Listed technology training provider Northcoders has said it cannot support current market expectations amid the move to a regional government funding model for skills bootcamps.
The Manchester-headquartered company reported record results for last year but changes to how funding is allocated has created uncertainty.
It has moved to reduce fixed annual costs by 40% this year as it looks to save £3.25m.
“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,” it said in a notice to the London Stock Exchange.
“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.
“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.”
Northcoders saw revenue increase by 24% to £8.8m for the year ended 31st December 2024, which it credited in part with diversification of revenues.
Its number of hiring partners rose to 510, whilst its NCore platform and B2B consultancy brand Counter both continued to gain momentum, it said at the time.
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Today it stated: “Counter 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.”
On the cost reductions, it said: “These 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 £2.25m.”
It added that an existing £10m contract with the Department for Education, which concludes later this year, continues to provide a solid foundation and helps offset some of the near-term headwinds, generating cash for many months ahead.
“We are pleased with the continued progress made in diversifying Northcoders revenues whilst the government funding transition takes place,” said CEO Chris Hill. “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.”