Northcoders Group plc (LSE:CODE), the AIM-listed technology Training and consultancy business, has been coping with a sharp contraction in government-funded skills programmes. A trading update on 27 January 2026 for the year to 31 December 2025 described a resilient performance, with Revenue of 5 million pounds against 8.8 million pounds in 2024.

What the company does

Northcoders trains people for careers in software and data and supplies consultancy through a business-to-business arm called Counter. Much of its training revenue has historically come from government-backed programmes, supplemented by sales to individual learners and employers. The group has also introduced a Next Gen Data and AI training line, which management regards as aligned with long-term employer demand.

Latest developments

According to the January update, revenue fell because of changes in the Department for Education skills funding system. Revenue from sources outside government-backed programmes was about 0.4 million pounds. Counter grew sharply, with revenue up 67% to 1.5 million pounds and total sales booked of about 2.5 million pounds.

Management reported about 1 million pounds of contracted revenue into 2026, mostly in the first half, and said it expected better visibility supported by additional London funding awards. Demand in London was said to exceed 30 applications per seat. Government contracts in Lancashire and with the Greater London Authority underpin the first half of 2026, and Counter's pipeline is growing through public-sector frameworks including G-Cloud. Chief executive Chris Hill said LSE:CODE is well positioned to build sustainably as market conditions stabilise.

LSE:CODE also gave notice of its full-year results on 1 April 2026 and published them on 29 April 2026.

Financial picture

Northcoders reported annualised cost savings of about 1.1 million pounds compared with 2024, delivered through restructuring and efficiency measures. Cash at the December year end was 1.6 million pounds, and outstanding loans were about 1.2 million pounds with no financial covenants. The company expected a statutory loss for 2025, mainly reflecting the funding changes and asset impairments. No Dividend was announced. The share price was flat at 31 pence at the time of the update. The revenue decline of roughly 43% shows how dependent the model had been on public funding rules, and the cost reductions are an attempt to align the cost base with a smaller business.

Sector and index context

LSE:CODE sits within the support services and education technology area of the FTSE AIM All Share Index. Skills training is shaped heavily by government policy, with funding, eligibility and apprenticeship rules changing regularly. At the same time, demand for data and artificial intelligence skills is a recognised theme among employers, which gives training providers a potential growth avenue if they can offer commercially funded courses. Competition includes other coding bootcamps and larger education groups.

Key risks

Reliance on public funding remains the main risk, since further policy changes could reduce volumes again. Cash of 1.6 million pounds against loans of about 1.2 million pounds leaves limited headroom if recovery is slower than planned. Building private-pay demand is uncertain, consultancy revenue can be lumpy, and recruitment of learners and delivery staff carries cost pressures.

What to watch next

Investors will look for the first-half 2026 trading update and interim results, evidence that London and Lancashire contracts are converting to revenue, growth at Counter and uptake of the data and AI courses. Any change to government skills funding, and the cash and Loan position, will also be central to assessing the recovery.