Northcoders has reported a challenging trading year after major changes to the UK Government’s skills funding system led to a sharp fall in funded learners across the sector.
The AIM-listed technology training and consultancy group posted unaudited revenue of £5 million for 2025, down from £8.8m the previous year.
It pointed to structural reforms introduced by the Department for Education that disrupted regional procurement and funding allocation schedules.
In response, the board said it prioritised protecting the core of the business, tightening cost controls and shifting away from volume-based funding models towards higher-quality delivery.
Despite the revenue decline, the Manchester-based firm said it maintained strong gross margins through disciplined delivery and careful management of direct costs, alongside a deliberate move away from lower-margin funded provision adopted by some parts of the training sector.
The business also generated around £400,000 from non-government funded B2C training during the year, including initial traction from its newly launched Next Gen Data and AI training programmes.
Northcoders also secured Department for Education contracts in Lancashire and with the Greater London Authority during the year.
Counter, its challenger consultancy brand led by managing director Amul Batra, delivered strong growth during 2025.
Revenue rose 67% to £1.5m, up from £0.9m in FY24, while total sales booked reached approximately £2.5m.
Around £1m of contracted revenue has rolled into FY26, with the majority expected to be delivered in the first half of the year.
The company expects to report a statutory loss for FY25, driven largely by the impact of reduced government funding and the impairment of assets no longer central to current delivery models.
However, it expects an improved first half of FY26 relative to the prior year, supported by contracted revenue already in place, particularly within Counter.
The group continues to win work through public-sector procurement routes including the G-Cloud framework, strengthening routes to market for its B2B consultancy offering.
“Whilst FY2025 was a challenging year for the group, our performance has been resilient and our focus on margin resolute,” said Chris Hill, CEO of Northcoders.
“Following significant changes to the UK skills funding landscape, the number of funded B2C learners decreased across the sector. In response, we acted decisively by resizing the business, maintaining strict cost discipline and protecting gross margins, while continuing to invest selectively in higher-quality, employer-aligned delivery.
“We have taken a series of swift, deliberate actions to reposition the business and create a solid base for the future. Importantly, we ended the year with a strong balance sheet, no covenant constraints and improving revenue visibility.
“Our challenger consultancy brand, Counter®, continues to build momentum, supported by contracted revenue, a healthy pipeline of opportunities across existing and new clients and recent success in key public-sector frameworks.
“As we enter FY2026, with a simplified cost base and a greater delivery focus in the first quarter, the board believes Northcoders is well positioned to build sustainably as market conditions stabilise.”