Shares digital

NCC (NCC) – Interims PTP: £3.7m (£3.2m) Divi: 2.25p (1.50p)

Strong cash flow, a 50% hike in the interim dividend and a fourth acquisition in 18 months all confirmed the Manchester firm’s key attractions and suggest the recent sharp sell-off in the shares is over done. Despite continued strong trading NCC’s shares had been dragged down from November’s 12-month high of 431p to just 313p earlier this month.

But a reassuring set of figures helped the shares rally back to 327p level. Investors were also heartened by the £110 million cap’s latest acquisition, which is expected to be swiftly earnings enhancing. NCC is to pay a maximum of €10.5 million for Netherlands-based Escrow Europe. An initial outlay of €7.5 million will be supplemented by two further payments, due in March and June.

The deal is designed to boost NCC's presence in the escrow market in Europe and follows on from summer 2006’s swoop for Safe Harbor, which expanded the company’s reach into America. A pair of deals struck in 2007, Site Confidence and Secure Test, were made to bolster the fledgling web assurance and security arm, which represented just over a third of sales and less than than a fifth of adjusted profits at the interim stage. NCC’s software escrow services protect business-critical materials and ensure they are accessible in the event of unforeseen circumstances, while the Assurance Testing arm measures website performance and security from the threat of unauthorised access.

Shares says: Growing rapidly and not expensive on a prospective PE in the mid-teens.

by: Russ Mould