NCC Group plc has warned that it may be forced to make cuts, due to “market volatility” particularly in the North American technology sector.
The global operation, which has its worldwide headquarters in Manchester released a trading update to the London Stock Exchange this morning.
It has revised its operating profits from the £47m, which were announced in November to £28m to £32m.
“On this basis,” it stated. “The Group is scrutinising the underlying cost base and will take appropriate action in due course.
The statement explained that market volatility is having a “significant impact on our near-term cyber security revenue and profitability.”
This has been because buying decision delays and cancellations have been “exacerbated” by tech sector layoffs in North America.
Furthermore the failure of Silicon Valley Bank has caused “turmoil” in the banking sector and “knocked market confidence leading to reduced appetite to spend on technology projects across sectors.”
Finally it pointed to interest rate increases in both the US and UK.
All of these combined meant that it now expected growth in its Assurance (Cyber Security) division to be in “low single digits.” Growth in its Software Resilience (Escrow) business was however expected to remain on target.
“Macro-economic headwinds, market volatility and uncertainty are undermining business confidence, particularly in the technology sector where we are well represented, and as a result we are seeing demand fall in the form of projects being further delayed, reduced or cancelled,” said Mike Maddison, Chief Executive Officer.
“While we cannot control demand in the short term, the conditions we now face reinforce the rationale for our strategy, which I outlined in February. We remain confident that the Group’s strategy will deliver a more resilient business that is positioned to fully capitalise on opportunities to meet changing client needs in a dynamic Cyber market.”