FTSE 250 cybersecurity consultancy NCC (NCC) lost 40% of its market value after slashing annual guidance for the year to 31 May 2023 last week (31 Mar). The company had anticipated ‘adjusted operating profit’ of around £47 million, it’s now looking at between £28 million and £32 million. No wonder the share price was hammered, plunging roughly 60p to 94p.NCC claims that ‘market volatility has materially increased’, slowing corporate decision-making and delaying orders. NCC also claims that tech industry layoffs and turmoil in the banking sector post-SVB has seen cybersecurity projects canned or delayed, while inflation and higher interest rates continue to pressure IT budgets.

All of these claims are feasible, yet it does beg the question why these industry wide factors do not seem to be hurting the large US cybersecurity companies that dominate the industry.

Newsflow has been largely upbeat year to date from the likes of Palo Alto (PANW:NASDAQ), Crowdstrike (CRWD:NASDAQ) and Fortinet (FTNT:NASDAQ), with the latter pair both beating forecasts in recent weeks. This will only add to the argument that UK cybersecurity is sub-scale and the likes of NCC simply not as crucial to clients as they would like to be.

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