Latest Results

Introduction

The Board is pleased to present the Group’s results for the six months ended 30 June 2025 (‘H1 2025’). The Group achieved stable profitability, underpinned by cost control and further efficiencies delivered through our proprietary learning platform, NCore. This performance reflects Northcoders’ growing reputation for high-quality technology education and its pivot to B2B consultancy, while the strengthening of internal platforms continues to support scalable delivery with reduced staff cost.

Financial performance remained resilient despite a softer revenue environment, with reported revenue of £3.7 million (H1 2024: £4.4 million).  Gross margin was maintained at 67%, while underlying adjusted EBITDA held steady at £0.4 million, with EBITDA margin increasing to 11% (H1 2024: 10%).  Adjusted EPS was 1.28 pence (H1 2024: 2.58 pence).  The balance sheet strengthened further, supported by the NatWest refinance, with net cash of £0.9 million (H1 2024: £0.70) excluding lease liabilities, and gross cash of £2.3 million at period end (H1 2024: £1.3 million).

Operational review

As government funding for training bootcamps becomes more unpredictable, the Group has acted promptly to regain control of its revenue model and strategic vision. Instead of awaiting clarity on future frameworks, Northcoders is proactively repositioning its B2C training business and boosting the growth of Counter®, its B2B challenger consultancy brand, enabling the Group to protect its assets and refocus capacity and capability to Counter®.

Through the Northcoders brand, the Group has established an excellent reputation for quality and results, recently strengthened by an ‘Outstanding’ OFSTED rating. Tech Returners has developed a proven model for supporting career changers and returners, a group often overlooked in the technology sector but essential for increasing diversity and meeting the demand for experienced engineers. Counter® combines these strengths within a disruptive model that challenges the outdated traditional hire-train-deploy offering and large-scale consulting business model.

By offering clients blended teams of highly skilled engineers either from Northcoders’ Alumni, or other highly qualified engineers who will transition to become highly effective Counter® technology engineers and consultants, that transition to the client at the end of an assignment creating long-term value.  Supported by Northcoders' training expertise and Tech Returners' access to overlooked talent, Counter® provides a more cost-effective, higher-quality alternative to both existing and traditional providers.

The Board believes that this approach pivots the Group towards the current demands of the technology sector and away from a very unpredictable public funding arena which demands a high fixed cost base to operate following the Government’s recent changes.  Demand for mid-level and senior technologists remains strong, while AI and digital transformation are rapidly reshaping the workforce.  The Group's operations and strategy are evolving to keep pace with these changes by integrating AI-enabled practices into both our training modules and the delivery of Counter's assignments.  These initiatives ensure that Northcoders-trained engineers are equipped not only with current core skills but also with the tools needed to thrive in the changing digital landscape.  By aligning our model with these trends, the Group is confident it will develop a leaner, higher-margin business that is less dependent on public funding and better aligned to creating shareholder value.

Counter® has made encouraging progress, expanding existing engagements with Skipton Building Society, Manchester Airport Group and a major governmental department while building a growing pipeline of exciting prospects across both the private and public sectors.  Counter® has now moved beyond pilots into longer term assignments, with a significant new contract secured post period end with a leading technology platform provider in the SaaS sector, a new vertical for the Group sitting outside of financial services, aviation and central government.  Investment has also been made into strengthening Counter®’s engagement and project success team to ensure excellence in delivery, reflecting the growth of current client accounts and enhancing the probability of securing return customers alongside a growing pipeline of new client prospects.  In addition, frameworks such as G-Cloud, are enabling the Counter® engagement team to uncover new opportunities across both private and public sector while strengthening the longevity of current client relationships.

In parallel, the Group has taken further steps to reduce its fixed cost base and strengthen its financial resilience.  The Board has adopted a disciplined stance on overheads and non-essential expenditure, while ensuring the organisation retains sufficient agility to respond quickly to new opportunities.  These actions are designed to align the business to current market conditions while protecting the Group’s ability to capitalise on growth opportunities as they become available.

The Board is also focused on securing further Skills Bootcamp funding and has a high level of confidence in future outcomes, based on live conversations and bids in progress.  We secured 24 seats under the Lancashire Skills Bootcamp funding initiative and outcomes across the board remain excellent, with 99% of students completing their courses and securing an interview with a potential employer or moving on to self-employment.

Looking ahead, Skills Bootcamp contracts are expected to be deployed more selectively, as a strategic mechanism to support Counter’s® expansion into new disciplines and geographies.  Furthermore, we successfully launched the Next Gen Data & AI course, fully funded through private sources.

Financial Review

Northcoders delivered a solid performance in the Period, generating underlying adjusted EBITDA of £0.4 million (H1 2024: £0.4 million), with EBITDA margin improving to 11% (H1 2024: 10%).  This reflects the continued efficiencies achieved through the Group’s core learning platform, NCore, and disciplined cost management.

Revenue for the Period was £3.7 million (H1 2024: £4.4 million), with the remaining Skills Bootcamp seats being the principal contributor and with a growing contribution from Counter.

Gross margin was maintained at a strong 67% (H1 2024: 67%).  Adjusted earnings per share were 1.28 pence (H1 2024: 2.58 pence).  Expenditure/ group overheads are down 20% year on year at £2.1million (H1 2024: £2.5 million), with a further reduction expected in FY 2025 and 2026.

The balance sheet strengthened further, with period-end cash of £2.3 million (H1 2024: £1.3 million), following the successful NatWest refinance, providing the Group with greater financial flexibility to support future growth.

CFO succession

In addition, the Board announces that Charlotte Prior, Chief Financial Officer, has notified the Board of her intention to step down as Chief Financial Officer and as a Director of the Company with effect from 10 April 2026 for personal reasons.  Charlotte will oversee the completion of the current financial year as well as providing an orderly handover of CFO duties to her successor.

The Board will shortly initiate a succession plan and a further announcement regarding this plan will be made in due course.

Outlook

The immediate environment remains challenging, with regional funding delays affecting H2 2025 revenues and non-recurring costs expected in the second half of 2025.  Although we expect the second half of the year to be weaker than the first, the Group's strong cash position, proven ability to adapt, and commitment to disciplined execution provide a solid foundation for future growth and a return to profitability in 2026.

The Board is confident that the decisive steps being taken now, repositioning bootcamps and training delivery predominantly to support Counter® recruitment, enhancing the Tech Returners programme to achieve the same goal, able to deliver local bids where needed and accelerating Counter®.  This will enable Northcoders to capitalise on significant long-term opportunities in technology skills and services with an agile and innovative approach to current organisational solutions, while continuing to create life-changing opportunities for individuals from all walks of life and delivering greater value for our shareholders.

Chris Hill
Chief Executive Officer

30 September 2025