Government Funding and Trading Update

Northcoders (AIM:CODE), a market leader in technology training in the UK, today provides a Government funding and trading update.

On 25 April 2025, the Group confirmed that Government funding would move to a fully regional model whereby Skills Bootcamp programmes would be funded via localised structures.

It had been anticipated that many of the regional authorities would have made funding awards by this time, however, while multiple bids remain pending, several regional authorities have yet to issue tenders or confirm exact future funding allocations. We continue to receive updates suggesting delays, rather than cancellations.

We remain confident in the long term funding outlook due to our proven track record and reputation in the market, as evidenced by our recent OFSTED Outstanding accreditation and the demand for high quality Northcoders' graduates. Additionally, Skills England has highlighted several structural trends that strongly align with Northcoders' business and diversified delivery model: a shift towards modular, flexible and shorter-form training; increasing demand for AI and digital skills; and a growing preference among SMEs for fast-track upskilling programmes.

However, until greater clarity emerges, we cannot accurately predict the timing of income from Government-backed contracts. As a result, the Group expects revenue and profitability to be unpredictable for the remainder of the current year and we are therefore unable, with confidence, to support current market expectations.

Our B2B Counter® consultancy division continues to make positive progress, on which we look forward to updating the market in our upcoming trading update. Additional investment continues in areas such as AI, data engineering, corporate training solutions and adaptable learning models that meet the evolving needs of learners and employers.

In addition, the Group has taken decisive steps to control costs where possible. These include a reduction in annualised fixed costs of approximately £3.25 million, representing a 40% decrease on 2024's reported cost base. Cost reductions have been strategically planned to reduce risk while still allowing for continued investment into core areas of long-term growth and help, where possible, to protect gross margins. The Company's current cash balance is £2.25 million.

We remain confident in maintaining our positive cash position. The Group's existing £10 million contract with the DfE, which concludes later this year, continues to provide a solid foundation for the Group and helps offset some of the near-term headwinds, generating cash for many months ahead.

Chris Hill, Chief Executive Officer, commented:

"We are pleased with the continued progress made in diversifying Northcoders revenues whilst the Government funding transition takes place. However we are deeply frustrated by the delays, and believe that ultimately they are impacting the delivery of vital digital skills in the UK workforce. We remain confident that clarity regarding digital skills funding, which remains high on the Government's agenda for national growth, will crystallise soon and that our blend of technical excellence, strong employer relationships and new growth areas like Counter® will leave us in a stronger position once the landscape settles. Ultimately, we remain entirely aligned with the long-term direction of travel - skills, digital and AI remain core national priorities. Northcoders is exceptionally well positioned to deliver future growth in these areas.

"I want to thank our team for their continued energy and resilience during this period. We have taken difficult but necessary steps to manage our cost base while continuing to invest in the areas experiencing strong demand, for example AI training, and in scaling our Counter consultancy division. The Board believes that these investments, along with the strength of our brand, operational capabilities and quality assurance, position us well for recovery and long-term success once the funding environment stabilises."

For further enquiries: Northcoders Group plc Via Burson Buchanan Chris Hill, CEO Tel: +44 (0) 20 7466 5000 Charlotte Prior, CFO investors.northcodersgroup.com Zeus (Nominated Adviser & Joint Broker) Tel: +44 (0) 20 3829 5000 Mike Coe / Darshan Patel (Investment Banking) Fraser Marshall / George Krokos (Sales) Peterhouse Capital Limited (Joint Broker) Tel: +44 (0) 20 7496 0930 Martin Lampshire www.peterhousecap.com Lucy Williams Duncan Vasey Burson Buchanan Tel: +44 (0) 20 7466 5000 Henry Harrison-Topham northcoders@buchanan.uk.com Steph Whitmore Jesse McNab www.bursonbuchanan.com