U.K. Software Security Company NCC Plunges on Contract Losses

Shares were down 34 percent to 227p at 09:33 a.m. in London trading. “Adverse developments in the Assurance Division will have an impact on profitability between the first and second half of the year,” the company said in a statement, cautioning that it is too early to quantify the financial impact. NCC was formed in 1999 when the not-for-profit National Computing Center, established by the U.K. government to encourage personal computer use, sold its commercial arm to its management team. Thursday’s drop follows the resignation of CFO Atul Patel in August, a surprise announcement that sent the shares lower on the day by 13 percent. Since then the company has continued its strategy of buying up smaller operators, including the purchase of Silicon Valley-based Payment Software Co. for $18.75 million. The “icebergs” identified by NCC must be navigated in order for the company to meet full-year expectations, Shore Capital Group Ltd. analysts  Robin Speakman and Ben McSkelly said in a note. Shore subsequently placed NCC’s ‘buy’ rating under review, while broker N+1 Singer cut the company from buy to hold. NCC sought to reassure investors, saying its forward order books and renewals are 71.9 million pounds higher than this time last year. “The Group is taking necessary action to mitigate developments,” the statement added. © 2016 Bloomberg L.P