Notes to the Financial Statements continued for the year ended 30 September 2025
11 Goodwill and intangible assets continued Cash generating units (CGUs) Goodwill and intangible assets are allocated to CGUs in order to be assessed for potential impairment. CGUs are defined by accounting standards as the lowest level of asset groupings that generate separately identifiable cash inflows that are not dependent on other CGUs. The CGUs presented are consistent with the year ended 30 September 2024, with the exception of the Fox Crypto CGU, which was disposed of during the year (with associated goodwill of £52.1m classified as held for sale as at 30 September 2024). The CGUs and the allocation of goodwill to those CGUs are shown below:
Goodwill 2025 £m
Goodwill 2024 £m
Cash generating units – continuing operations
44.3
UK and APAC Cyber Security North America Cyber Security
44.3
—
—
2.0
Europe Cyber Security
2.2
Total Cyber Security
46.3
46.5
The Escode division, which was classified as a discontinued operation during the year, includes the following CGUs and associated allocated goodwill:
Goodwill 2025 £m
Goodwill 2024 £m
Cash generating units – discontinued operations
22.8 80.0
UK Escode
22.8 80.1
North America Escode
7.4
Europe Escode
7.1
Total Escode
110.2
110.0
Impairment review Goodwill is tested for impairment annually at the level of the CGU to which it is allocated. An impairment review was carried out at 30 September 2025. The recoverable amount of all CGUs was measured on a fair value less costs to sell basis. Capitalised development and software costs are included in the CGU asset bases when performing the impairment review. Capitalised development projects and software intangible assets are also considered, on an asset-by-asset basis, for impairment where there are indicators of impairment. Fair value less costs to sell The methodology described below has been applied consistently for the impairment reviews carried out as at 30 September 2024 and 30 September 2025. The recoverable amount of all CGUs has been determined on a fair value less costs to sell basis for the purposes of the impairment review. The valuation under FVLCTS is expected to exceed the valuation under VIU because uncommitted restructurings and resulting operating efficiencies are not considered within a VIU valuation in line with the requirements of IAS 36. 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. Estimated sustainable earnings have been determined taking into account a Board-approved forecast which considers past performance. The sustainable earnings used include expectations based on a market participant view of sustainable performance of the business based on market volatility and uncertainty as at the Balance Sheet date. The sustainable earnings input is a level 3 measurement; level 3 measurements are inputs which are normally unobservable to market participants. The Group incurs certain overhead costs in respect of support services provided centrally to the CGUs. Such support services include Finance, Human Resources, Legal, Information Technology and additional central management support in respect of stewardship and governance. In calculating sustainable earnings these overhead costs have been allocated to the CGUs based on the extent to which each CGU has benefited from the services provided. Commonly this is driven by time spent by the relevant central department in supporting the CGU, informed by headcount or where possible specific cost allocations have been made. The Adjusted EBITDA 1 multiple used in the calculations is based on an independent third party assessment of the implied enterprise value of each CGU based on a population of comparable companies as at the Balance Sheet date. The estimated cost to sell was based on other recent transactions that the Group has undertaken. Current year impairment The Board assessed the recoverable amount of each CGU using fair value less costs to sell as at 30 September 2025, applying the methodology described above. In all cases, the recoverable amount exceeded the carrying amount, and no impairment losses have been recognised for the year ended 30 September 2025. Current year sensitivity analysis – impairment The FVLCTS valuation of each standalone CGU has been calculated by determining sustainable earnings, based on Adjusted EBITDA¹, and applying a reasonable market multiple. The sustainable earnings figures include a key assumption regarding achieving forecast revenue within each CGU assessment. The Board has reviewed sensitivity analysis on the FVLCTS calculations for each CGU, considering reasonably possible changes in the key assumption of revenue. Assuming a 10% shortfall in forecast revenue (after factoring in controllable variable cost reductions and maintaining margins), no material impairment would arise.
NCC Group plc — Annual report and accounts for the year ended 30 September 2025 132
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