Half-year Results

Northcoders (AIM:CODE), a UK market leading technology training business, is pleased to announce its results for the six months ended 30 June 2025 ('H1 2025' or the 'Period').

Financial Highlights

• Reported revenue of £3.7 million (H1 2024: £4.4 million)
• Gross margin remained at 67% (H1 2024: 67%)
• Expenditure/ group overheads down 20% year-on-year at £2.1million (H1 2024: £2.5 million)
• Underlying adjusted EBITDA of £0.4 million (H1 2024: £0.4 million) with an increased EBITDA margin of 11% (H1 2024: 10%)
• Adjusted EPS 1.28 pence (H1 2024: 2.58 pence)
• Strong balance sheet with net cash of £0.9 million (H1 2024: £0.7 million) excluding lease liabilities, and gross cash of £2.3 million (H1 2024: £1.3 million) following NatWest refinance.

Operating Highlights

• Our B2B Counter® consultancy division expanded contracts within Skipton Building Society, Manchester Airport Group and a major UK Government department
• UK Government funding remains unpredictable as more changes to internal departments are announced
• Group awarded OFSTED ('Office for Standards in Education, Children's Services and Skills') 'Outstanding' across all areas, making Northcoders in the top 6% of higher education providers nationally
• Next Gen Data & AI Course launched with 100% private funding
• 24 seats secured for Lancashire Skills Bootcamp funding in the Training Bootcamps division.

Current trading and outlook

• Counter® secures new £0.5 million contract with leading provider of business management software
• The Group continues to carefully monitor overheads to align with Group revenue and take swift action in response to the unpredictable UK training landscape whilst focusing on quality client outcomes
• AI and digital transformation are rapidly reshaping the workforce driving corporate demand for senior technologists
• Charlotte Prior, CFO, has notified the Board of her intention to step down as CFO and as a Director of the Company with effect from 6 April 2026.

Chris Hill, CEO of Northcoders, commented:

"In a dynamic landscape where digital transformation is a necessity, Northcoders continues to demonstrate its leading market reputation. Whilst navigating a challenging UK Government funding environment for our B2C operations, we have delivered stable profitability, which is testament to our robust operational efficiencies and the scalable power of our NCore platform.

"The immediate environment remains challenging, with regional funding delays expected to affect H2 2025 revenues with 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, will enable Northcoders to capitalise on significant long-term opportunities in technology skills and services with an agile and innovative approach, as the Group continues to create life-changing opportunities for individuals from all walks of life and delivering greater value for our shareholders"

Investor Meet Company presentation

Northcoders will be presenting via the Investor Meet Company platform today at 12:00 p.m. (BST). The meeting will be hosted by Chris Hill (CEO) and Charlotte Prior (CFO), and there will be an opportunity for Q&A at the end of the session. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9.00 a.m. the day before the meeting or at any time during the live presentation. To sign up to the Northcoders Group presentation via Investor Meet Company please click the following link:

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

Group Statement of Comprehensive Income

For the period ended 30 June 2025

Notes to the Interim Statements

For the period ended 30 June 2025

General information

Northcoders Group Plc is a public company limited by shares incorporated in England and Wales. The registered address of the Company is Bloc, 17 Marble Street, Manchester, United Kingdom, M2 3AW. The consolidated financial statements (or "financial statements") incorporate the financial statements of the Company and entities (its subsidiaries) controlled by the Company (collectively comprising the "Group").

The principal activity of the Group is the provision of digital training courses.

Accounting policies

2.1. Basis of preparation

The financial information set out in these interim consolidated financial statements for the six months ended 30 June 2025 is unaudited. The financial information presented are not statutory accounts prepared in accordance with the Companies Act 2006, and are prepared only to comply with AIM requirements for interim reporting. Statutory accounts for the year ended 31 December 2024, on which the auditors gave an audit report which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

The interim consolidated financial statements have been prepared using consistent accounting policies as those adopted in the financial statements for the year ended 31 December 2024.

The interim consolidated financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these interim consolidated financial statements are rounded to the nearest £1.

2.2. Basis of consolidation

The Group financial statements consolidates those of the parent company and the subsidiaries of which the parent has control. Control is established when the parent is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.

Where a subsidiary undertaking is acquired/disposed of during the year, the consolidated profits or losses are recognised from/until the effective date of the acquisition/disposal, being the date on which control is obtained or lost.

All inter-company balances and transactions between group companies have been eliminated on consolidation.

The Group applies the acquisition method of accounting for business combinations enacted after the date of creation of the Group, as detailed further below. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair value of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquired subsidiary's financial information prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.

2.3. Going concern

As at 30 June 2025 the Group had significant net assets and cash.

In preparing the interim financial statements, the directors have considered the principal risks and uncertainties facing the business, along with the Group's objectives, policies and processes for managing its exposure to financial risk. In making this assessment the directors have prepared cash flows for the foreseeable future, being a period of at least 12 months from the expected date of approval of the interim financial statements.

Forecasts are adjusted for reasonable sensitivities that address the principal risks and uncertainties to which the Group is exposed, thus creating a number of different scenarios for the board to challenge including "stress" case scenarios. Overall the directors do not believe that the outcomes of such testing gives rise to a material uncertainty around going concern.

At the time of approving the interim financial statements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the interim financial statements.

2.4 Revenue

· For consumer training bootcamps, income is received in advance of the service being provided and is recognised on a pro-rata basis across the course delivery, based on delivery dates for those courses. Apprenticeship income is a funding mechanism for the consumer revenue stream. The Group receives lump-sum drawdowns at regular intervals, which typically are billed in arrears resulting in accrued income. In addition the Group receives a contingent success fee, payable at the end. The Company makes an assessment of the probability of success and accrues this on a percentage of completion basis as the course progresses.

• For Business Solutions, amounts are invoiced in arrears for development work performed along with any associated costs, based on the number of hours spent on each contract at agreed contractual rates for those delivering the course. Where appropriate, any amounts to be invoiced are recognised as accrued revenue, and any amounts invoiced in advance are recognised as deferred revenue, in line with performance obligations per contracts with customers.

Determining the transaction price

Allocating amounts to performance obligations

2.5 Development assets

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Development costs incurred are capitalised after the point at which the commercial and technical feasibility of the product have been proven, and the decision to complete the development has been taken and resources made available. The expenditure capitalised is solely the cost of direct labour. Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.

Licence 4 years straight line

Technology 5 years straight line

Development costs 10 years straight line

Brand 6 years straight line

Customer relationships 6 years straight line

Customer contracts 6 years straight line

Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

The Directors use adjusted earnings before exceptional costs and share based payment expenses. This creates an alternative performance measure which the Directors believe reflects a fair estimate of ongoing profitability and performance. The calculated Adjusted Earnings for the current period of accounts is as follows: