Assurance delivering. FY22 Assurance gross margins saw a decline, as expected, but strong H2 revenue and opex control meant EBITA was slightly ahead of our forecast. NCC is planning a c.8% rate increase, and coupled with its move to a global delivery model to help mitigate wage inflation hot spots, this should alleviate further gross margin pressure. Debate moves on. The arrival of the new CEO creates the opportunity for a clear strategic route forward for NCC. Assurance has been through the business improvement ‘phase’ over the last few years, and is addressing the near term headwinds of wage inflation through its global delivery model, increasing billable rates and stabilising attrition. This now creates the platform for a standalone business to support incremental growth avenues. For the taking. Moving up the value chain has been attempted before, but sustainable growth was a challenge whilst NCC moved through its ‘fixing’ phase. With a stronger platform now, a buoyant market and incremental growth the primary focus, Assurance could offer attractive prospects. It will take time to yield organic results, may require some P&L investment, and M&A could feature, so the process is not risk free, but it does appear that sharpened value realisation is on the agenda. Software resilience. While H2 saw moderate growth, the core UK business declined, with the £5m investment to address its challenges being worked through. Our take is that once it is stabilised and IPM is integrated, value realisation may be sought to support Assurance’s longer term growth. Valuation. We up FY23E EBITA by 7% driven by Assurance growth. Our 235p SoTP assumes 11x FY23E EBITA for Software Resilience and 16x for Assurance. The 11x multiple is similar to the IPM deal and, while the combined business is larger, it also comes with challenges that are being working though. The Assurance multiple reflects its growth but also the constrained valuation backdrop. We are conscious of the ‘risk-off’ environment, but we sense the value realisation debate is coming into focus, supporting our move to Buy.