February 22, 2017
British cyber security group NCC suffered a sharp fall in its share price for the second consecutive day after it issued a profit warning late on Tuesday and cancelled an investor presentation at short notice.
Shares in the Manchester-based company dropped 19 per cent on Wednesday, after its announcement that problems in its cyber security division — which had already prompted one profit warning in December — would drag down full-year earnings.
NCC said on Tuesday afternoon that earnings before interest, tax, depreciation and amortisation would be 20 per cent lower than the bottom of its previous forecast range of £45.5m-£47.5m. Its share price fell by almost 30 per cent after the announcement.
The company had a lacklustre third-quarter performance, with a reduction in expected sales and profitability in the UK, mainland Europe and North America.
The profit warning caps a difficult few months for NCC and comes despite rapid growth in the cyber security industry, triggered by a growing need for protection from criminals and terrorists.
NCC provides cyber security products and services such as real-time threat monitoring to customers including a mix of large corporates such as financial services companies, governments and intelligence agencies.
“Cyber security is growing as a sector and corporate spend is increasing everywhere, so NCC’s performance raises a lot of questions,” said Oliver Knott, analyst at N+1 Singer, which downgraded its recommendation on the company from buy to hold.