Northcoders reports ongoing growth in demand

Software coding training provider Northcoders reported “continued growth in demand” in a trading update on Tuesday, with 3,494 applications in its half-year, compared to 3,662 in the full year ended December.

The AIM-traded firm said it was trading “comfortably in line” with management expectations as to revenue, and ahead of expectations on underlying profitability.

Revenue for the six months ended 30 June rose to £2.3m from £1m year-on-year, with revenue visibility at period end being £5.4m for the full-year, representing 83% of 2022 market expectations.

“The strong performance of the group in the year to date gives the board confidence to invest additional funds in the second half of the year to support the anticipated growth in 2023, which is expected to result in the overall profitability for 2022 being in line with market expectations,” the directors said in their statement.

During the period, the group secured “multiple new contracts” in its corporate solutions division, with Rolls Royce and EMAC among others, and it received confirmation that its NHS Digital academy programme would start in September.

It said companies including On the Beach, Evri, HESA and Sky Bet also started their digital training programmes with Northcoders during the first half.

“Northcoders' cash flow has benefited from the Department for Education-funded scholarships being made available to those who previously utilised the company's finance provider, which had absorbed working capital.

“Therefore, the company has used this as an opportunity to accelerate investment plans in its learn-to-code platform, which will automate learner enrolment in its courses and lead to a substantial saving in staff costs in the learner admissions team.

“Even while the learn-to-code platform is in its infancy, the company is already yielding staff-saving benefits.”

At 1400 BST, shares in Northcoders Group were up 0.87% at 232p.

Reporting by Josh White at Sharecast.com.