LSE:NCC

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

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


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

2.7%

NCC

1.1%

GB IT

2.0%

GB Market


1 Year Return

-5.4%

NCC

8.8%

GB IT

3.3%

GB Market

Return vs Industry: NCC underperformed the UK IT industry which returned 8.8% over the past year.

Return vs Market: NCC underperformed the UK Market which returned 3.3% over the past year.


Share holder returns

NCCIndustryMarket
7 Day2.7%1.1%2.0%
30 Day3.7%-2.8%-1.0%
90 Day3.1%-5.4%-1.7%
1 Year-2.7%-5.4%11.5%8.8%8.3%3.3%
3 Year-41.9%-46.1%68.1%55.8%19.0%4.5%
5 Year12.8%1.4%74.0%58.1%38.4%8.4%

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 based on future cash flows and its price relative to the stock market?

17%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: NCC (£1.84) is trading below our estimate of fair value (£2.21)

Significantly Undervalued: NCC is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: NCC is poor value based on its PE Ratio (37.9x) compared to the IT industry average (27x).

PE vs Market: NCC is poor value based on its PE Ratio (37.9x) compared to the UK market (16.4x).


Price Based on Expected Growth

Low PEG Ratio: NCC is poor value based on its PEG Ratio (1.1x)


Price Based on Value of Assets

PB vs Industry: NCC is good value based on its PB Ratio (2.4x) compared to the GB IT industry average (2.5x).


Next Steps

Future Growth

How is NCC Group expected to perform in the next 1 to 3 years based on estimates from 5 analysts?

34.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: NCC's forecast earnings growth (34.4% per year) is above the savings rate (1.2%).

Earnings vs Market: NCC's earnings (34.4% per year) are forecast to grow faster than the UK market (12.3% per year).

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

Revenue vs Market: NCC's revenue (8.5% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: NCC's revenue (8.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: NCC's Return on Equity is forecast to be low in 3 years time (14.3%).


Next Steps

Past Performance

How has NCC Group performed over the past 5 years?

-23.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NCC's earnings have declined by -23.7% per year over the past 5 years.

Accelerating Growth: NCC's earnings growth over the past year (10.7%) exceeds its 5-year average (-23.7% per year).

Earnings vs Industry: NCC earnings growth over the past year (10.7%) exceeded the IT industry 4.2%.


Return on Equity

High ROE: NCC's Return on Equity (6.4%) is considered low.


Return on Assets

ROA vs Industry: NCC's Return on Assets is below or equal to the IT industry average last year.


Return on Capital Employed

ROCE Improving: NCC's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is NCC Group's financial position?


Financial Position Analysis

Short Term Liabilities: NCC's short term assets (£97.8M) exceeds its short term liabilities (£75.5M)

Long Term Liabilities: NCC's short term assets (97.8M) exceeds its long term liabilities (61.0M)


Debt to Equity History and Analysis

Debt Level: NCC's debt to equity ratio (26.1%) is considered satisfactory

Reducing Debt: NCC's debt to equity ratio has reduced from 43.7% to 26.1% over the past 5 years.

Debt Coverage: NCC's debt is well covered by operating cash flow (72.2%).

Interest Coverage: NCC's interest payments on its debt are well covered by EBIT (13.8x coverage).


Balance Sheet

Inventory Level: NCC has a low level of unsold assets or inventory.

Debt Coverage by Assets: NCC's debt is covered by short term assets (assets are 1.774950x debt).


Next Steps

Dividend

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

2.82%

Expected Dividend Yield


Dividend Yield vs Market

company2.5%marketbottom25%2.0%markettop25%5.4%industryaverage2.2%forecastin3Years2.8%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: NCC's dividend (2.53%) is higher than the bottom 25% of dividend payers in the UK market (2%).

High Dividend: NCC's dividend (2.53%) is low compared to the top 25% of dividend payers in the UK market (5.42%).

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 (95.7%), 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 (43.9% payout ratio).


Next Steps

Management

What is the CEO of NCC Group's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Adam Palser 0

1.8yrs

Tenure

UK£679,000

Compensation

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


CEO Compensation Analysis

Compensation vs. Market: Adam has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Adam's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.3yrs

Average Tenure

Experienced Management: NCC's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

1.8yrs

Average Tenure

60yo

Average Age

Experienced Board: NCC's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUK£25,50028 Jan 19
Jonathan Brooks
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares20,000
Max PriceUK£1.28
BuyUK£99,00225 Jan 19
Christopher Michael Stone
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares74,382
Max PriceUK£1.33

Ownership Breakdown


Management Team

  • Tim Kowalski (60yo)

    CFO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£417.34k
  • Sean Preece

    Head of Specialist Testing

    • Tenure: 0yrs
  • Ollie Whitehouse

    Global Chief Technical Officer

    • Tenure: 0yrs
  • Rob Horton

    Global Head of Assurance Delivery

    • Tenure: 0yrs
  • Adam Palser

    CEO & Executive Director

    • Tenure: 1.8yrs
    • Compensation: UK£679.00k
  • Steve Boughton

    Global Operations Director

    • Tenure: 1.6yrs
  • Ian Robertson

    Senior VP & COO of Canada

    • Tenure: 0yrs
  • Colin Watt

    Global Chief People Officer

    • Tenure: 0yrs
  • Yvonne Harley

    Group Head of Communications

    • Tenure: 1.3yrs
  • Max Baldwin

    Group Sales & Marketing Director

    • Tenure: 0.08yrs

Board Members

  • Chris Stone (56yo)

    Non-Executive Chairman

    • Tenure: 2.5yrs
    • Compensation: UK£140.00k
  • Jonathan Brooks (63yo)

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: UK£54.00k
  • Chris Batterham (64yo)

    Senior Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£60.00k
  • Tim Kowalski (60yo)

    CFO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£417.34k
  • Mike Ettling (55yo)

    Independent Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: UK£47.00k
  • Jenny Duvalier

    Independent Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: UK£47.00k
  • Adam Palser

    CEO & Executive Director

    • Tenure: 1.8yrs
    • Compensation: UK£679.00k

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£511.237m
  • Shares outstanding: 277.85m
  • Website: https://www.nccgroup.trust/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 in two segments, Assurance and Escrow. The company  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/13 21:36
End of Day Share Price2019/10/11 00:00
Earnings2019/05/31
Annual Earnings2019/05/31


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.

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