LONDON: In a strategic move, Kelso Group, a prominent acquisition vehicle listed on the main market, has announced the purchase of an additional 700,000 ordinary shares in NCC. This acquisition, following an initial share purchase in October 2023, brings Kelso’s total holdings to 2.2 million shares, averaging a cost of 117p each.

NCC, known for its two independent core businesses in software escrow and cybersecurity, has seen increasing regulatory demand for its software escrow services—Escode. Escode safeguards the core software code of companies against third-party supplier failures.

The value of Escode, a global leader in software escrow, has been underscored at the recent NCC capital markets presentation at the London Stock Exchange on April 25, 2024. With over 14,000 clients, including 57% of the Fortune 500 and 40% of the Forbes 2000, Escode reported a 2023 revenue of £64.3 million and an EBIT of £30.8 million. Its market dominance, high client retention, and long-term contracts contribute to its robust earnings profile, further bolstered by regulatory changes in finance and infrastructure sectors.

Kelso is optimistic about the upcoming Cybersecurity capital markets day on June 20, 2024, following the Cybersecurity division’s reported revenue of £270.8 million and an EBIT of £6.9 million as of May 31, 2023. Despite a market pullback, NCC’s interim results in January 2024 aligned with market expectations, signaling a promising turnaround.

Kelso’s confidence in NCC’s potential is evident, as it considers the company’s aggregate value to surpass its current market capitalization significantly. The management’s clear strategy and efforts to engage shareholders have been commended, reflecting a positive trajectory for NCC’s future.

John Goold, CEO of Kelso, commented: “Well executed capital markets days are a vital part of any listed company’s investor relations strategy, allowing holders and non-holders to deepen their knowledge. Last week’s presentation of Escode allowed investors to hear from the senior management within the business and also one long term customer, NatWest Bank. We look forward to the Cybersecurity division capital markets day in June.”

Kelso Group Holdings acquires 1.0 million shares at an average price of 108p in NCC