NCC Group (LSE:NCC) appointed finance chief Guy Ellis as chief executive on 27 October, alongside a trading update showing a smaller, cash-returning cyber specialist after the sale of its Escode business.

NCC Group (LSE:NCC) has entered a new phase. On 27 October the cyber security specialist announced that Guy Ellis, its chief financial officer since June 2023, had been appointed chief executive with immediate effect, succeeding Mike Maddison. Group financial director Andy Beaver is to serve as interim chief financial officer.

The change was announced alongside a trading update for the year to 30 September 2026, in which the board said cyber Revenue was expected to be about £235m, up 3.7% from £227.4m on a constant currency basis and excluding non-core disposals. Group revenue including Escode, the software Escrow Business sold in May, is expected to be about £280m. The company (LSE:NCC) said revenue was in line with market expectations.

Profitability moved in a favourable direction. Cyber gross Margin reached a record 38.4%, an increase of 1.8 percentage points. Cyber adjusted Earnings before interest, tax, Depreciation and Amortisation are expected to be £16.3m, or about 6.9% of revenue, while the group figure, including £19.7m from Escode for the eight months to May, is expected to be approximately £36m, ahead of market expectations.

About the company

NCC Group is a UK-headquartered cyber security and risk management company that advises organisations on how to understand and reduce digital threats. Its services include security assessments and penetration testing, incident response, managed detection and response, threat intelligence, and consulting on governance and compliance. Customers range from large corporates and public bodies to technology developers, across the UK, Europe and North America, and many are drawn by the group's independence from product vendors.

Revenue is earned through project-based assurance work, which is often repeated annually, and through longer-term managed services, which provide recurring income. The group's strategy is to raise the proportion of managed and recurring revenue, deepen existing client relationships and improve profitability. The sale of Escode, a software escrow business, in May has left NCC as a focused cyber company, with proceeds used for Shareholder returns and Balance Sheet flexibility.

For the year to 30 September 2026, cyber revenue is expected to be about £235m, up 3.7% on a constant currency basis, while group revenue including Escode is about £280m. Cyber gross margin reached 38.4%, and cyber adjusted earnings before interest, tax, depreciation and amortisation are expected at £16.3m, about 6.9% of revenue. Net cash of about £53m at the year end supports the buyback programme.

A smaller share count after the tender

The sale of Escode has transformed the balance sheet and share register. A £170m tender offer closed at the start of September, with NCC buying back 117.2 million shares at 145p each, reducing the number of shares in issue to about 167.5 million. That followed a £40m buyback completed in April, and a further programme of up to £15m was launched on 7 September, running until October 2027 subject to renewal of shareholder authority. By the end of the financial year, 35% of the £15m had been executed.

Net cash stood at about £53m on 30 September, before arrangement fees and excluding Lease liabilities. In September the company also signed a new three-year revolving Credit Facility worth £60m, giving it additional flexibility as it adjusts to life as a pure-play cyber group. A transitional services agreement with the buyer of Escode runs until 28 May 2027.

Mr Ellis has set out an ambition built around organic growth and a higher proportion of recurring revenue, with a plan to reach mid-teen margins at the earnings level. That would represent a substantial step up from the 6.9% expected for the 2026 financial year. He has emphasised deepening client relationships, expanding managed services and building on cyber expertise, and he pointed to the growing need for independent specialist advice as artificial intelligence changes the risk landscape.

Where the cyber services market stands

Demand for cyber security services has been supported by regulation, growing use of cloud services, Supply chain risk and the increasing sophistication of attacks. Organisations are also looking for independent advice, as the number of tools and vendors has grown.

The market is competitive, with large consultancies, specialist firms and product vendors all offering overlapping services. Differentiation tends to come from technical credibility, sector knowledge and the ability to convert one-off projects into longer relationships.

What to watch next

The audited results on 10 December should provide the fullest account of the new chief executive's growth strategy. Key items are how the margin ambition in the mid-teens will be reached, what Investment it requires and how quickly Recurring Revenue can grow.

Investors will also follow the pace of the remaining buyback, the use of the new credit facility and the end of transitional services with the buyer of Escode in 2027. Management continuity, including the interim finance chief arrangement, is a further point to monitor.

Details due in December

Chair Chris Stone said the appointment followed a process that considered internal and external candidates, and credited Mr Maddison and the executive team with delivering the transformation of the business. Mr Maddison said he was confident that the company was in capable hands.

The board said it remained confident in the outlook and that its financial expectations for the year to 30 September 2027 were unchanged. Audited results for the 2026 financial year will be published on 10 December, when the company has promised a more detailed account of its growth strategy.

For investors, that presentation will be the first full opportunity to judge how Mr Ellis intends to bridge the margin gap, and how much investment such a plan might require. The cost and efficiency programme is reported to be on track, and the December update should show how far those savings can contribute to the margin ambition he has outlined for the business.