Security, escrow and testing player NCC Group has released a positive update for the four months to end March 2012 (i.e. months 7 to 10 of its FY12, which ends in May). The healthy growth is not unexpected, but the sustained improvement in staff recruitment and retention is particularly welcome. The company’s shares are unchanged in early trading.
The escrow bit of NCC continues to deliver solid growth, with 14% headline in the first ten months, and 7% organic. But it’s the assurance division that is really benefiting from organisations’ ever-growing requirements for - and spending on - security. It delivered 31% revenue growth in the first ten months. Organic growth was 25%, which represents an acceleration compared to the same period last year (when organic growth was 15%). That said, it’s slightly down on the growth for the first half (see Assurance delivering high growth for NCC), suggesting Q3 was a bit less stellar than Q1 and Q2, a fact which may be explained by the lag NCC says it is experiencing on non-security testing renewals.
As for the skills challenge that is so critical to the performance of the assurance division, NCC really seems to have got its act together. Staff turnover so far this financial year has been just 2%. That’s a significant improvement. It’s not that long ago that we were talking about rampant 30% attrition among NCC’s testing staff (see NCC 1, Fate 1).
We’ll have to wait til July and NCC’s full year results to get a view on profitability, but for now this is a solid performance from a company with a good amount of growth opportunity to shoot at.