Manchester cyber security company, NCC Group, has divested its Netherlands-based crypto operation.
CR Group Nordic AB will acquire Fox Crypto BV for £66 million in cash.
The sale is likely to conclude by October.
Financial Details of the Sale
Fox Crypto BV reported revenues of £18 million last year, with profits amounting to £4 million. The sale represents an EBITDA multiple of 16.5x for 2024.
This sale will not impact NCC Group’s continuing cyber capabilities. The company was previously a standalone entity.
NCC Group’s debt as of 31st May 2024 stood at £38.5 million, and the net proceeds of £62 million will be used to clear this debt.
This will lead to both organic and inorganic growth opportunities in NCC Group’s cyber security business.
Statement to the Stock Exchange
NCC Group noted that the disposal is part of a plan to simplify the business.
This move is intended to create a more focused cyber security business with clear future growth opportunities.
The company’s transformation strategy aims to enhance shareholder value.
Unaudited Financial Results
The announcement followed the release of NCC Group’s unaudited financial results for the year ending 31st May.
Revenue for 2024 decreased to £324.4 million from £335.1 million in 2023. This drop was attributed to a 4.5% fall in income from the Cyber Security division.
Meanwhile, Escode operations saw a 2.5% revenue growth.
CEO’s Perspective
Mike Maddison, Chief Executive Officer, said the company’s transformation journey is progressing well.
They have enhanced cyber capabilities, diversified routes to market, and developed differentiated brands.
A global resourcing and scheduling model, enabled by a new delivery and operating centre, has been implemented.
The company has also successfully reduced operating costs and improved gross margins.
Continued Growth of Escode
The company has achieved continued quarter-on-quarter growth in its Escode operations.
Mike Maddison praised the focus and resilience of the management team and all dedicated colleagues.
These steps have been crucial in achieving strategic progress while maintaining cost efficiency.
Future Prospects
NCC Group appears well-positioned for future growth within the cyber security sector.
The sale of Fox Crypto BV will free up resources for other strategic initiatives.
Continued focus on core business areas will likely enhance overall group performance.
Summary
NCC Group is simplifying its business to concentrate more on cyber security.
Clearing the debt with the proceeds from the sale of Fox Crypto BV is a strategic move.
The sale of Fox Crypto BV is a significant step in NCC Group’s transformation strategy.
With a clear focus on core competencies, the company is likely to achieve sustained growth and improved shareholder value.
