Goodwill carrying value (Recurring item: see Note 11 to the Financial Statements) The Group has significant balances relating to goodwill as at 30 September 2025 as a result of acquisitions of businesses in previous years. The carrying value of goodwill at 30 September 2025 is £46.3m (30 September 2024: £156.5m). Goodwill balances are tested annually for impairment. The Group allocated goodwill to cash generating units (CGUs) which represent the lowest level of asset groupings that generate separately identifiable cash inflows that are not dependent on other CGUs. The Group completed its annual impairment review as at 30 September 2025 and concluded that no impairment of goodwill balances was required. Fair value less costs to sell In accordance with IAS 36, during 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 the CGU. The FVLCTS valuation of each standalone CGU has been calculated by determining sustainable earnings, which are based on Adjusted EBITDA 1 , and applying a reasonable market multiple on the calculated sustainable earnings. Estimated sustainable earnings have been determined taking into account past experience and includes expectations based on a market participant view of maintainable performance of the business based on market volatility and uncertainty as at 30 September 2025. The sustainable earnings input is a level 3 measurement; level 3 measurements are inputs which are normally unobservable to market participants. The sustainable earnings figures used in this calculation include key assumptions regarding sustainable revenues and costs for the business. If the assumptions and estimates used in this valuation prove to be incorrect, the carrying value of goodwill may be overstated. During this year, the Committee has reviewed the Group’s latest available forecasts, along with its ongoing execution of the new strategy and management’s future action plans, as part of its consideration of the utilised sustainable earnings figures. 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. This allocation is primarily based on the time spent by the relevant central department in supporting each CGU, informed by headcount or another reasonable proxy where available. Where possible, specific cost allocations have been applied. The methodology remains consistent with the prior period to ensure the allocation reflects the Group’s operating model. The Adjusted EBITDA 1 multiple used in the calculations is based on an independent third party assessment of the implied enterprise value (from a market participant perspective as at 30 September 2025) of each CGU based on a population of comparable companies and precedent transactions. The estimated cost to sell was based on other recent transactions that the Group has undertaken. The Committee reviewed the FVLCTS calculations, including the sustainable earnings assumptions and the applied multiple. This review considered independent third-party valuations as at 30 September 2025, which reflect a market participant view of business performance in light of prevailing market volatility and uncertainty.
Impairment conclusions The Committee assessed the recoverable amount of each CGU using fair value less costs to sell as at 30 September 2025, after applying the methodology described above. The Committee concurred with management’s view that, in all cases, the recoverable amount exceeded the carrying amount and, accordingly, no impairment losses were recognised for the year ended 30 September 2025. Sustainable earnings include a key assumption regarding the achievement of forecast revenue within each CGU assessment. The Committee reviewed the sensitivity analysis prepared by management, focusing on reasonably possible changes to this key revenue assumption. In particular, the Committee considered the impact of a 10% shortfall in forecast revenue (after factoring in controllable variable cost reductions and maintaining margins) and concurred with management’s view that, under this scenario, the recoverable amount of each CGU would continue to exceed its carrying amount, and no material impairment would arise. Discontinued operations and held-for-sale classification (New item: see Note 16 to the Financial Statements) Held-for-sale classification Under IFRS 5, a disposal group is classified as held for sale when management is committed to a plan to sell, the asset is available for immediate sale in its present condition, the sale is highly probable and expected to complete within 12 months, and the disposal group is measured at the lower of its carrying amount and fair value less costs to sell. During the year, the Group committed to a plan to dispose of its Escode business, which met the above criterion and has therefore been classified as held for sale as at 30 September 2025. Management determined the sale to be highly probable and expected to complete within 12 months. Accordingly, assets of £198.0m and associated liabilities of £39.8m relating to the Group’s Escode business have been presented as held for sale as at 30 September 2025. The Committee reviewed and concurred with management’s assessment of the held-for-sale classification, including the appropriateness of the measurement basis and related disclosures. Discontinued operations Under IFRS 5, a disposal Group is classified as a discontinued operation when: • It is a component of the entity • It has either been disposed of or is classified as held for sale • It represents a separate major line of business or geographical area of operations, or is part of a single co-ordinated plan to dispose of such a component Escode represents a major line of business within one of the Group’s two reportable segments, contributing 21.8% of Group revenue (2024: 20.3%) and 35.0% of Group gross profit (2024: 34.0%). Given Escode also met the criteria for classification as held for sale at 30 September 2025 (as described above), the Committee reviewed and concurred with management’s assessment that the requirements for discontinued operations were satisfied as at 30 September 2025, including the adequacy of all related disclosures.
1 A djusted EBITDA are Alternative Performance Measures (APMs) and not IFRS measures. See unaudited Appendix 1 and the Financial Review 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 73
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