Software Resilience revenue analysis – by service:
% change at actual rates
% change at constant
2022 £m 38.1 18.2
2021 £m
currency 1
Software Resilience contracts
24.0 58.8% 60.1% 12.6 44.4% 45.6%
Verification services
Total Software Resilience revenue
56.3
36.6 53.8% 55.1%
Analysing the service performance, contracts increased by 60.1% at constant currency 1 (58.8% at actual rates) and verification services increased by 45.6% at constant currency 1 (44.4% at actual rates). Software Resilience revenue analysis – by service excluding the IPM acquisition:
% change at actual rates
% change at constant
2022 £m 22.6 13.5
2021 £m
currency 1
Software Resilience contracts
24.0 (5.8%)
(5.0%)
Verification services
12.6
7.1% 8.0%
Software Resilience revenue excluding the IPM acquisition
36.1
36.6 (1.4%)
(0.6%)
Excluding the effect of the IPM acquisition, contracts declined by 5.0% on a constancy currency basis 1 (5.8% at actual rates) due to UK and US contract performance and verification services increased by 8.0% at constant currency 1 (7.1% at actual rates). Gross profit and margin are analysed as follows:
2022 £m
2022 % margin
2021 £m
2021 % margin
% pts change
17.7 69.7% 19.8 73.9% 2.8 68.3%
UK
18.4 73.0% (3.3% pts) 4.9 67.1% 6.8% pts 2.9 70.7% (2.4% pts)
North America
Europe
Software Resilience gross profit and % margin
40.3 71.6%
26.2 71.6%
–
Gross profit has remained flat following the higher margins obtained from the IPM acquisition trade offset by investment to address historical execution challenges and enable Software Resilience to achieve sustainable revenue growth.
Individually Significant Items During the year, the Group has incurred £0.9m (2021: £7.6m) relating to the acquisition of the IPM business completing on 7 June 2021, bringing total acquisition costs (excluding share placing costs of £2.4m) to £8.5m. In the prior year, Individually Significant Items also included £5.1m relating to configuration and customisation costs associated with the Group’s SGT transformation programme. For further detail, please refer to Note 5 to the consolidated Financial Statements. Finance costs Finance costs for the period were £3.7m compared to £2.5m in 2021 due to an increase in borrowing costs following the IPM acquisition. Finance costs include lease financing costs from IFRS 16 of £1.2m (2021: £1.2m). Taxation The Group’s effective statutory tax rate is 25.8% (2021: 32.4%). The Group’s adjusted tax rate is 24.5% (2021: 27.0%). The effective rate remains above the UK standard rate of corporation tax, reflecting the origin of a reasonable proportion of Group profits in overseas territories with higher tax rates than the UK and the derecognition of certain deferred tax assets.
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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