NCC Group Posts Strong Interim Results as Pure-Play Cyber Business, Announces £185m Shareholder Return

Margins back that up. Cyber gross margin hit a record H1 level of 38.4%, up from 35.2%. That is not a tiny improvement – it is the sort of move that can change how investors value the business if it proves sustainable.

Where the momentum is strongest – and where it is not

The UK and APAC were the stars, with Cyber revenue up 12.5% on a constant currency basis to £73.9m. Europe also grew, up 3.2% to £19.5m.

North America was the weak spot, with revenue down 8.1% on a constant currency basis to £25.0m. Management says this was driven by lower Technical Assurance Services demand from large technology clients and a deliberate effort to reduce customer concentration risk.

That explanation is reasonable, but it still needs watching. A turnaround story is much more convincing when all major regions are pulling in the same direction.

Escode sale turns NCC Group into a pure-play cyber security company

The sale of Escode completed on 29 May 2026. NCC says net cash proceeds were £262.8m before transaction costs and completion adjustment items, while the post balance sheet note gives gross cash consideration of £309.1m and estimated net proceeds of £253m after transaction costs and net cash disposed of.

The big picture is simple enough. Escode is gone, NCC is now focused on Cyber, and the balance sheet is far stronger.

There is also a 12-month Transitional Services Agreement, under which NCC will provide finance, HR, IT support and governance services to Escode. That will generate £4.9m of income over the 12-month period and be included within overheads.

Strategically, I think this matters a lot. Conglomerate-style structures often leave investors trying to compare apples with toolkits. A pure-play cyber business should be easier to analyse, easier to benchmark and, if execution improves, easier to rate more highly.

£185m shareholder return is the eye-catching bit, but read the small print

The Board intends to launch a £170m tender offer and then a new £15m share buy-back. Added together, that is £185m of planned shareholder returns.

On top of that, the earlier buy-back has already been completed, returning around £40.0m. By 31 March 2026, around £33.0m had already been paid, and the programme finished on 17 April 2026.

That is a chunky capital return, and for shareholders it is obviously attractive. It also signals that management does not currently see a need to hoard cash for acquisitions. In fact, the company says no proceeds are being retained specifically for M&A and there are no current plans to embark on M&A activity.

The catch is that the £185m return is subject to due process, including a capital reduction to create sufficient distributable reserves. So this is a strong intention, not a cheque that has already cleared.

Why statutory profit fell even though the underlying story improved

This is where the numbers look messy at first glance. Operating profit fell to £11.9m from £20.0m, and profit before tax dropped to £10.7m from £16.6m.

That sounds poor until you remember H1 2025 included an £11.3m profit on disposal of Fox Crypto. H1 2026 also included £6.0m of individually significant costs, including strategic review costs and Escode transaction costs.

So the adjusted figures paint a better picture than the statutory ones. Investors should not ignore statutory numbers, but in this case they do not tell the full story of the underlying Cyber business.

NCC Group strategic review ends with no sale, and that removes a layer of uncertainty

The Board has concluded its strategic review of the Cyber business and decided that remaining listed is in shareholders’ best interests for now. It also said the company is not in receipt of any approaches and is not in discussions about a sale.

That matters because takeover speculation can distract both investors and management. Drawing a line under it lets the market focus on execution, margins and growth rather than deal gossip.

NCC Group outlook for FY26 and medium-term targets look credible, but not easy

For FY26, the Board expects mid to low single-digit Cyber revenue growth and adjusted EBITDA in line with expectations. Cyber adjusted EBITDA margin, including central and head office costs, is expected to be around 5.5% to 7.5%.

Longer term, management is targeting mid-single digit Cyber revenue growth in FY27 and FY28, around £25m of savings versus FY25 by FY28, and mid-teens adjusted EBITDA margin for Cyber by the end of FY28.

That medium-term margin ambition is the prize. If NCC can genuinely turn a record gross margin into much stronger EBITDA margins over the next two years, the equity story could look very different.

My view on the NCC Group results: more positive than negative

I think this update is good news overall. The company has simplified itself, Cyber is growing, margins are improving, cash generation is better, and shareholders are due to get a large amount of capital back.

The negatives are real, though. North America is still awkward, the continuing operations statutory result was a loss, and some of the investment case now depends on management delivering cost savings and margin expansion from here.

Still, this feels like a business moving from tidy PowerPoint promises into actual numbers. For retail investors, that is usually the point where a turnaround starts to count.