Netcompany posts solid Q1 growth with UK business stable

Denmark-headquartered IT consultancy Netcompany has announced solid results for Q1 2025 (ended 31st March 2025), with group revenue increasing 9% year-over-year in constant currency to DKK 1,744.3m and adjusted EBITDA climbing 25% ccy yoy to DKK 307.3m, representing a margin improvement of over 2 percentage points to 17.7% ccy.

During Q1, Netcompany announced the acquisition of SDC (a Scandinavian banking solutions provider) that will create a new combined company, fully owned by Netcompany: Netcompany Banking Services (see Netcompany acquires SDC to expand Nordic banking services). However, that’s yet to affect revenue results – with the transaction on schedule to be completed around mid-2025.

Netcompany’s UK operation delivered stable performance amid continued market challenges, with revenue of DKK 162.4m broadly in line with Q1 2024 (down just half a percent). Public Sector revenue showed a welcome return to growth (up 9% in the quarter to DKK 126.9m, coming off the back of a 12.1% fall across FY24 – see Netcompany up 7.4% overall in FY24, though contract delays dampen UK public sector), with the DALAS framework “slowly starting to show positive trends”. This suggestion of potential for increased activity in coming quarters is particularly significant, as Public Sector now represents 78% of Netcompany UK's revenue.

The company’s UK private sector business saw a 22.2% decline in Q1 2025 to DKK 39.6m (reversing the 10.6% growth trend it showed across FY24), largely due to the strategic discontinuation of historical low-margin contracts. However, this deliberate portfolio realignment in the private sector has yielded positive results for Netcompany UK, with gross profit margin increasing to 21.8% compared to 19% in the same quarter last year. Adjusted EBITDA margin also improved by 1.6 percentage points to 11.3%.

Despite the current macro-economic situation, Netcompany reiterated its FY revenue growth expectations of between 5% and 10%, and an adjusted EBITDA margin between 16% and 19%. For the UK business specifically, the improving margin profile and strategic focus on public sector work positions the operation well for profitable growth as the DALAS framework gains momentum throughout 2025.

Posted by: Craig Wentworth at 10:00

Tags: results   growth   frameworks