11 Goodwill and intangible assets continued Fair value less costs to sell continued Prior period impairment
In the prior period the Board assessed the recoverable amount of the North America Cyber Security CGU based on its FVLCTS as at 31 May 2024 as described above. Based on that assessment, the carrying amount of this CGU exceeded its recoverable amount and therefore an impairment loss of £31.9m was recognised, reducing the value of goodwill allocated to this CGU to £nil. This impairment relates to our North America Cyber Security business, as the recovery in demand was less consistent than expected. This amount was recognised as an Individually Significant Item (see Note 4). The impairment charge recognised resulted in a reduction in the carrying value of goodwill only. Prior period sensitivity analysis – impairment 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 a sustainable gross margin percentage for the business. The table below shows the sensitivity of headroom to reasonably possible changes in the key assumptions, by reflecting the additional impairment that would have been required from a decrease in gross margin of 0.5 percentage points. This additional impairment would have been after the £31.9m impairment in the North America Cyber Security CGU during May 2024. As goodwill has been impaired to £nil, any further impairment would be applied to other assets allocated to the CGU.
Decrease in gross margin of 0.5 percentage points £m
CGU
North America Cyber Security
2.9
As the goodwill in the North America Cyber Security CGU was fully impaired as at 31 May 2024, no further sensitivity analysis was provided as at 30 September 2024. With the exception of the North America Cyber Security CGU, the Board did not identify any reasonably possible changes in the key assumptions that would cause the carrying values of the other CGUs to exceed their respective recoverable amounts at 30 September 2024. Prior period goodwill reallocation During June 2024, as part of the expected disposal of the Fox Crypto B.V. entity, the Group reorganised its reporting structure to separate out the Fox Crypto entity from the Europe Cyber Security CGU. On this basis the Europe Cyber Security goodwill was reallocated between the newly created Fox Crypto CGU and the remaining Europe Cyber Security CGU. Goodwill was reallocated based on relative values of the two CGUs, but having made adjustment to reflect that the Fox Crypto CGU is less asset intensive than the remaining Europe Cyber Security CGU. The value of each CGU was based on FVLCTS. For the Fox Crypto CGU, the FVLCTS was based on the expected consideration to be received on disposal (see Note 18 of the 2024 Annual Report and Accounts) of this business less estimated selling costs. For the remaining Europe Cyber Security CGU the fair value was calculated using a methodology consistent with that used in the goodwill impairment review and described above. Based on this assessment, goodwill of £51.9m was reallocated to the Fox Crypto CGU, leaving £2.2m as reallocated to the EU Cyber Security CGU. Goodwill reallocated to the Fox Crypto CGU was reclassified to assets held for sale (see Note 16). There was no change in the allocated
goodwill following completion of the disposal in the current year. Prior period sensitivity analysis – goodwill reallocation
The FVLCTS valuation of each standalone CGU was calculated by determining sustainable earnings, which were 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 included a key assumption regarding forecast revenue for the business. The table below shows the sensitivity of the goodwill reallocation to reasonably possible changes in the key assumptions, by reflecting the additional goodwill that would have been allocated to the Europe Cyber Security CGU from an increase in revenue of 5% with no increased costs. This additional goodwill would be after the allocation of £2.2m of goodwill to the Europe Cyber Security CGU.
5% increase in revenue £m
CGU
Europe Cyber Security
13.3
1 A djusted EBITDA is an Alternative Performance Measure (APM) and not an IFRS measure. See Appendix 1 for an explanation of APMs and adjusting items, including a reconciliation to statutory information.
NCC Group plc — Annual report and accounts for the year ended 30 September 2025 133
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