NCC Group

Website: NCC Group
Index: FTSE 250
EPIC: NCC
Supersector: Technology
Sector: Software and Computer Services
Subsector: Computer Services
Market Cap: £355.99M
Payout Frequency: Semi-Annual

NCC Group Dividend Analysis and Summary

Dividend Summary (NCC Group plc)

Declared dividend: Final dividend of 3.15p per share for FY25 (unchanged year-on-year).
Total FY25 dividends: 6.15p per share (interims of 1.50p paid on 4 Apr 2025 and 1 Aug 2025, plus the proposed 3.15p final).
Ex-dividend date: 12/03/2026.
Record date: 13/03/2026.
Payment date: 10/04/2026 (subject to AGM approval on 03/03/2026).
Policy/context: Board highlights 20 consecutive years of dividend payments and states the buy-back programme will not change the current dividend policy.

Financial Cover and Cash Support

FY25 statutory EPS: 5.6p; Adjusted basic EPS: 4.7p vs total DPS of 6.15p (i.e., earnings cover is sub-1x on both measures).
Cash coverage: Net cash from operating activities £33.5m vs dividend cash outflow £19.0m during the year (~1.8x cash cover).
Balance sheet: Net cash £13.1m at year-end (vs £45.3m net debt prior year); new £120m RCF to April 2029 with £114.8m undrawn; finance costs expected to fall to ~£1.8m in FY26.
Cash conversion: 91.3% (H2 particularly strong at 119.4%).

Dividend Sustainability and Growth Outlook

Sustainability: The unchanged 3.15p final maintains the track record, but earnings cover is thin (sub-1x). Near-term sustainability is supported more by cash generation and a net cash balance than by earnings.
Growth trajectory: The Board guides to low single-digit revenue growth in FY26 with Adjusted EBITDA growing faster than revenue. H2 FY25 momentum (Cyber back to growth in Q4, margin improvement) is helpful but not yet translating into robust earnings cover for the current payout.
Capital allocation: Alongside the dividend, management plans an initial share buy-back (Dec 2025/Jan 2026). The Escode sale review could trigger a significant return of capital if concluded, which may be separate from the ordinary dividend.

Structural Changes and Possible Impact on Dividends

Disposal completed: Fox Crypto sold in March 2025, helping move to net cash (one-off profit aided FY25 statutory results).
Escode strategic review: Escode is classified as held for sale and treated as a discontinued operation. Management states a successful sale could enable a significant return of capital. Note: Escode contributed ~£30.9m of Adjusted EBITDA in FY25, the majority of Group AEBITDA; its sale would materially reduce ongoing earnings/cash generation of the remaining core Cyber business unless offset by transformation benefits or M&A.
Cyber business review: The Board is also reviewing options for the Cyber business (independent of Escode), including potential offers for the entire share capital. Any transaction could lead to a change in dividend policy or payout.
Share buy-back: Commencing around Dec 2025/Jan 2026; Board says dividend policy is unchanged by the buy-back. Buy-backs may modestly improve per-share dividend capacity over time.
Refinancing: New RCF to April 2029 provides liquidity headroom and flexibility for capital returns and M&A.

Risks and Flags to Dividend Stability

Coverage: FY25 dividend not covered by adjusted or statutory EPS; payout relies on cash generation and balance sheet strength.
Business mix risk: Escode (high-margin, high-cash) is a large contributor to Group AEBITDA. Its potential sale could reduce recurring earnings and cash flow supporting the ordinary dividend, prompting a future rebasing unless the Cyber business ramps sufficiently.
One-offs: FY25 profit benefited from a one-off gain on Fox Crypto disposal; not recurring.
Operational trajectory: Cyber revenue declined y/y (ex-disposals), albeit with H2 improvement. Sustained execution is needed to bolster earnings cover.
Strategic optionality/M&A: Ongoing reviews (Escode and Cyber) introduce policy uncertainty and potential changes to capital return mix (specials vs ordinary dividends).

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
20/02/2025	04/04/2025	Final	1.50p	GBX
03/07/2025	01/08/2025	Interim	1.50p	GBX

Total (Annual Dividends Per Share): 3.00p

Dividend Yield = Annual Dividends Per Share (3.00p) ÷ Share Price (119.4p) = 2.51%

Ex Dividend Date	Payment Date	Type	Amount	Currency
12/03/2026	10/04/2026	Final	3.1500p	GBX
03/07/2025	01/08/2025	Interim	1.50p	GBX
20/02/2025	04/04/2025	Final	1.50p	GBX
05/09/2024	04/10/2024	2nd Interim	3.15p	GBX
15/02/2024	15/03/2024	Interim	1.50p	GBX
09/11/2023	08/12/2023	Final	3.15p	GBX
16/02/2023	17/03/2023	Interim	1.50p	GBX
13/10/2022	11/11/2022	Final	3.15p	GBX
17/02/2022	04/03/2022	Interim	1.50p	GBX
14/10/2021	12/11/2021	Final	3.15p	GBX
18/02/2021	05/03/2021	Interim	1.50p	GBX
08/10/2020	06/11/2020	Final	3.15p	GBX
06/02/2020	06/03/2020	Interim	1.50p	GBX
05/09/2019	04/10/2019	Final	3.15p	GBX
07/02/2019	28/02/2019	Interim	1.50p	GBX
06/09/2018	05/10/2018	Final	3.15p	GBX
25/01/2018	23/02/2018	Interim	1.50p	GBX
31/08/2017	29/09/2017	Final	3.15p	GBX
26/01/2017	24/02/2017	Interim	1.50p	GBX
01/09/2016	30/09/2016	Final	3.15p	GBX
28/01/2016	26/02/2016	Interim	1.50p	GBX
27/08/2015	25/09/2015	Final	2.68p	GBX
29/01/2015	27/02/2015	Interim	1.30p	GBX
27/08/2014	26/09/2014	Final	2.36p	GBX
22/01/2014	21/02/2014	Interim	1.14p	GBX

Year	Interim	Final	Currency	Total	Change
2024	1.500	1.500	GBX	6.150	32.250
2023	1.500	3.150	GBX	4.650	0.000
2022	1.500	3.150	GBX	4.650	0.000
2021	1.500	3.150	GBX	4.650	0.000
2020	1.500	3.150	GBX	4.650	0.000
2019	1.500	3.150	GBX	4.650	0.000
2018	1.500	3.150	GBX	4.650	0.000
2017	1.500	3.150	GBX	4.650	0.000
2016	1.500	3.150	GBX	4.650	16.830
2015	1.300	2.680	GBX	3.980	13.710
2014	1.140	2.360	GBX	3.500

Number of Shares:

Payment	Paid	Amount
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