Notes to the Financial Statements continued for the year ended 30 September 2025
1 Material accounting policies continued Treasury shares
The Group operates an Employee Share Ownership Trust (ESOT), which holds shares for the benefit of employees under the Group’s share-based payment schemes. Shares held by the ESOT are classified as treasury shares in the consolidated Financial Statements and are presented as a deduction from equity. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost being taken to reserves. No gain or loss is recognised in the Income Statement on the purchase, sale, issue or cancellation of equity shares. To the extent the Company makes funds available to the ESOT under the terms of a formal loan arrangement, this loan arrangement is recognised as an intergroup loan receivable within current assets. The recoverability of this loan receivable is reviewed at each reporting date, and where objective evidence of impairment exists, an impairment loss is recognised in accordance with IFRS 9 ‘Financial Instruments’. 2 Critical accounting judgements and key sources of estimation uncertainty The preparation of Financial Statements requires management to exercise judgement in applying the Group’s accounting policies. Different judgements would have the potential to change the reported outcome of an accounting transaction or Balance Sheet. It also requires the use of estimates that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis, with changes recognised in the period in which the estimates are revised and in any future periods affected. The table below shows the area of critical accounting judgement and estimation that the Directors consider material and that could reasonably change significantly in the next year.
Accounting area
Accounting judgement?
Accounting estimate?
Carrying value of goodwill
No
Yes
2.1 Critical accounting judgements No critical accounting judgements have been made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated Financial Statements. 2.2 Key sources of estimation uncertainty Information about estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying values of assets and liabilities within the next financial year is addressed below. While every effort is made to ensure that such estimates and assumptions are reasonable, by their nature they are uncertain, and as such changes in estimates and assumptions may have a material impact. Estimates and assumptions used in the preparation of the Financial Statements are continually reviewed and revised as necessary as at each reporting date. The Directors have considered the impact of climate change on the following estimation uncertainties. Due to nature of the climate change impact on the Group, no material impact has been identified. The key sources of estimation uncertainty disclosed in the Group’s consolidated Financial Statements for the 16 month period ended 30 September 2024 remain applicable for the year ended 30 September 2025. These primarily relate to the carrying value of goodwill. Carrying value of goodwill The Group has significant goodwill balances as at 30 September 2025, arising from acquisitions in previous years. The carrying value of goodwill at 30 September 2025 is £46.3m (30 September 2024: £156.5m). Goodwill is tested for impairment annually on 30 September. The Group allocates goodwill to cash generating units (CGUs), representing the lowest level of asset groupings that generate independent cash inflows. For the year ended 30 September 2025, tests for impairment are based on the calculation of a fair value less costs to sell (FVLCTS) which has been used to establish the recoverable amount of each CGU. The FVLCTS valuation of each standalone CGU has been calculated by determining sustainable earnings, which are based on the Adjusted EBITDA 1 , and applying a reasonable market multiple on the calculated sustainable earnings. The sustainable earnings figures used in this calculation include a key assumption regarding achievable forecast revenue. Reasonable changes in the key assumptions used to determine the sustainable earnings can materially impact the outcomes of the impairment reviews and the impairment charges recognised. An analysis of the Group’s goodwill, the methodology used to test for impairment and sensitivity analysis relating to the sustainable earnings are set out in Note 11. Regarding the prior period, the two principal areas of estimation uncertainty (whereby reasonable changes in their assumptions could materially impact their respective outcomes) related to: • The impairment of goodwill within the North America Cyber Security CGU
• The reallocation of goodwill within the Europe Cyber Security CGU Impairment of goodwill – North America Cyber Security
This estimate involved a calculation of sustainable earnings, within which the gross margin used was a key assumption, which had the potential to result in material adjustments to the carrying amounts of goodwill. No impact was noted in the current year, given the full goodwill balance was impaired in the prior period. Reallocation of goodwill – Europe Cyber Security This estimate involved an allocation of goodwill between the Fox Crypto CGU and the remaining Europe Cyber Security CGU. This was based on a calculation of adjusted relative fair values, within which the revenue used was a key assumption. The goodwill allocated to the Fox Crypto CGU was reclassified as an asset held for sale at 30 September 2024 and was derecognised on 28 March 2025 following the completion of the disposal of Fox Crypto (see Note 31). No further impairments or changes to goodwill allocations have occurred in the year ended 30 September 2025. For further information on the Group’s impairment methodology and sensitivity analyses, refer to Note 11. 1 R evenue at constant currency, Adjusted EBITDA, and net debt excluding lease liabilities are Alternative Performance Measures (APMs) rather than IFRS measures. For an explanation of APMs and adjusting items, including a reference to the reconciliation with statutory information, please see Appendix 1.
NCC Group plc — Annual report and accounts for the year ended 30 September 2025 122
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