NCC Group: Unlocking Cyber Value

Cyber threats are escalating in volume, severity, and sophistication, prompting firms to outsource complex protection needs. Global cyber spend is set to reach $213bn in 2025 and rise further in 2026. NCC’s global delivery model, technical depth, and new Philippines centre position it well to serve enterprise clients in need of penetration testing, threat mitigation and compliance services. The business is reweighting toward longer-term managed service contracts, and the pipeline across identity, application and cloud security is growing steadily. With peers like Darktrace now taken private, NCC stands out as one of the last pure-play, listed cyber consultancies in London.

Escode is arguably one of the UK’s highest-quality B2B assets. It provides mission-critical software escrow for 10,000+ clients—including half the Fortune 500—and ensures business continuity when software vendors fail. With ~£65m in revenue and ~£33m EBIT, it operates at >50% margins and has no real competitor of scale. Regulation is increasingly mandating escrow, boosting demand. Private equity bidders have valued the division at £300m–£400m. NCC confirmed it is in active sale discussions, and the process has drawn credible interest. A successful divestment could not only crystallise value, but also return capital to shareholders and sharpen NCC’s cyber focus.

NCC’s board is reviewing the future of both core divisions. The recent sale of Fox Crypto cleared £50m+ in net debt, leaving the company cash-positive. Escode’s possible divestment is only one part of the story; the Cyber Security business could also be sold or re-rated separately. Collectively, the two divisions could attract £600m–£800m in value versus a current market cap of ~£460m. The shareholder register includes long-term value investors such as Harwood Capital and Richard Griffiths, suggesting alignment for value realisation. With no structural sellers and a clean cap table, NCC’s transformation could be one of the UK’s most overlooked breakup stories.

• Escode Sale Process: Sale decision expected imminently; proceeds could fund buybacks or a special dividend.

• Strategic Review Clarity: Full-group breakup or sale of Cyber unit would rapidly crystallise SOTP upside.

• Cyber Revenue Re-acceleration: Managed service contracts ramping from FY26 could restore top-line momentum.

• Selective M&A or Partnerships: Acquisitions or strategic alliances may bolster technical depth and client access.

• Cyber Spend Momentum: Long-term growth in AI, cloud, and digital security sustains multi-year demand uplift.

• Re-rating as Focused Cyber Pure-Play: Standalone NCC may eventually trade at premium tech services multiples.

While cyber remains a top corporate priority, budget cycles are still under pressure. In H1 2025, revenue declined ~6% as firms delayed lower-value projects. NCC is pivoting toward higher-margin, long-term services, but a slow ramp-up in bookings could prolong earnings softness.

NCC’s turnaround involves multiple moving parts: divesting Escode, growing Cyber Security, and potentially unlocking SOTP value. Delays or price disappointments in asset sales could frustrate the thesis. If Escode is sold but Cyber fails to scale, investor confidence may wane.

The cyber consultancy space is crowded, and securing top talent remains costly. Wage inflation and delivery risk could impact margins, especially as NCC moves work offshore. Maintaining quality and reputation while controlling costs will be a critical balancing act.