NCC flotation on AIM reduces its debt to £4m

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Shares in NCC, the Manchester-based, software-support group, got off to a confident start yesterday on London's AIM market, ending the day at 176.5p against a 170p placing price.

The group, which provides IT assurance, security and consultancy services, raised £21.4m in new money from the flotation to reduce substantially its debt level to around £4m.

NCC's directors and employees will retain a 21 per cent stake post flotation, with none of them selling shares in the issue. Rob Cotton, the chief executive, said the flotation, "enables us to raise significantly the profile and value of our IT services". He is confident NCC, "will continue to deliver another year of good growth".

Analysts cited the strong growth potential for NCC's main revenue earner - support for companies that purchase tailor-made software for their businesses. For an annual fee NCC keeps a copy of the source code to provide a backup in case the original supplier goes into liquidation, or is otherwise unable to continue maintenance.

The collapse of 18 software suppliers in the past 18 months has illustrated the value of this service and analysts consider this is the reason behind NCC's strong showing. NCC also has a testing and consultancy division. The former provides security services for company websites and intranets whilst the latter gives IT solutions to mainly public-sector clients.