LONDON (dpa-AFX) - Shares of NCC Group plc (NCC.L) were losing around 38 percent in the morning trading in London after the provider of cyber security and resilience services Friday trimmed its forecast for fiscal 2023 adjusted operating profit amid further deterioration in the macro-economic and market environment.
For the year, the company now expects Group adjusted operating profit to be within a range of 28 million pounds to 32 million pounds after the impact of strategic investments.
The company previously expected to deliver full-year adjusted operating profit of around 47 million pounds, after the impact of fiscal 2023 strategic investments of 5 million pounds. In fiscal 2022, adjusted operating profit was 48.1 million pounds.
The outlook revision mainly reflects the expected lower Assurance revenue. The Board now expects Assurance or Cyber Security revenue growth on a constant currency basis to be low single digits compared to the high single digit growth expected earlier.
Since its previous trading update, market volatility has materially increased and is having a significant impact on its near-term cyber security revenue and profitability, particularly in the North American technology sector and to a lesser extent in the UK.
Further, the Software Resilience (Escrow) business remains on track to perform, with revenue growth in the second half offsetting most of the decline seen in the first half.
On this basis, the company said it is scrutinising the underlying cost base and will take appropriate action in due course.
Further ahead, the Board expects the economic headwinds and current challenges to the cyber security revenues to persist into the next financial year.
The Board said it remains confident in the medium-term prospects for the cyber market and these strategic actions will position the business to return to greater growth when the market improves.
Mike Maddison, Chief Executive Officer, said, 'Macro-economic headwinds, market volatility and uncertainty are undermining business confidence, particularly in the technology sector where we are well represented, and as a result we are seeing demand fall in the form of projects being further delayed, reduced or cancelled. While we cannot control demand in the short term, the conditions we now face reinforce the rationale for our strategy, which I outlined in February.'
In London, NCC Group shares were trading at 95.73 pence, down 37.51%.
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