REG - Northcoders Group - Government Contract Win and H1-23 Trading Update

NorthcodersAnnouncement

25/07/2023 07:00

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RNS Number : 0125H  Northcoders Group PLC  25 July 2023

 For immediate release  25 July 2023

 

 

Northcoders Group PLC

('Northcoders', the 'Group' or the 'Company')

 

Government contract win

H1-2023 Trading Update

 

Northcoders (AIM:CODE), the independent provider of training programmes for
software coding, is pleased to announce that the Group has been successful in
securing further funding from the Department for Education Skills Bootcamps
Wave 4 bid. In addition, the Group provides a trading update for the six
months to 30 June 2023 ('H1-2023' or the 'Period').

 

Contract win

 

The Group is pleased to announce that it has successfully secured further
funding from the Department for Education Skills Bootcamps Wave 4 bid. This
new round of funding provides Northcoders with a further £4.5 million to
train individuals on the Northcoders market-leading bootcamp and provides the
Company with strong revenue visibility for H2-2023 and FY-2024. In addition,
it also provides the Group with a 12.5% increase in funding per student which
is expected to increase the gross profit margins of the Group's training
products and assist in covering recent inflation-linked cost increases.

 

Trading update

 

H1-2023 Highlights:

 

·    Increase in H1-2023 revenue of over 50% in comparison with H1-2022

·    Good FY-2023 revenue visibility with further confirmation of Skills
Bootcamp funding and multiple corporate contracts in place

·    Strong balance sheet position with £2.9 million of cash and net cash
of £2.0 million as at 24 July 2023

·    Significant investment into sales, marketing and partnership
functions to ensure success against current economic backdrop

·    Tech Returners, which was acquired in February 2023, has now been
fully integrated into the Business Services division and is performing well.

 

The Group is trading comfortably in line with management expectations. Revenue
for the period increased by 52% to £3.5 million (H1-2022: £2.3 million).
As at 30 June 2023, revenue visibility for FY-2023 was £6.75 million, being
70% of the market expectations for the full year. As forecasted before the
start of the current financial year, it remains the Board's expectation that
FY-2023 revenues will be second half weighted.  Substantial business
development progress has been made by Northcoders towards the visibility of
H2-2023's revenue forecast.

 

In H1-2023 Northcoders' Business Solutions division secured a number of
significant new contracts with large corporate clients including Deutsche Bank
and BAE Systems. The Group also has confirmation of a repeat programme from
KPMG to begin during Q4-2023 and a healthy business development pipeline which
the Board is confident will further boost full-year revenue visibility during
the coming months. In addition, to strengthening corporate business, the
Business Solutions division has also secured its first public sector
consultancy contract with a major government department.

 

The Training Bootcamps division grew its graduate hiring network by a further
9% by engaging with 76 new organisations for the first time this year.
Northcoders now has a network of over 450 partner companies to sustain its
graduate hiring from training bootcamps. The Group has also seen increased
demand from individuals wanting to enrol on its core coding bootcamps and
Returner Programmes. Application numbers in the six months to June 2023 stood
at 3,494, which compares favourably with the 3,662 applications in the 12
months to December 2022.

 

Despite the positive momentum made by the Group in H1-2023, the current
financial year does present a number of market challenges that demand the
Board's full attention. The Group acknowledges the prevailing headwinds
encountered by the technology market, including budget constraints, workforce
reductions and recruitment freezes that is affecting many of the Group's
partner companies, which potentially might affect the vacancies available to
Northcoders Training Bootcamp graduates. The Board remains resolute in its
approach and continues to inject significant investment into the Group's
corporate sales and partnerships teams across all Northcoders' divisions. This
proactive measure signifies the Group's total commitment to ensuring
exceptional outcomes for the individuals engaged in its Training Bootcamps and
positions the Group favourably for continued growth within its consultancy
division, Business Services.

 

Outside of business development activity, the Group is making significant
progress with its investment into its Technology platform, Ncore, which
remains on track for roll-out across all its Training Bootcamps in early 2024.
 Ncore is expected to grow our capacity, increase gross profit margins in the
Group's Training Bootcamps division and bring multiple new ways of taking its
Training Bootcamp products to market, such as the part-time/distance learning
delivery of its courses.

 

The development of new training courses is going according to plan.
Northcoders' Cloud Engineering training course has been developed and launched
and the Group is pleased to see an increase in enrolment and employer
interest. Northcoders looks forward to providing more updates about training
course development and other strategic initiatives in the second half of the
year.

Northcoders' cash flow continues to benefit from the Department for
Education-funded scholarships being made available to those who previously
utilised the Group's finance provider, which had absorbed working capital. The
Group feels comfortable with current and forecasted cash positions and has the
cash available to continue with planned investments. Focus will be applied to
cashflow forecasting to ensure that the Group remains this way during
uncertain economic times.   The Group has a strong cash position with £2.9
million of cash and £2.0 million of net cash as at 24 July 2023.

Chris Hill, CEO of Northcoders, said: "In spite of challenging market
conditions, the Board is confident of achieving further growth for the full
year.  During the period Northcoders won a number of contracts with large
corporates as well as securing further funding from the Department for
Education, providing the Group with good forward visibility of revenues.
The Company is financially strong and we are well placed to further invest in
the business for growth."

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

- Ends -

 

 

 For further enquiries:

Northcoders Group plc                                        Via Buchanan
 Chris Hill, CEO                                              Tel: +44 (0) 20 7466 5000
 Charlotte Prior, CFO                                         investors.northcodersgroup.com (https://investors.northcodersgroup.com)

 WH Ireland Limited (Nominated Adviser & Joint Broker)        Tel: +44 (0)20 7220 1666
 Mike Coe / Darshan Patel / Sarah Mather (Corporate Finance)

 

Peterhouse Capital Limited (Joint Broker)  Tel: +44 (0) 20 7496 0930
 Martin Lampshire                           www.peterhousecap.com (http://www.peterhousecap.com/)
 Lucy Williams

Duncan Vasey

 Buchanan Communications                    Tel: +44 (0) 20 7466 5000
 Henry Harrison-Topham                      northcoders@buchanan.uk.com (mailto:northcoders@buchanan.uk.com)
 Jamie Hooper

 

 Peterhouse Capital Limited (Joint Broker)  Tel: +44 (0) 20 7496 0930
 Martin Lampshire                           www.peterhousecap.com (http://www.peterhousecap.com/)
 Lucy Williams

Duncan Vasey

 Buchanan Communications                    Tel: +44 (0) 20 7466 5000
 Henry Harrison-Topham                      northcoders@buchanan.uk.com (mailto:northcoders@buchanan.uk.com)
 Jamie Hooper

Notes to Editors

 

Northcoders is a market leading provider of technology training for businesses
and individuals with courses in, Software Engineering, Data Engineering and
Platform Engineering.  Founded in 2015, the Group's business model operates a
hybrid structure with a flagship site in Manchester and other sites in Leeds,
Birmingham and Newcastle supported by a proven digital offering to support
its students across the UK.

 

Powered by IP rich technology, Northcoders offers boot camp courses to
individuals from a range of backgrounds, delivered through virtual and
physical learning.  The Group also works with blue chip corporates across
multiple sectors to help them to achieve their digital requirements, with
teams as a service and to supply innovative solutions for the upskilling and
reskilling of employees. With a keen focus of inclusivity, diversity and
quality at its core, Northcoders aims to address the digital skills gap in the
UK to meet the increasing demand for digital specialists at all levels, from
businesses and public agencies.

 

Northcoders was admitted to trading on AIM in July 2021 with the ticker
CODE.L.  For additional information please visit
investors.northcodersgroup.com (https://investors.northcodersgroup.com) .

 

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