Growth

How is NCC Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

28.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NCC's forecast earnings growth (28.6% per year) is above the savings rate (1.2%).

Earnings vs Market: NCC's earnings (28.6% per year) are forecast to grow faster than the UK market (23.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NCC's revenue (6.2% per year) is forecast to grow faster than the UK market (5.8% per year).

High Growth Revenue: NCC's revenue (6.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NCC's Return on Equity is forecast to be high in 3 years time


Next Steps

  • Explore growth companies in the Software industry.

Past Performance

How has NCC Group performed over the past 5 years?

9.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NCC has high quality earnings.

Growing Profit Margin: NCC's current net profit margins (4.4%) are lower than last year (5.4%).


Past Earnings Growth Analysis

Earnings Trend: NCC's earnings have grown by 9.2% per year over the past 5 years.

Accelerating Growth: NCC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NCC had negative earnings growth (-13.3%) over the past year, making it difficult to compare to the IT industry average (10%).


Return on Equity

High ROE: NCC's Return on Equity (5.5%) is considered low.


Next Steps

Financial Health

How is NCC Group's financial position?


Financial Position Analysis

Short Term Liabilities: NCC's short term assets (£169.7M) exceed its short term liabilities (£93.2M).

Long Term Liabilities: NCC's short term assets (£169.7M) exceed its long term liabilities (£138.1M).


Debt to Equity History and Analysis

Debt Level: NCC's debt to equity ratio (46.3%) is considered high.

Reducing Debt: NCC's debt to equity ratio has reduced from 50.7% to 46.3% over the past 5 years.

Debt Coverage: NCC's debt is well covered by operating cash flow (47.5%).

Interest Coverage: NCC's interest payments on its debt are well covered by EBIT (6.7x coverage).


Balance Sheet


Next Steps

Dividend

What is NCC Group current dividend yield, its reliability and sustainability?

2.43%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NCC's dividend (2.43%) is higher than the bottom 25% of dividend payers in the UK market (1.87%).

High Dividend: NCC's dividend (2.43%) is low compared to the top 25% of dividend payers in the UK market (5.39%).


Stability and Growth of Payments

Stable Dividend: NCC's dividends per share have been stable in the past 10 years.

Growing Dividend: NCC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (110.5%), NCC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NCC's dividends in 3 years are forecast to be well covered by earnings (48% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Adam Palser

2.83yrs

Tenure

UK£742,000

Compensation

Mr. Adam Palser serves as Chief Executive Officer and Executive Director of NCC Group plc since December 01, 2017. Mr. Palser served as the Chief Executive Officer at NSL Limited since February 10, 2015 an ...


CEO Compensation Analysis

Compensation vs Market: Adam's total compensation ($USD963.29K) is about average for companies of similar size in the UK market ($USD1.15M).

Compensation vs Earnings: Adam's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Adam Palser
CEO & Executive Director2.83yrsUK£742.00k0.0084%
£ 44.7k
Tim Kowalski
CFO, Company Secretary & Executive Director2.25yrsUK£383.00k0.0084%
£ 45.2k
Steve Boughton
Global Operations Director2.58yrsno datano data
Ollie Whitehouse
Global Chief Technical Officerno datano datano data
Yvonne Harley
Group Head of Communications2.25yrsno datano data
Max Baldwin
Group Sales & Marketing Director1yrno datano data
Colin Watt
Global Chief People Officerno datano datano data
Sean Preece
Head of Specialist Testingno datano datano data
Robert Horton
Global Head of Assurance Delivery & Acting Managing Director (Fox-IT)no datano datano data
Ian Robertson
Senior VP & COO of Canadano datano datano data
Nick Rowe
Managing Director of Assurance - North Americano datano datano data
Tomas Boye
Managing Director of Assurance Europe2.5yrsno datano data

2.4yrs

Average Tenure

Experienced Management: NCC's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Adam Palser
CEO & Executive Director2.83yrsUK£742.00k0.0084%
£ 44.7k
Tim Kowalski
CFO, Company Secretary & Executive Director2.25yrsUK£383.00k0.0084%
£ 45.2k
Christopher Michael Stone
Non-Executive Chairman3.5yrsUK£145.00k0.044%
£ 238.1k
Jonathan Brooks
Independent Non-Executive Director3.58yrsUK£57.00k0.018%
£ 95.7k
Christopher Batterham
Senior Independent Non-Executive Director2.58yrsUK£63.00k0.018%
£ 95.7k
Mike Ettling
Independent Non-Executive Director3.08yrsUK£50.00k0.018%
£ 95.7k
Jennifer Duvalier
Independent Non-Executive Director2.5yrsUK£50.00k0.0034%
£ 18.2k

2.8yrs

Average Tenure

61yo

Average Age

Experienced Board: NCC's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

NCC Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NCC Group plc
  • Ticker: NCC
  • Exchange: LSE
  • Founded: 1999
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: UK£535.206m
  • Shares outstanding: 279.63m
  • Website: https://www.nccgroup.com/uk

Number of Employees


Location

  • NCC Group plc
  • XYZ Building
  • 2 Hardman Boulevard
  • Manchester
  • Greater Manchester
  • M3 3AQ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NCCLSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 2004
NCClBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJul 2004
NCCG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2004
NZBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2004

Biography

NCC Group plc provides cyber security and risk mitigation services in the United Kingdom, North America, rest of Europe, and internationally. It operates through two segments, Assurance and Software Resili ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/28 21:38
End of Day Share Price2020/10/28 00:00
Earnings2020/05/31
Annual Earnings2020/05/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.