Cyber-security consultancy NCC Group said it snubbed nearly £9m of third-party software sales in its last financial year as it unveiled an encouraging set of full-year numbers.
Having slumped to a £44.8m annual loss last year, the LSE-listed firm this morning bounced back by unveiling a £11.9m pre-tax profit for its year to 31 May 2018.
The results, which also showed group revenue from continuing operations growing by 8.3 per cent to £233.2m and net debt being trimmed from £43.7m to £27.8m, fuelled a 10 per cent spike in its share price. NCC also announced the appointment of a new CFO after its previous chief beancounter, Brian Tenner, resigned in June.
As part of a strategic review launched last year, NCC vowed to rebalance its business away from single transaction reselling of third-party products, unless they complemented professional services or monitoring activities - the goal being to focus on higher value-add activities and build long-term relationships with customers.
That move has now been completed, NCC's CEO Adam Palser said, adding that withdrawing from third-party products robbed it of £8.6m of revenues during the year. In the UK, its resell business is based on its 2015 acquisition of Accumuli.
"In addition, we have moved to new lower risk terms and conditions for the Group so that if we do facilitate the procurement of a third party product for a customer, we act as an agent only and record a commission on the transaction as opposed to the gross revenue and cost value," Palser said.
Although UK revenues fell by £1.7m year on year, stripping out the resale exit UK growth would have stood at £6.9m, or 6.8 per cent year on year.
Chairman Chris Stone hailed the results as a "strong recovery from the declining trajectory experienced at the end of the prior financial year".
"Shareholders will remember that last year, I reflected on a very challenging period in the group's history with operational and financial performance having been well below expectations," he added.
"This was accompanied by significant board and management change. While much remains to be done, I am confident that the building blocks for long-term sustainable improvement in business performance and shareholder returns are starting to be put in place."
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