UK-based infosec consultancy NCC Group is withdrawing from the domain services biz while retaining domain security capability.
The tactical switch was announced as NCC reported revenues up 56 per cent to £209.1m in the 12 months to 31 May 2016, compared to £133.7m in its previous financial year.
NCC’s adjusted pre-tax profits rose to £37.0m in 2016 compared to £29.5m before £18.9m in exceptional charges. The bulk of these charges stem from NCC’s exit from the domain service business, resulting in an exceptional charge of £13.7m.
The decision to exit domain services was taken following a strategic review, which concluded competing in the segment was holding NCC back and it would do better to focus on more profitable assurance (information security and security consulting) and escrow operations, as an NCC statement explains:
The Group continues to believe that safe, controlled open or branded domains will play a major part in the Internet landscape in the years to come, but has recognised that other opportunities will provide a faster return on Group assets and investments.
Despite this withdrawal, NCC will “maintain and continue to publish the .trust security standards since these are fundamental to a safer Internet regardless and will continue to use .trust as the Group’s domain.”
“It is clear that the open generic domains and city codes have not been taken up by businesses and consumers as well as expected with all of these falling well short of their initial registration targets,” NCC explains. “Coupled with the fact that the branded domains are still either undelegated or those that are, are unused, it is clear that the market is not ready for the very necessary changes that need to happen to strengthen security on the internet.”
Scores on the doors
NCC’s full year results (pdf) are its first since it acquired Fox-IT, which is well known for its forensics and incident response capabilities. NCC said the integration is on track, with a global roll-out of services planned for the year ahead.
Rob Cotton, NCC Group chief executive, gave an upbeat summary of the security consultancy’s business.
“This has been a year of notable progress for the business. We fully integrated Accumuli [a managed security services business], considerably expanded our capabilities with the acquisition of Fox-IT and delivered a significant increase in earnings, up 19 per cent – and increased dividends by 17 per cent, a 12 year CAGR of 25 per cent.”
Cotton added that economic uncertainty over the Brexit process is unlikely to impact NCC’s business, which is driven by demand from corporate to fight the growing threat posed by cybercriminals.
“The cybercrime arms race is the single biggest threat to corporates and individuals globally particularly as cybercrime is not bound by national borders or political and trade treaties.,” Cotton commented.
“Regardless of when or how the various negotiations develop with the EU, if the UK wants to trade with the EU on equal terms, UK data protection standards will have to be equivalent to the EU’s General Data Protection Regulations. For the UK to do business with the EU, or any other country for that matter, it is vital that data protection standards and legislation is of the highest order,” he added. ®