Ncc Share Discussion Threads

[qs99] 22/2/2017 11:51

heading back to that quid level nicely

[ileeman] 22/2/2017 11:19

Takeover target down here and not surprising.

[qs99] 22/2/2017 11:13

well £1.38 TP from broker as stated above DYOR looks to me that traders are pushing this back to North of £1....let's see GLA and IMO

[technowiz] 22/2/2017 11:08

80p..keep dreaming sunshine ;-)

[tonysss13] 22/2/2017 11:08

IN THE KNOW: New Profit Warning Could Put NCC In Play - Shore

[22-February-2017]

Sam Unsted

LONDON (Alliance News) - NCC Group could become a takeover target or indeed put itself up for sale following its latest profit warning, a statement which suggests a serious slowdown for its Assurance arm in recent weeks, analysts said.


Shares in NCC were down 26% at 93.25 pence Wednesday morning.


On Tuesday, NCC issued another profit warning for its current financial year and said it has initiated a strategic review of the business, which will include a review of its Assurance arm.


NCC - which provides software escrow and verification, cyber security consulting and managed services - said trading in its Assurance arm in the year to the end of May will be "significantly lower" than it had previously anticipated.


Due to this, NCC said its adjusted earnings before interest, tax, depreciation and amortisation for the year will be around 20% lower than the GBP45.5 million to GBP47.5 million range it provided in December, which had already been downgraded.


In light of the deteriorating trading, NCC said it will initiated a review of its business and will closely consider its Assurance arm, with regards to how it operates and how it sells its products. The review will also consider how NCC can better use its assets and resources across the business.


In light of its "seemingly comforting" interim results in January, Shore Capital's Robin Speakman and Ben McSkelly said the warning from NCC on Tuesday suggests a "severe drop-off" in the performance of the Assurance division.


"Given the strategic position that NCC holds in the provision of IT Assurance and security services, where we believe long term demand continues to grow, we believe that NCC should be regarded as potentially being in play," the analysts said, suggesting NCC may become a takeover target following the battering it shares have taken.


The analysts reckon the position of NCC Chief Executive Rob Cotton will now come under "heavy scrutiny" and that the strategic review may well see a sale or break-up of the group considered.


Shore downgraded NCC to Hold from Buy.


N+1 Singer analyst Oliver Knott said an "extended period of uncertainty" is now on the horizon for NCC, which will "make it hard for investors to gain confidence" in the company in the short term.


Yet, Knott said he sees "fundamental value" in NCC stock. The company's Escrow arm is not impacted by the warning and, at the current share price, its Assurance arm trades at only 5 times calendarised 2017 earnings before interest, tax, depreciation and amortisation.


Still, while this looks like an attractive multiple for a "rare cybersecurity asset", Knott said he will await more clarity on the underlying nature of the issues NCC faces.


He kept his recommendation on NCC at Hold with an unchanged 138p price target.

[blueball] 22/2/2017 11:07

Shareholders have been missled keya.

[fillipe] 22/2/2017 11:07

Turning up now, should see a decent uptick..... RSI very well up to 79.85 (!!!!!) as I type.

f

[tonysss13] 22/2/2017 11:07

IN THE KNOW: New Profit Warning Could Put NCC In Play - Shore

[blueball] 22/2/2017 11:01

My 80p target in sight.

[spoole5] 22/2/2017 10:58

Been on a run like that before myself. Makes you not want to be a PI anymore. Feel for you.

[mw8156] 22/2/2017 10:53

HAYT, RCN, NCC it's turning out to be a vintage year!

[effortless cool] 22/2/2017 10:49

Writing that down helped clear my judgement. This is not the story I bought into (via ACM) - I have sold.

Good luck to holders.

[effortless cool] 22/2/2017 10:44

I'm struggling to reach a conclusion on this.

Bear points
- Management are hopelessly out of their depth in running a business of this size and complexity (and we did get early warning of this with the .trust debacle).
- Management do not yet have anything approaching a decent handle on the finances and there is a strong possibility of more bad news to come.
- Market cap is still around £250m and valuations are high on most metrics; there is plenty of room for further falls.

Bull points
- The escrow business has not suffered problems and represents a very solid core to the valuation.
- The assurance business is in a very hot sector and offers significant upside if they can sort out the issues.
- A takeover bid is a strong possibility, and with lame duck management and angry shareholders is likely to succeed. The USD:GBP rate makes this an attractive opportunity for a US firm wanting to enter the European market.

Trouble is, I had much the same list of bull and bear points one week ago, when the share price was twice as high.

[miahkaysor] 22/2/2017 10:34

£1+ here we come

[qs99] 22/2/2017 10:31

personally think the fall looks overdone DYOR, but if it is still on to make over £30m and with net debt relatively low at just over c.£40m, in this sort of space is it really worth a 1/3rd of what it was a few months ago? Must be some strategic value in there for a competitor IMO? as I said DYOR, this is not without its risks as two profit warnings often lead to a third, but they are not from what I can see forecasting a loss, merely lower profits? Have tucked a few away on that basis at 90p/.....gla

[spoole5] 22/2/2017 10:24

Could be quite a few shorts closing. Surely the easy money has been made.

[quidzinn] 22/2/2017 10:22

In for the bounce @ 89.25p

Q

[dontay] 22/2/2017 10:20

After this debacle If you were a company CEO looking for a cyber security protection system ... would you go to NCC?

[2lb] 22/2/2017 10:17

The CEO took out £11m in cash on 18th March 2014 so I wouldn't feel too sorry for him especially when this is added to the millions more in other share sales, salary and bonus payments with a current run rate in excess of £1m a year.

The issues with NCC centre on the acquisition of Fox which was at a crazy multiple and driven by the vanity of the BoD wanting to get to a billion pound valuation, with the strategy behind that goal not thought through. Accumuli also looks like a poor acquisition in terms of how it has been integrated, or not, into the group.

The rate and scale of acquisitions quickly outgrew the ability of the senior management within NCC to manage. Integration of acquisitions is hard and most fail, look at the stats generally, so whilst the plan was ambitious it was also out of control.

There remains a very strong and profitable core to NCC but they need to get back to basics a little, bring in some better quality senior management who will challenge the CEO and Board and also a much stronger Chairman and NED's who who have, it would appear, always been far to chummy with the Exec directors and have therefore not applied the level of governance and scrutiny required of a FTSE 250 company.

I do see a decent recovery play here now as 90p really does look like a massive overreaction but there surely must be changes over the coming months......

[ileeman] 22/2/2017 10:16

Escrow division still performing well.

[aishah] 22/2/2017 10:15

Techmarketview:

NCC revises FY guidance 20% downwards

AIM-listed cyber security consultancy and risk mitigation specialist NCC Group revised its expectations for the current financial year following poor third quarter performance and cancelled its capital markets event scheduled for today.

Management are now forecasting that the Group’s adjusted EBITDA for the year ending 31st May 2017 will fall approximately 20% short of the £45.5-£47.5m predicted last December. If those fears are realised, EBITDA would fall somewhere in the region £36.4-£38m, at least 13% down on the prior year’s figure of £43.7m.

The Group's previously strong performance has funded a lot of expansion activity but the firm was hit by the cancellation of three large contracts and the deferral of a fourth worth £14-18m in H1. Sales activity for security consulting, software vulnerability testing and web performance across the UK, Europe and North America does not appear to have picked up in Q3 as NCC struggles to execute on new cyber security contracts.

The company said that its Escrow business (which represents roughly half of the group’s revenue) continues to perform “in line with expectations” and will initiate a strategic review of its operations in a bid to halt further problems.

We think public and private sector demand for cyber security software and services will remain strong in 2017 and NCC Group is well placed to capitalise. However some organisations may be putting consultancy projects on hold until the regulatory uncertainty caused by Brexit, the EU’s forthcoming general data protection regulation (GDPR) and Network and Information Security (NIS) directives, whatever “equivalent221; UK legislation will eventually look like, and EU-US data sovereignty issues dissipates.

Market dynamics may also be impacting NCC’s performance, with business lost to other consultancies like PwC, and large SITS suppliers such as BT, HPE and IBM combining advisory projects with product implementation and service delivery.

[asagi] 22/2/2017 10:12

the shares were around twice the price before the Accumuli acquisition.

I've gone long.

Asagi (long NCC)

[ileeman] 22/2/2017 10:07

Yea tsmith predators lurking at this price, and as you say looks like they are clearing a seller shouldnt take long with this volume.