GB Group PLC Final Results

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Gb Group Plc	LSE:GBG	London	Ordinary Share	GB0006870611	ORD 2.5P

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-4.00	-1.16%	341.40	340.60	341.40	349.40	338.40	345.00	761,592	16:35:25

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
Computer Programming Service	278.81M	-119.79M	-0.4743	-7.18	860.28M

RNS Number : 8761R

GB Group PLC

11 June 2024

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Embargoed until 7.00 a.m.

11 June 2024

GB GROUP PLC

("GBG", the "Group" or the "Company")

Results for the year ended 31 March 2024

FY25 outlook reiterated; positive momentum continues

GB Group plc, (AIM: GBG), the experts in global identity and location software, today announces its audited results for the financial year ended 31 March 2024.

Financials	FY24	FY23
Revenue	£277.3m	£278.8m
Constant currency revenue¹	£277.3m	£270.1m
Adjusted operating profit¹	£61.2m	£59.8m
Adjusted operating profit excluding FX gain	£61.4m	£56.8m
Adjusted operating margin ex FX gain	22.1%	20.4%
Operating (loss)²	(£41.4)m	(£112.4)m
(Loss) before tax	(£50.4)m	(£118.8)m
Adjusted diluted earnings per share³	15.1p	16.4p
Diluted (loss) per share	(19.2)p	(47.5)p
Net debt¹	(£80.9)m	(£105.9)m
Final dividend per share	4.20p	4.00p

¹Defined within note 19 to the results. ²Exceptional costs of £59.6m include a £54.7million non-cash goodwill impairment charge as reported at the half-year results (FY23: Exceptional costs of £127.2 million included a £122.2m non-cash goodwill impairment charge) as explained further within the financial review and note 13 to the results. ³ Defined within note 10 to the results.

Dev Dhiman, CEO, commented:

"This is my first set of results since taking the role of Chief Executive and I am pleased to report a more positive trading momentum. My first few months have focused on our teams, customers and business partners across GBG. This has reinforced my confidence in our competitive differentiation and our market opportunity. I believe we have opportunities to build on our momentum and capitalise on the strong and attractive structural growth drivers in the market.

The time I have spent with our key stakeholders has informed our focus areas around simplicity; being globally aligned; driving a performance culture and differentiation through innovation. I am looking forward to working with everyone across GBG to deliver on these priorities. In doing so, we will ensure that GBG continues to help our 20,000+ customers grow, by giving them the intelligence to make the best decisions, when it matters most.

GBG plays an important role in protecting consumers and businesses from fraud while enabling our customers to reach and build trust with their customers. And we will continue to play this critical and increasingly relevant role over the long term for the benefit of all of our stakeholders."

Financial summary

· Final results are in line with the trading update released on 23 April 2024

· On a reported basis, revenue decreased by 0.5%. On a constant currency basis, growth was 2.7%

‒ Growth accelerated to 5.0% in the final quarter of the year, driven by improved trends in Identity Americas and EMEA

· Strong focus on simplification and cost-effectiveness throughout the Group which delivered £10 million of annualised savings with a £8.8 million in-year benefit

‒ Adjusted operating profit of £61.4 million, up 8.0% excluding net gains from foreign exchange

‒ On a reported basis, operating loss of £41.4m, caused by the £54.7 million exceptional non-cash goodwill impairment charge that was recognised in the first half

· Strong cash conversion of 90.6% (FY23: 67.3%) led to a reduction in net debt to £80.9 million (31 March 2023: £105.9 million)

· The Board is recommending a final dividend per ordinary share of 4.20p, up 5% (FY23: 4.00p)

FY25 outlook reiterated

· The new financial year has begun in-line with our expectations, with improved momentum in Identity and Location continuing from the final quarter of FY24

· For the year as a whole, we expect mid-single-digit revenue growth on a constant currency basis, which will drive high single-digit growth in adjusted operating profit given the operational efficiency gains achieved in FY24

Clear on our focus areas

· Simplicity: A series of initiatives are underway to make it easier for customers and partners to engage and operate with GBG covering a brand refresh, sales and organisational structure

· Being globally aligned: An important area of strategic progress since January has been our drive towards greater alignment through the implementation of a global operating model

· Driving a performance culture: We are working towards delivering a high-performance culture where everyone is hungry to win, determined to outperform our competition, and to celebrate our success

· Differentiation through innovation: Continued to drive innovation that enhances our leadership in the identity fraud and location intelligence markets including solutions such as GBG Trust, while our investments in AI are delivering increased performance across our portfolio

Notable customer successes

· Location: Supporting e-commerce expansion for high-street brands, while capturing growing demand from our large and diverse customer and partner base including HelloFresh, Aldi, Santander and Reltio

· Identity: AIG, Floa, Tide and Sumup are among a diverse group of customers utilising the breadth of our solutions, while in US Gaming we have had success with ESPNBET and Bally's

· Fraud: Our fraud monitoring solutions were chosen by large financial institutions in Southeast Asia, and demand in Europe for our fraud investigation capabilities included UK Companies House

Results presentation
Management will host an in-person presentation this morning at 0930hrs GMT for sell-side analysts and institutional investors. If you would like to attend in person, please contact: GBG@teneo.com

To register to view the event live online, please use the following link:

https://www.investis-live.com/gb-group/663caee77e7bb30d0033f88b/tseer

This will be available on-demand via our investor website along with the materials shortly after the event.

For further information, please contact:

GBG

Dev Dhiman, CEO & David Ward, CFO

Richard Foster, Investor Relations

+44 (0) 1244 657333

+44 (0) 7816 124164

Numis (Nominated Adviser and Corporate Broker)

Simon Willis & Joshua Hughes

+44 (0) 0207 260 1000

Barclays (Corporate Broker)

Robert Mayhew & Stuart Jempson

+44 (0) 207 623 2323

Teneo (Financial PR)

James Macey White & Matt Low

+44 (0) 20 7260 2700

GBG@teneo.com

Website

www.gbgplc.com/investors

About GBG

GBG is the leading expert in global identity and location. In an increasingly digital world, GBG helps businesses grow by giving them intelligence to make the best decisions about their customers, when it matters most.

Every second, our global data, agile technology, and expert teams, power over 20,000 of the world's best-known organisations to reach and trust their customers.

To find out more about how we help our customers establish trust with their customers visit www.gbgplc.com and follow us on LinkedIn and X @gbgplc.

Chief Executive Officer's review

I wanted to use this first opportunity as CEO to update you on our performance in FY24, and then outline my thoughts on GBG today together with our focus areas as the Group evolves.

Summary

In an increasingly digital world, GBG exists to help businesses and organisations grow by giving them the intelligence to make the best decisions about their customers, when it matters most. We are consistently set apart by our global reach and our ability to serve industry-specific solutions across a range of sectors. Our combination of global data, agile technology, and expertise, powers over 20,000 organisations, including the best-known global brands. We help those organisations to reach and trust their customers across a number of the most attractive markets globally, which are underpinned by favourable structural trends - providing GBG with a long-term, sustainable runway of growth.

Reflecting on FY24, we are pleased to have successfully executed our financial plan for the year. Our strategic progress on simplification and cost-effectiveness delivered £10 million of annualised savings enabling GBG to be a more resilient and profitable business with the capacity to capitalise on our future growth opportunities. As expected, our overall growth in FY24 remained constrained by two significant headwinds to our transactional volumes; first, the subdued macroeconomic conditions impacted consumer demand, and second, changes in consumer behaviours within the internet economy.

While macroeconomic conditions remain subdued, we have seen our growth trajectory improve during the second half of FY24 resulting from a partial reacceleration in Identity as consumer behaviour normalised and I am encouraged by the operational momentum that we now carry into FY25. Net revenue retention (NRR) improved by 580 basis points to 98.1% and we were also pleased with a further improvement in revenue growth generated from new customers. Our high absolute customer retention rate and our flexible business model featuring high levels of repeatable revenue means we are well-placed as business confidence returns, both through improved top-line growth and the operating leverage arising from the cost savings we delivered.

Strong strategic progress has also been delivered this year. We launched innovative products that further enhance our leadership in the identity fraud market, such as GBG Trust and Score to optimise the onboarding journey. In Location, we scaled up the deployment of our AI-parsing and deep-learning technology to seventeen more countries to increase our industry-leading performance in emerging markets. More broadly, a greater emphasis on collaboration and global alignment is ensuring that we can appropriately leverage our scale and expertise for commercial success. This includes strengthening our Americas Identity business in go-to-market, sales enablement and product to more effectively pursue the large market opportunity, and we are pleased by the improvement seen in that business as a result of our actions to date.

In summary, we are pleased with the financial and strategic progress delivered in FY24, particularly the stronger final quarter in Identity. Our achievements demonstrate the focus, tenacity and effort of the GBG team during the year and I thank them all for their hard work and dedication to our customers. I am excited about what we will achieve together in FY25.

Financial results overview

Both revenue and adjusted operating profit are in line with the trading update released on 23 April 2024.

Group revenue of £277.3 million grew by 2.7% on a constant currency basis. This reflects improving net revenue retention (NRR) of 98.1% compared with 92.3% in FY23 and a further improvement in revenue growth generated from new customers won in the last 12 months to 4.6% (FY23: 4.5%).

Despite our high levels of absolute customer retention, revenue growth opportunities continued to be impacted by transaction volume demand linked to the two specific headwinds mentioned earlier which impacted our year-on-year comparison. However, as consumer behaviour normalised, the headwinds related to certain internet economy customers abated as we moved through the year, and it was pleasing to see growth accelerate to 5.0% in the final quarter of FY24 driven by our Americas and EMEA identity businesses.

As a result of the subdued macroeconomic environment in which to drive top-line growth, we have been particularly focused on execution to drive the Group's profitability. These initiatives to deliver increased simplicity and cost-effectiveness have balanced delivering growth in returns for shareholders and the need to invest and optimise our core solutions in a competitive market. We have made excellent progress with these initiatives, which began during FY23 and have achieved an annualised run-rate reduction in operating expenditure of £10 million. This has contributed to an adjusted operating profit growth, excluding net gains on foreign exchange, of 8.0% to £61.4 million, with our operating profit margin on that basis expanding by 170bps to 22.1%.

On a reported basis there was an operating loss of £41.4m, caused by the £54.7 million exceptional non-cash goodwill impairment charge that was recognised in the first half.

Our cash conversion normalised at 90.6% (FY23: 67.3%) which contributed to a good reduction in the Group's net debt to £80.9 million at 31 March 2024 (31 March 2023: £105.9 million) and net debt to EBITDA leverage below 1.3x as expected. While our near-term capital allocation priority is to use cash generation to reduce net debt, the Board remains committed to a disciplined approach to capital allocation that focuses on delivering long-term shareholder value. As a result of our strong cash performance and its confidence in GBG's enduring market opportunity, the Board recommends a final dividend per share of 4.20 pence (FY23: 4.00 pence per share), which represents a year-on-year increase of 5.0%.

Our segmental performance

Location (29% of the Group's revenues)

Location had another good year; revenue was up 7.3% on a constant currency basis to £81.1 million as the business continued to perform resiliently. We successfully mitigated the impact of softer transactional volumes from our e-commerce customers by driving go-to-market activity on expanding the relevant use cases into a diverse sector and geographic footprint such as financial services, utilities, telecoms and via channel partners.

Notable customer success:

· Capturing growing demand from our large and diverse customer and partner base, including HelloFresh, Aldi, Santander and Reltio

· Supporting retail customers such as New Balance, Kurt Geiger, Neiman Marcus and Marc Jacobs

· Facilitating the customer checkout journey for some of Asia's largest e-commerce marketplaces to enhance address accuracy as they experience growing cross-border demand

Identity (56% of the Group's revenues)

Revenue of £156.1 million represents a small 0.7% decline on a constant currency basis, in line with our expectations for Identity this year. A strong performance in our APAC identity business driven by financial services and partner activity in Australia was offset by tough prior-year comparatives for the first three quarters of the year in the Americas, reflecting the trends discussed earlier. As expected, year-on-year growth accelerated by mid-single-digits in the fourth quarter as a result of improving trends in both our EMEA and Americas businesses. Our absolute customer retention rate remained strong in a period when usage volumes remained subdued, and we are pursuing a more globally aligned approach to cross-sell/up-sell opportunities that leverages the competitive differentiation of our solutions to deliver improved onboarding success, identity fraud detection and customer return on investment.

Notable customer success:

· Demonstrating an increased focus on identity fraud detection, Floa chose our mobile fraud signal solution with an upsell to our fraud monitoring capabilities and, Tide selected our Multibureau and Trust solutions

· Customers leveraging our global expertise include AIG, Atlantic Lottery, Currencies Direct and SumUp who all utilised our expanded international data coverage while investment platform, Webull, chose GBG as its end-to-end onboarding partner in EMEA and APAC

· In the Americas gaming, where changes in regulation continue to create opportunity for GBG, we had success with customers such as ESPNBET and Bally's

Fraud (15% of the Group's revenues)

Revenue for our fraud prevention, detection and investigation solutions grew by 7.8% at constant currency to £40.2 million. This was underpinned by licence renewals, upgrades and new business wins with leading financial institutions in this segment's core Southeast Asia and EMEA markets, albeit sales of software licences slowed in the final quarter of FY24 after two strong years of growth. In these markets, our solutions have an established reputation and play a critical part in our customer's compliance ecosystems, helping them monitor rapidly evolving fraud threats and comply effectively with new regulatory standards.

Notable customer success:

· Agreements for our fraud monitoring solutions in Indonesia include Bank Syariah and Bank Ina Digital and in Thailand with TMBThanachart Bank and Kiatnakin Phatra Bank

· Nordic-focused Express Bank who upgraded to our fraud compliance platform

· Robust demand for our specialist fraud investigation capabilities in the UK includes emerging use cases working with one of the UK's leading transport firms to support revenue protection on its network and supporting UK Companies House with investigations related to new Economic Crime legislation

Our focus areas

GBG is a high-quality business with a proven track record of delivering profitable growth and a reputation for addressing our customers' complex identity challenges. Through our expertise and innovation, we have developed strong competitive differentiation that underpins our leadership positions across our markets.

Since becoming CEO at the end of January, my interactions with our team, our customers and partners has reinforced why I'm excited about GBG's strategic position in a growing market. That said, I recognise there is scope for performance improvement, and my overriding objective is to improve the organic growth rate for the business. This has directly informed our initial focus areas:

Simplicity: We believe our success will have its foundation in being a simple and efficient organisation and we were pleased that cost initiatives executed in FY24 delivered £10 million of annualised savings. Building on this, simplicity will support our push to be globally aligned, to develop better innovation, and to drive a performance culture. By operating simply, we will drive change to make GBG easier to work with, easier to understand, and easier to prosper within.

We have structured global teams to better focus on our priorities, and we will continue to simplify our product portfolio to optimise our investments to increase the effectiveness and innovation of our solutions. We are also streamlining commercial processes, making it easier for customers to engage with us, with a key example being a brand refresh. This is designed to enable our teams to communicate our value proposition more clearly to key stakeholders, creating a richer understanding of who we are and what we offer.

Being globally aligned: While our Location business has been run globally for some time, we are continuing to drive towards greater alignment through the implementation of a global operating model for our Identity Fraud activities. In our core regions, we are often solving similar complex challenges and there is still further opportunity to work more closely with greater consistency to become a stronger and faster organisation that stands out in all the markets we serve.

We are bringing our identity and fraud capabilities closer together, with our Chief Product Officer leading a more centralised approach to development and innovation. By exploiting our size and scale as one of the largest providers in the market, we will leverage common identity fraud platforms and capabilities to serve our customers worldwide through localised solutions. We are also benefiting from being more commercially effective by managing key suppliers and reducing duplication of investment with a build-once approach. An example is being able to offer our customers increased performance by delivering our improved international data sets, developed in our EMEA Identity business, to customers around the world.

A newly created role of Head of Market Development is focused on leading our global go-to-market strategy and sales enablement across our Identity Fraud activities working closely with our regional leaders. This approach will improve effectiveness and pace across our sales and marketing cycle. We are already seeing the benefits of this approach in our Americas Identity business.

Driving a performance culture: As we make progress towards building a simpler and more efficient organisation focused on growth, we expect to create momentum across the business that enhances the experience for our customers and builds on a culture that differentiates us. Across all areas of the Group, we will increase the emphasis on performance delivery from the significant talent within the GBG team, which has seen over 130 team members promoted this year to expanded roles. We have also implemented a high-performance development programme for key sales and product leaders globally and embedded performance initiatives that celebrate the collaborative success of the team.

GBG has always had a strong focus on team member engagement, and this will not change as we evolve. Our latest Gallup survey resulted in 90% of the team recommending GBG as a great place to work (FY23: 93%) with a total participation rate of 92%. We did expect to see a moderation in this score versus the prior year given the level of change and focus on efficiency during the last 12 months. Strong team engagement is directly correlated with satisfied customers, and we were particularly pleased to see our latest Net Promoter Score (NPS) of 50, our highest to date and a 19% increase year on year in a period when we expanded our NPS monitoring globally.

Differentiation through innovation: Meeting the evolving needs of customers will be crucial in maintaining our competitive advantage and accelerating our growth through value-added activities that increase the intelligence provided to support a customer's decision-making. Our GBG Score solution is facilitating discussions with customers to understand the confidence they can place in their current onboarding journey. This complements GBG Trust, our proprietary identity fraud network to stop fraud at the point of onboarding. Customers across sectors have contributed more than 50 million identity records into the network to help onboard consumers more quickly, differentiate their journey based on a 'trust' score and share insight on bad actors.

We have extensive experience deploying AI and machine learning. Advances in technology and our product portfolio, such as the Trust network, mean AI will continue to be a key focus. Product highlights include new computer vision and machine learning models within our document & biometric capabilities, delivering a 4.5x improvement in match rate performance as well as enhancements to our document tamper detection. We also improved our location intelligence using deep learning models and data parsing to increase match results by up to 17% in emerging markets. At the same time as we make significant progress enhancing extensive AI capabilities to augment our products, we are extending its use across our broader business operations for improved productivity to provide an exceptional end-to-end customer experience from setup to support.

Outlook and summary

GBG is a high-quality business with market-leading positions in the key sectors and geographies we operate. We have good momentum to continue our journey of building one of the largest identity and location players in the market through the evolution of our strategy to concentrate and exploit the most attractive market growth opportunities, with a relentless focus on delivering shareholder value.

Our focus on identity onboarding supports our customers in managing this critical stage of a customer lifecycle to help them grow and build long-term trusted relationships. Products such as GBG Trust reinforce our strength in this market as the digital transformations of our customers progress and the world continues to face exponential growth in the threat of fraud.

The new financial year has begun in-line with our expectations, with improved momentum in Identity and Location continuing from the final quarter of FY24. The Board is confident GBG will deliver mid-single-digit revenue growth, on a constant currency basis, which will drive high single-digit growth in adjusted operating profit. As we look further forward, the Board remains confident that GBG has the market position, technology leadership and business model to capitalise upon the significant growth opportunities ahead, delivering significant and sustainable shareholder value.

Dev Dhiman

Chief Executive Officer

On behalf of the Board

10 June 2024

Financial review

We are pleased that we were able to successfully execute our financial plan for the year. We had a strong focus on simplification and cost-effectiveness and as a result have delivered structural savings that we expect will benefit GBG into the future. Our continued focus on growth initiatives led to us achieving the acceleration in year-on-year growth in quarter four that we had expected and built into our plan. This improved revenue growth of approximately 5.0%, on a constant currency basis, was primarily driven by an acceleration in the Identity segment, as a result of improving trends in the Americas and EMEA. This gives us positive momentum going into the new financial year.

Revenue growth opportunities in FY24 continued to be impacted by the general macroeconomic conditions which has suppressed consumer demand and business confidence leading to lower transactional volumes for GBG. However, some of the more specific headwinds the Group faced in the previous year, relating to changes in consumer behaviours driving demand reductions in the internet economy and particularly fintech businesses, somewhat abated from the fourth quarter of the year.

In FY24 we delivered constant currency revenue growth of 2.7% and as a result of the sharp focus on simplification and efficiencies, we recorded our highest ever level of adjusted operating profit.

GBG's mix of commercial models and resilient customer retention continues to support strong cash generation and good forward visibility due to our high levels of repeatable revenue, with 57.5% (FY23: 56.7%) from subscriptions and 94.8% (FY23: 93.7%) of revenue coming from the combination of subscriptions and consumption.

This focus on driving simplicity and efficiency has enabled GBG to prioritise the disciplined investment required to optimise our core solutions in a competitive market, while at the same time deliver growth in returns for shareholders. These initiatives, which began during FY23, have achieved an annualised run-rate reduction in operating expenditure of £10 million and helped deliver an improved adjusted operating profit margin of 22.1%, which was ahead of the reported FY23 margin of 21.5%. This was despite inflationary pressures and the FY23 margin benefiting from an unusually large FX gain primarily from the retranslation of intercompany loans. Excluding gains and losses on foreign exchange, the FY24 adjusted operating profit margin was still 22.1%, against 20.4% in the prior year.

Our financial position and balance sheet is strong and in FY24 cash conversion returned to more normal levels at 90.6% (FY23: 67.3%). By the end of the year GBG's net debt had reduced to £80.9 million from £105.9 million at the previous year end. The net debt to EBITDA ratio reduced to 1.27 times (FY23: 1.68 times). As we enter the new financial year, we remain focused on cash generation and further repayment of debt.

Revenue and gross margin

Revenue declined on a reported basis by 0.5% but after adjusting for changes in foreign exchange rates, the constant currency revenue growth in FY24 was 2.7%. More detail on revenue performance in each of our operating segments is included in the Chief Executive Officer's Review.

We were particularly pleased with the level of revenue growth attributable to new customers won in the last 12 months which has increased to 4.6% (FY23: 4.5%) and as expected, Net Revenue Retention (NRR) of 98.1% has improved compared to the prior year (92.3%). In FY24 we have seen a reduction in the NRR associated with Fraud segment, which is more susceptible to short-term fluctuations in NRR as contracts are generally larger and revenue timing dependant on renewal dates. NRR, excluding the Fraud segment, increased from 91.1% to 99.0%.

Gross margin for the year of 70.1% was a small reduction against the prior year when the gross margin was 71.0%. This reflects the revenue mix in the year both across our segments but also between direct and partner channels, in addition to an increase in cloud hosting costs. In the second half of the year the revenue mix, along with a focus on cloud hosting optimisation, resulted in gross margin of 71.0%, compared to 69.2% in the first half.

Operating profit and cost management

On a reported basis, there was an operating loss of £41.4 million (FY23: loss of £112.4 million), principally due to the goodwill impairment charge of £54.7 million recognised at the half year (FY23: £122.2 million).

Adjusted operating profit was £61.2 million (FY23: £59.8 million), which represents a margin of 22.1% (FY23: 21.5%) and an 8% increase over FY23, excluding the £3 million foreign exchange gain in the prior year.

This improvement reflects a tight focus on cost efficiency and simplification of our business, combined with disciplined prioritisation of investment to capitalise on our long-term market opportunities.

Despite the general inflationary pressures of the markets in which we operate, our adjusted operating expenses were £8.8 million or 6.3% lower than the prior year. We managed headcount tightly and carefully considered our team member recruitment and the replacement of leavers. This, together with targeted redundancies, led to an 8% reduction in our average headcount over the course of the year.

We also completed a review of our physical office footprint reducing commitments and costs meaningfully to reflect the hybrid working environment of our teams as well the changes we have implemented over the last few years to our geographical footprint, particularly for our technology teams.

Total spend on technology decreased to £46.5 million (FY23: £54.0 million), which represents a reduction of 13.9%. We achieved this through strict prioritisation of technology projects to ensure our teams are focused on fewer projects and ones of highest opportunity for GBG as well as further resource offshoring to lower cost locations.

These cost saving initiatives underpinned our profit delivery in FY24 but have also enabled some level of re-investment into a small number of key product development activities to ensure we maintain our competitive differentiation and are positioned to achieve our short, medium and long-term goals.

Normalised and exceptional items

Amortisation of acquired intangibles

The charge for the year of £39.4 million (FY23: £42.8 million) represents the non-cash cost of amortising separately identifiable intangible assets including technology-based assets and customer relationships that were acquired through business combinations. The decreased charge in FY24 is due to the impact of some intangibles becoming fully amortised during the year, in addition to changes in exchange rates.

Share-based payments

During FY24 3.9 million (FY23: 3.3 million) new share option awards were granted to directors and team members across the Group, including through the GBG Sharesave scheme. This increase was due to the share price being comparatively lower in FY24 leading to a greater number of shares being awarded for any given value.

The charge for the year of £3.5 million (FY23: £2.3 million) has increased as FY23 included a credit due to a change in the assumption for the percentage of awards expected to vest based on EPS and TSR performance.

Impairment of goodwill

As required under IFRS, the Group conducts an annual impairment review of goodwill and intangible assets. This review compares the carrying value on the Group's balance sheet of those assets against the present value of the future cashflows they are expected to generate.

As reported in our half year results for the six months ended 30 September 2023, significant increases to central bank interest rates since 31 March 2023 resulted in the post-tax discount rate used in our assessment and applied to the US cashflows increasing from 9.2% at 31 March 2023 to 9.9%. This resulted in an exceptional non-cash goodwill impairment charge of £54.7 million. More detail can be found in note 13.

Other exceptional items

In addition to the goodwill impairment charge, other exceptional costs of £4.9 million (FY23: £5.0 million) were incurred by the Group in the year and have been detailed in note 6. Broadly, these exceptional charges arose in support of our initiatives to achieve future operational simplification and efficiency.

The most significant elements were the exit costs for a number of team members which totalled £4.0m as part of this group wide review; and £0.7m of integration costs as we finalised projects to align systems from the Acuant acquisition.

Net finance costs

The Group incurred net finance costs for the year of £9.0 million (FY23: £6.4 million). The increase is due to the annualised impact of the significant increases in the Secured Overnight Financing Rate (SOFR) interest rate during FY23 (from 0.3% to 4.8%), upon which the Group's loan facility interest rate is linked. SOFR continued to increase until July 23 and has remained around the 5.3% level throughout the rest of FY24.

Strong cash generation has enabled the Group to reduce net debt by £25.0 million and making repayments against the loan facility will continue to be a focus during FY25.

Taxation

The total tax credit of £1.8 million (FY23: £1.0 million charge) includes £8.8 million of current tax payable on the Group's taxable profits and losses in the year (FY23: £12.9 million), offset by a deferred tax credit of £10.6 million (FY23: £11.9 million).

The reported effective tax rate for the Group has moved from negative 0.8% in FY23 to 3.6% in FY24.

The adjusted effective tax rate, which excludes the impact of amortisation of acquired intangibles, share-based payments and exceptional items increased from 21.3% to 25.2%. The majority of this increase is due to UK statutory tax rate increasing from 19% to 25% from 1 April 2023.

The tax rate attributable to US State taxes has fallen and largely this is due to changes in the calculation method for some US States. GBG Americas has significant deferred tax assets that have been revalued at the lower tax rate resulting in a tax charge that is fully recognised as a discrete item in the year to 31 March 2024.

The Group expects its future adjusted effective tax rate to be approximately 25%.

Earnings per share

Basic earnings per share improved from a loss of 47.5 pence to a loss of 19.2 pence reflecting the reduction in the non-cash goodwill impairment charge.

Adjusted earnings (adjusted operating profit less net finance costs and adjusted tax) decreased to £39.0 million (FY23: £42.1 million) due to the higher net finance cost and higher adjusted tax charge. This resulted in a 7.7% decrease in adjusted diluted earnings per share from 16.4 pence to 15.1 pence.

The basic weighted average number of shares at 31 March 2024 increased minimally to 252.6 million (FY23: 252.2 million), due primarily to the full year impact of shares issued during the prior year.

Deferred and accrued revenue

Deferred revenue at the end of the year decreased by 2.1% to £55.3 million (FY23: £56.5 million).

This balance principally consists of contracted licence revenues and profits that are payable up front but recognised over time as the Group's revenue recognition criteria are met. The deferred revenue balance does not represent the total contract value of any future unbilled annual or multi-year, non-cancellable agreements as the Group more typically invoices customers in annual or quarterly instalments. The deferred revenue balance at any point in time is determined by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, FX rates and new business linearity within a reporting period.

Accrued revenue at the end of the year increased by £6.9 million to £14.5 million (FY23: £7.6 million). This increase was primarily due to timing differences with several larger contracts, mostly in the Fraud and Location segments, signed or renewed during the year where the revenue recognition profile is different to the invoicing profile.

Cash flows

Group operating activities before tax payments and exceptional items generated £57.8 million of cash (FY23: £42.5 million) representing an Adjusted EBITDA to operating cash conversion ratio of 90.6% (FY23: 67.3%). Following the specific and non-recurring factors impacting cash conversion during the prior year, the operating cash conversion has returned to a level more consistent with previous years and GBG's medium-term guidance.

During the year to 31 March 2024, net repayments against the RCF were £23.0 million, resulting in outstanding balances of $129 million (FY23: $149 million) and £nil (FY23: £7 million).

Overall, our net debt at 31 March 2024 decreased to £80.9 million. This was despite the £10.1 million full year dividend payment, £1.2 million payment of contingent consideration related to the Cloudcheck acquisition and exceptional cash costs of £5.4 million. Offsetting these costs were a positive £1.8 million retranslation impact from the conversion of the non-sterling denominated cash and debt into pound sterling and a £1.3 million receipt following the sale of an owned property during the year.

Further detailed analysis of this movement is included in the consolidated cash flow statement .

We were pleased to obtain approval for the exercise of the second of the one-year extension options on the existing revolving credit facility. Extending the length of the facility through to July 2027 provides a platform to support investment in organic growth and potential future M&A activity.

Dividend

At the AGM, the Board of Directors will propose a final ordinary dividend of 4.20 pence per share (FY23: 4.00 pence), amounting to £10.6 million (FY23: £10.1 million).

If approved, this will be paid on 2 August 2024 to ordinary shareholders whose names appear on the register of members at the close of business on 21 June 2024. The Group continues to operate a Dividend Reinvestment Plan, allowing eligible shareholders to reinvest their dividends into GBG shares.

In proposing the FY24 final dividend amounting to £10.6 million, the Directors have assessed each of the components of equity at 31 March 2024 and assessed how much of each component is considered distributable in accordance with applicable guidance. The Company has assessed that £86,739,000 of Merger Reserve recognised upon the acquisition of Acuant Intermediate Holding Corp is considered to be a realised profit, as a realised loss has been recognised on the impairment of the related asset - being the investment in GBG (US) Holdings LLC.

Therefore, the Directors consider that there are sufficient distributable reserves available at 31 March 2024 for the declaration of this dividend.

Treasury policy and financial risk

The Group's treasury operation is managed by a Treasury Committee within formally defined policies and reviewed by the Board. The Treasury Committee meets on a regular basis to review cash flow forecasts, covenant compliance, exposure to interest rate and foreign currency movements and make recommendations to the Board based on these reviews.

The Treasury Committee receives weekly cash information to monitor liquidity across the Group and ensure that significant cash outflows, such as acquisition payments, dividends and loan repayments, could be made without exposing the Group to undue risk.

The Group finances its activities principally with cash, short-term deposits and borrowings but has the ability to draw down up to £72.8 million of further funding from a committed revolving credit facility. Other financial assets and liabilities, such as trade receivables and trade payables, arise directly from the Group's operating activities. Surplus funds of the Group are used to repay the RCF, whilst ensuring that a suitable operational level of cash is retained.

The Group is exposed to a variety of financial risks including: market risk (including foreign currency risk and cash flow interest rate risk), credit risk and liquidity risk. It is not the Group's policy to engage in speculative activity or to use complex financial instruments.

Approved by the Board on 10 June 2024

David Ward

Chief Financial Officer

10 June 2024

Consolidated statement of profit or loss

Year ended 31 March 2024



			2024			2023
	Note	Before	Normalised and		Before	Normalised and
		exceptional items £000	exceptional items¹ £000	Total £'000	exceptional items £000	exceptional items¹ £000	Total £'000



Revenue	3, 4	277,325	-	277,325	278,810	-	278,810

Cost of sales		(82,805)	-	(82,805)	(80,994)	-	(80,994)


Gross profit		194,520	-	194,520	197,816	-	197,816

Operating expenses		(132,386)	(102,548)	(234,934)	(141,235)	(172,246)	(313,481)

Net (loss)/gain on foreign exchange		(162)	-	(162)	3,022	-	3,022

(Increase)/decrease in expected credit losses of trade receivables		(775)	-	(775)	214	-	214


Operating profit/(loss)		61,197	(102,548)	(41,351)	59,817	(172,246)	(112,429)

Finance income	3, 7	262	-	262	636	-	636

Finance costs	8	(9,297)	-	(9,297)	(7,037)	-	(7,037)

Profit/(loss) before tax		52,162	(102,548)	(50,386)	53,416	(172,246)	(118,830)

Income tax credit/(charge)	9	(13,155)	14,958	1,803	(11,354)	10,390	(964)

Profit/(loss) after tax for the year attributable to equity holders of the parent		39,007	(87,590)	(48,583)	42,062	(161,856)	(119,794)


Earnings per share	10
- basic earnings per share for the year		15.4p		(19.2p)	16.7p		(47.5p)

- diluted earnings per share for the year		15.1p		(19.2p)	16.4p		(47.5p)

¹ Normalised items include: amortisation of acquired intangibles £39,447,000 (2023: £42,758,000) and share-based payment charges £3,488,000 (2023: £2,313,000). Exceptional items total £59,613,000 (2023: £127,175,000) (see note 6).

The accompanying notes are an integral part of this consolidated statement of profit or loss.

Consolidated statement of comprehensive income

Year ended 31 March 2024




	2024	2023
	£'000	£'000


Loss after tax for the period attributable to equity holders of the parent	(48,583)	(119,794)

Other comprehensive (expense)/income:

Items that may be reclassified to profit or loss in subsequent periods:
Exchange differences on retranslation of foreign operations (net of tax)	(12,306)	35,060
Total items that may be reclassified to profit or loss in subsequent periods	(12,306)	35,060

Items that will not be reclassified to profit or loss in subsequent periods
Fair value movement on investments	(1,600)	700
Total items that may be reclassified to profit or loss in subsequent periods	(1,600)	700


Total other comprehensive (expense)/income	(13,906)	35,760

Total comprehensive expense for the period attributable to equity holders of the parent	(62,489)	(84,034)

The accompanying notes are an integral part of this consolidated statement of comprehensive income.

Consolidated statement of changes in equity

Year ended 31 March 2024


				Other reserves
		Equity share capital	Share premium	Merger reserve	Capital redemption reserve	Foreign currency translation reserve	Treasury shares	Total other reserves	Retained earnings/(accumulated losses)	Total equity
	Note	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Balance at 1 April 2022		6,297	566,769	99,999	3	1,423	-	101,425	112,636	787,127
Loss for the period		-	-	-	-	-	-	-	(119,794)	(119,794)
Other comprehensive income		-	-	-	-	35,060	-	35,060	700	35,760
Total comprehensive income/(expense) for the period		-	-	-	-	35,060	-	35,060	(119,094)	(84,034)
Issue of share capital		14	812	-	-	-	-	-	-	826
Investment in own shares		-	-	-	-	-	(2,500)	(2,500)		(2,500)
Cost of employee benefit trust shares issued to employees		-	-	-	-	-	1,426	1,426	(1,417)	9
Share-based payments		-	-	-	-	-	-	-	2,313	2,313
Tax on share options		-	-	-	-	-	-	-	(143)	(143)
Net share forfeiture receipt		-	-	-	-	-	-	-	146	146
Equity dividend	11	-	-	-	-	-	-	-	(9,600)	(9,600)
Balance at 31 March 2023		6,311	567,581	99,999	3	36,483	(1,074)	135,411	(15,159)	694,144

Loss for the period		-	-	-	-	-	-	-	(48,583)	(48,583)
Other comprehensive income		-	-	-	-	(12,306)	-	(12,306)	(1,600)	(13,906)
Total comprehensive iexpense for the period		-	-	-	-	(12,306)	-	(12,306)	(50,183)	(62,489)
Issue of share capital		4	-	-	-	-	-	-	-	4
Investment in own shares		-	-	-	-	-	-	-	-	-
Cost of employee benefit trust shares issued to employees		-	-	-	-	-	947	947	(939)	8
Share-based payments		-	-	-	-	-	-	-	3,488	3,488
Tax on share options		-	-	-	-	-	-	-	104	104
Net share forfeiture refund		-	-	-	-	-	-	-	(37)	(37)
Equity dividend	11	-	-	-	-	-	-	-	(10,093)	(10,093)
Balance at 31 March 2024		6,315	567,581	99,999	3	24,177	(127)	124,052	(72,819)	625,129

The accompanying notes are an integral part of this consolidated statement of changes in equity.

Consolidated balance sheet
As at 31 March 2024



	Note	2024	2023
		£'000	£'000
Assets

Non-current assets
Goodwill	12	561,622	626,394
Other intangible assets	12	181,064	224,834
Property, plant and equipment Right-of-use assets	12 12	1,650 1,565	3,752 1,449
Investments		1,426	3,026
Deferred tax asset		937	793
Trade and other receivables	14	6,223	4,305

		754,487	864,553

Current assets
Inventories		1,316	2,619
Trade and other receivables	14	72,841	65,313
Current tax		2,939	1,083
Cash and cash equivalents		21,321	21,552

		98,417	90,567

Total assets		852,904	955,120


Equity and liabilities

Capital and reserves
Equity share capital		6,315	6,311
Share premium		567,581	567,581
Other reserves		124,052	135,411
Accumulated losses		(72,819)	(15,159)

Total equity attributable to equity holders of the parent		625,129	694,144

Non-current liabilities
Loans and borrowings Lease liabilities	16	101,115 875	126,411 524
Provisions		741	792
Deferred revenue		2,337	1,492
Deferred tax liability		23,819	34,986

		128,887	164,205

Current liabilities
Lease liabilities		836	1,242
Trade and other payables	15	43,669	37,312
Deferred revenue		52,961	55,015
Contingent consideration	17	-	1,237
Current tax		1,422	1,965

		98,888	96,771

Total liabilities		227,775	260,976

Total equity and liabilities		852,904	955,120

The accompanying notes are an integral part of this consolidated balance sheet.

Approved by the Board on 10 June 2024

D Dhiman - Director

D M Ward - Director

Registered in England number 2415211

	Consolidated cash flow statement
	Year ended 31 March 2024


		Note	2024	2023
			£'000	£'000

Loss before tax:			(50,386)	(118,830)

Adjustments to reconcile loss before tax to net cash flows

Finance income		7	(262)	(636)
Finance costs		8	9,297	7,037
Depreciation of plant and equipment		12	1,306	1,771
Depreciation of right-of-use assets		12	1,155	1,491
Amortisation of intangible assets		12	39,612	42,826
Impairment of goodwill and intangible assets		12	54,707	125,022
Loss on disposal of plant and equipment and intangible assets			(24)	379
Loss on disposal of businesses			-	113
Fair value adjustment on contingent consideration			-	(1,660)
Unrealised gain on foreign exchange			(61)	(3,512)
Share-based payments			3,488	2,313
Decrease/(increase) in inventories			1,227	(1,448)
Decrease in provisions			(36)	(47)
Increase in trade and other receivables			(11,723)	(20)
Increase/(decrease) in trade and other payables			5,373	(16,229)

Cash generated from operations			53,673	38,570
Income tax paid			(10,131)	(4,263)

Net cash generated from operating activities			43,542	34,307


Cash flows used in investing activities

Acquisition of subsidiaries, net of cash acquired		17	(1,200)	(4,991)
Purchase of plant and equipment		12	(448)	(968)
Purchase of software		12	(9)	(57)
Proceeds from disposal of plant and equipment			1,306	79
Net outflow from disposal of businesses			-	(18)
Interest received		7	82	569

Net cash flows used in investing activities			(269)	(5,386)


Cash flows used in financing activities

Finance costs paid			(8,147)	(6,426)
Proceeds from issue of shares			4	826
Purchase of shares for Employee Benefit Trust			-	(2,500)
(Refund)/proceeds from share forfeiture			(37)	146
Proceeds from new borrowings, net of arrangement fee		16	9,714	12,000
Repayment of borrowings		16	(32,967)	(22,394)
Repayment of lease liabilities			(1,399)	(2,062)
Dividends paid to equity shareholders		11	(10,093)	(9,600)

Net cash flows used in financing activities			(42,925)	(30,010)

Net increase/(decrease) in cash and cash equivalents			348	(1,089)
Effect of exchange rates on cash and cash equivalents			(579)	339
Cash and cash equivalents at the beginning of the period			21,552	22,302

Cash and cash equivalents at the end of the period			21,321	21,552

The accompanying notes are an integral part of this consolidated cash flow statement.

Notes to the Accounts

1. Basis of preparation

The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards, as applied in accordance with the provisions of the Companies Act 2006. Accounting policies have been applied consistently to all years presented unless otherwise stated.

The preliminary announcement covers the period from 1 April 2023 to 31 March 2024 and was approved by the Board on 10 June 2024. It is presented in Pounds Sterling (£) and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The financial information set out herein does not constitute the Company's statutory accounts for the years ended 31 March 2024 or 2023 but is derived from those accounts. The financial information has been prepared using accounting policies consistent with those set out in the annual report and accounts for the year ended 31 March 2024. Statutory accounts for 2023 have been delivered to the Registrar of Companies, and those for 2024 will be delivered in due course. The auditors have reported on those accounts; their report was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain any statements under Section 498(2) or (3) of the Companies Act 2006.

Non-GAAP Measures

The Group presents the non-GAAP performance measure 'adjusted operating profit' on the face of the consolidated statement of profit or loss. Adjusted operating profit is not defined by IFRSs and therefore may not be directly comparable with the adjusted operating profit measures of other companies.

The business is managed and measured on a day-to-day basis using adjusted results. To arrive at adjusted results, certain adjustments are made for normalised and exceptional items that are individually significant and which could, if included, distort the understanding of the performance for the year and the comparability between periods.

Normalised items

These are recurring items which management considers could affect the underlying results of the Group.

These items relate to:

• amortisation of acquired intangibles; and

• equity-settled share-based payments charges.

Other types of recurring items may arise; however, no others were identified in either the current or prior year. Recurring items are adjusted each year irrespective of materiality to ensure consistent treatment.

Management consider these items to not reflect the underlying performance of the Group.

Exceptional Items

The Group presents as exceptional items those significant items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance. Such items may include, but are not restricted to, significant acquisition, restructuring and integration related costs, adjustments to contingent consideration, profits or losses on disposal of businesses and significant impairment of assets. Exceptional costs are discussed further in note 6.

Redundancy costs are only classified within exceptional items if they are linked to a reorganisation of part of the business, including when as a result of a business integration.

Management consider these significant and/or non-recurring-items to be inherently not reflective of the future or underlying performance of the Group.

Going concern

The assessment of going concern relies heavily on the ability to forecast future cash flows over the going concern assessment period which covered the period through to 30 September 2025. Although GBG has a robust budgeting and forecasting process, the continued economic uncertainty caused by the macroeconomic environment means that additional sensitivities and analysis have been applied to test the going concern assumption under a range of severe but plausible downside scenarios and a reverse stress test scenario.

The Group has continued to successfully convert adjusted operating profit into cash. During the year to 31 March 2024, GBG's operating cash to Adjusted EBITDA ratio ('cash conversion') was 90.6% an increase of 23.3% on the prior year. This improvement was due to a number of specific non-recurring factors which distorted the cash conversion in the prior period, with the performance now more reflective of historic and expected future levels.

At 31 March 2024 GBG was in a net debt position of £80.9 million (FY23: £105.9 million), an improvement of £25.0 million since 31 March 2023. Cash flow was negatively impacted by continued increases in interest rates during the first half of the year (Secured Overnight Financing Rate (SOFR)) increased by over 0.5% throughout the financial year which has led to higher interest payments on the RCF facility.

The RCF facility has a maximum level of £175 million which could be drawn down for working capital purposes if required. As at 31 March 2024, the available undrawn facility was £72.8 million compared to £47.5 million at 31 March 2023.

Following bank approval in October 2023 for the exercise of the one-year extension on the facility, the Group has access to a £175 million facility until July 2026 and £140 million until July 2027.

The facility agreement has the following covenants:

· Leverage - consolidated net borrowings as a multiple of Adjusted EBITDA for the last 12 months, assessed quarterly in arrears, must not exceed 3.00:1.00

· Interest cover - Adjusted EBITDA for the past 12 months as a multiple of consolidated net finance charges, for the last 12 months, assessed quarterly in arrears, must not fall below 4.00:1.00

The Board approved budget showed continued significant headroom in the covenant compliance tests and sufficient liquidity to maintain operations. The budget model was then adjusted to reflect a severe but plausible downside scenario, including increases in costs, interest rates as well as reduced revenue growth both on an overall Group basis and specific to certain areas of the business. Under these downside scenarios, the covenant compliance and liquidity position did not result in any risk to going concern. Relative to the budget produced by management there have not been any adverse variances in the overall trading performance since the year-end.

Following consideration of the budget and a range of downside scenarios, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Therefore, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the consolidated financial statements.

2. Accounting Policies

The preliminary statement has been prepared on a consistent basis with the accounting policies set out in the last published financial statements for the year ended 31 March 2023. New standards and interpretations which came into force during the year did not have a material impact on the Group's financial statements.

3. Revenue

Revenue disclosed in the consolidated statement of profit or loss is analysed as follows:


	2024	2023
	£'000	£'000

Subscription revenues:
Consumption-based	46,440	45,427
Term-based	112,995	112,034
Total subscription revenues	159,435	157,461
Consumption	103,433	103,834
Hardware	7,825	8,660
Other	6,632	8,655
Revenue	277,325	278,810

4. Segmental information

The Group's operating segments are aggregated and internally reported to the Group's Chief Executive Officer as three reportable segments: Location, Identity and Fraud on the basis that they provide similar products and services.

'Central overheads' represents Group operating costs such as technology, compliance, finance, legal, people team, information security, premises, Directors' remuneration and PLC costs.

The measure of performance of those segments that is reported to the Group's Chief Executive Officer is adjusted operating profit, being profits before amortisation of acquired intangibles, equity-settled share-based payments, exceptional items, net finance costs and tax, as shown below.

Information on segment assets and liabilities is not regularly provided to the Group's Chief Executive Officer and is therefore not disclosed below.


	Location	Identity	Fraud	Total
Year ended 31 March 2024	£'000	£'000	£'000		£'000
Subscription revenues:
Consumption-based	17,437	26,827	2,176		46,440
Term-based	55,444	24,945	32,606		112,995
Total subscription revenues	72,881	51,772	34,782		159,435
Consumption	7,203	94,533	1,697		103,433
Hardware	-	7,825	-		7,825
Other	982	1,931	3,719		6,632
Total revenue	81,066	156,061	40,198		277,325
Contribution	32,384	42,704	14,812		89,900
Central overheads					(27,766)
Foreign exchange loss					(162)
Expected credit losses of trade receivables					(775)
Adjusted operating profit					61,197
Amortisation of acquired intangibles					(39,447)
Share-based payments charge					(3,488)
Exceptional items					(59,613)
Operating loss					(41,351)
Finance income					262
Finance costs					(9,297)
Income tax credit					1,802
Loss for the year					(48,583)
	Location	Identity	Fraud	Total
Year ended 31 March 2023	£'000	£'000	£'000		£'000
Subscription revenues:
Consumption-based	16,809	27,427	1,191		45,427
Term-based	53,522	27,586	30,926		112,034
Total subscription revenues	70,331	55,013	32,117		157,461
Consumption	5,917	96,269	1,648		103,834
Hardware	-	8,860	-		8,860
Other	642	2,587	5,426		8,655
Total revenue	76,890	162,729	39,191		278,810
Contribution	29,897	47,623	10,259		87,779
Central overheads					(31,198)
Foreign exchange gain/(loss)					3,022
Expected credit losses of trade receivables					214
Adjusted operating profit					59,817
Amortisation of acquired intangibles					(42,758)
Share-based payments charge					(2,313)
Exceptional items					(127,175)
Operating loss					(112,429)
Finance income					636
Finance costs					(7,037)
Income tax expense					(964)
Loss for the year					(119,794)

5. Operating loss


This is stated after charging:	2024	2023
	£'000	£'000

Research and development costs recognised as an operating expense	15,683	20,176
Other technology related costs recognised as an operating expense	30,802	33,817
Total Technology related costs recognised as an operating expense	46,485	53,993

6. Exceptional items


	2024	2023
	£'000	£'000

(a) Integration costs	729	686
(b) Costs associated with team member reorganisations	4,018	1,813
(c) Rationalisation of office locations	159	391
(d) Impairment of goodwill (note 12 & 13)	54,707	122,225
(e) Impairment of intangibles	-	2,797
(f) Acquisition related costs/(income)	-	(1,087)
(g) Loss on disposal of businesses	-	113
(h) Write off of cloud-based software	-	237
Total exceptional costs	59,613	127,175

(a) Integration costs have been incurred in relation to the integration of the Acuant and Cloudcheck acquisitions. This principally relates to consultancy fees paid to advisors in running programmes to deliver revenue and cost synergies from the acquisitions, travel for specific integration meetings, costs relating to the alignment of global systems and business operations, the costs of additional other temporary resources required for the integration and claims associated with the pre acquisition period. To 31 March 2024, the Group expensed £729,000 (2023: £686,000) relating to the integration of Acuant and Cloudcheck. Integration activities have ended during the year ended 31 March 2024. Due to the size and nature of acquisition and integration costs, management consider that they do not reflect the Group's trading performance and so are adjusted to ensure consistency between periods.

(b) Costs associated with team member reorganisations relate to exit costs of personnel leaving the business on an involuntary basis, either as a result of integrating acquisitions or due to reorganisations within our operating divisions as part of a Group-wide restructuring exercise. Due to the nature of these costs, management deem them to be exceptional in order to better reflect our underlying performance. Exit costs outside of these circumstances are treated as an operating expense.

(c) During the year to 31 March 2023, a project was started to rationalise the Group's office locations. In the year to 31 March 2024, the Group expensed £159,000 (2023: £391,000) with £254,000 relating to the costs associated with exiting leased buildings and £95,000 credit relating to a gain on disposal from the sale of an owned property. Due to the nature of these costs, management deem them to be exceptional in order to better reflect our underlying performance. This rationalisation project was finalised at the end of FY24.

(d) As part of the Group's annual impairment testing in the prior year, it was identified that the goodwill allocated to the Identity - Americas group of CGUs was impaired and an impairment charge of £122,225,000 was recognised in the year to 31 March 2023. Due to increases in discount rates during the year to 31 March 2024, an additional impairment charge of £54,707,000 was recognised during the year.

(e) During the year to 31 March 2023, as part of the continued integration of Acuant and simplification of our brands in the Americas region, Acuant was rebranded as IDology. As a result, the value of the Acuant brand included within acquired intangibles was considered to be £nil and an impairment charge of £2,797,000 was recognised.

(f) Acquisition related costs of £nil (2023: £1,087,000 credit). During the year to 31 March 2023, acquisition related costs included:

· Foreign exchange movement on contingent consideration (see note 17). The contingent consideration liabilities related to IDology and Cloudcheck are based on the US Dollar and New Zealand dollar respectively. As a result, the liabilities were retranslated at the balance sheet date with a loss of £379,000 being treated as an exceptional item.

· Legal and professional advisor costs directly attributable to the acquisition of Acuant and the possible offer by GTCR to acquire GBG of £573,000.

· A fair value reassessment was made to the Cloudcheck contingent consideration liability. Based on actual performance in the period following acquisition, it was determined that the performance criteria would not be met in full and a credit of £2,753,000 was taken within exceptional items. The contingent consideration in respect of pre-acquisition tax losses within IDology Inc was also settled during the year, with an additional charge of £806,000 being recognised in exceptional items. £92,000 was also received from the IDology escrow administrator to reimburse pre-acquisition liabilities paid to the seller.

(g) During the year to 31 March 2021, the business disposed of its Marketing Services and Employ and Comply businesses which resulted in an overall profit on disposal. In the year to 31 March 2023, additional costs of £113,000 were incurred in relation to the finalisation of the disposal of these businesses.

(h) During the year to 31 March 2023, a write off of cloud-based software of £237,000 has been recognised. A final agenda decision by the IFRS Interpretations Committee clarified that configuration or customisation costs from cloud computing arrangements do not usually meet the definition of intangible assets under IAS 38 Intangible Assets' and therefore should not be capitalised. As a result, previously capitalised costs that did not satisfy the clarified recognition criteria were written off.

The total cash net outflow during the year as a result of exceptional items was £4,124,000 (2023: £3,934,000 outflow). The tax impact of the exceptional items was a tax credit of £1,158,000 (2023: tax credit of £917,000).

7. Finance income


	2024	2023
	£'000	£'000
Bank interest receivable	73	16
Interest income on multi-year contracts	180	53
Tax interest receivable	9	567

	262	636

8. Finance costs

	2024	2023
	£'000	£'000
Bank interest payable	8,712	6,413
Interest on long service award	21	9
Amortisation of bank loan fees	341	326
Other interest payable	133	14
Unwinding of discount on contingent consideration liability	20	165
Lease liability interest	70	110

	9,297	7,037

9. Income tax (credit)/charge


a) Tax on loss
The tax (credit)/charge in the consolidated statement of profit or loss for the year is as follows:
	2024	2023
	£'000	£'000
Current income tax
UK corporation tax on loss for the year	4,590	4,485
Amounts underprovided in previous years	229	637
Foreign tax	3,985	7,754
	8,804	12,876
Deferred tax
Origination and reversal of temporary differences	(8,054)	(12,539)
Amounts (overprovided) in previous years	(209)	(225)
Impact of change in tax rates	(2,344)	852
	(10,607)	(11,912)

Tax (credit)/charge in the consolidated statement of profit or loss	(1,083)	964
b) Reconciliation of the total tax (credit)/charge

The loss before tax multiplied by the standard rate of corporation tax in the UK would result in a tax charge as explained below:

	2024	2023
	£'000	£'000

Consolidated loss before tax	(50,586)	(118,830)

Consolidated loss before tax multiplied by the standard rate of corporation tax in the UK of 25% (2023: 19%)	(12,596)	(22,578)

Effect of:
Permanent differences	16,886	31,813
Non-taxable income	(1,988)	(809)
Rate changes	(2,344)	775
Recognition of previously unrecognised deferred tax assets	(204)	(266)
Tax provision recognised	-	392
Adjustments in respect of prior years	20	412
Research and development incentives	(417)	(123)
Patent Box relief	(752)	(509)
Share option relief	488	518
Effect of higher taxes on overseas earnings	(896)	(8,660)
Total tax (credit)/charge reported in the consolidated statement of profit or loss	(1,803)	964


The Group's reported effective tax rate for the year was 3.6% (2023: (0.8)%). After adjusting for the impact of amortisation of acquired intangibles, equity-settled share-based payments and exceptional items, the adjusted effective tax rate was 25.2% (2023: 21.3%). These measures are defined in the non-GAAP measures note.

10. Earnings per ordinary share from continuing operations

	Basic pence per share	Diluted pence per share	Adjusted Basic pence per share	Adjusted Diluted pence per share

2024	(19.2)	(19.2)	15.4	15.1

2023	(47.5)	(47.5)	16.7	16.4

Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company from continuing operations by the basic weighted average number of ordinary shares in issue during the year.

Diluted

Diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders from continuing operations by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

	2024	2023
	No.	No.

Basic weighted average number of shares in issue	252,552,462	252,235,803
Basic weighted average number of shares held by the EBT	(161,495)	(269,104)
Dilutive effect of share options	5,247,463	5,030,313
Diluted weighted average number of shares in issue	257,638,430	256,997,012

For the year ended 31 March 2024 and 31 March 2023, potential ordinary shares are antidilutive, as their inclusion in the diluted loss per share calculation would reduce the loss per share, and have therefore been excluded.

Adjusted

Adjusted earnings per share is defined as adjusted operating profit less net finance costs and adjusted tax divided by the basic weighted average number of ordinary shares of the Company.

	2024 £'000	Basic 2024 pence per share	Diluted 2024 pence per share	2023 £'000	Basic 2023 pence per share	Diluted 2023 pence per share

Adjusted operating profit	61,197	24.2	23.8	59,817	23.7	23.3
Less net finance costs	(9,035)	(3.6)	(3.6)	(6,401)	(2.5)	(2.5)
Less adjusted tax	(13,155)	(5.2)	(5.1)	(11,354)	(4.5)	(4.4)
Adjusted earnings	39,007	15.4	15.1	42,062	16.7	16.4

11. Dividends paid and proposed


	2024 £'000	2023 £'000

Declared and paid during the year
Final dividend for 2023 paid in July 2023: 4.00p (final dividend for 2022 paid in July 2022: 3.81p)	10,093	9,600


Proposed for approval at AGM (not recognised as a liability at 31 March)
Final dividend for 2024: 4.20p (2023: 4.00p)	10,609	10,098

12. Non-current assets



	Goodwill £'000	Other intangible assets £'000	Property, plant & equipment £'000	Right-of-use assets £'000
Cost
At 1 April 2023	748,756	357,807	11,467	7,153
Additions	-	171	613	1,322
Disposals	-	(663)	(5,728)	(4,479)
Foreign exchange adjustment	(14,400)	(6,644)	(276)	(68)
At 31 March 2024	734,356	350,671	6,076	3,928

Depreciation, impairment and amortisation
At 1 April 2023	122,362	132,973	7,715	5,704
Charge for the period	-	39,612	1,306	1,155
Impairment (note 13)	54,707	-	-	-
Disposals	-	(663)	(4,439)	(4,462)
Foreign exchange adjustment	(4,335)	(2,315)	(156)	(34)
At 31 March 2024	172,734	169,607	4,426	2,363

Net book value
At 31 March 2024	561,622	181,064	1,650	1,565
At 1 April 2023	626,394	224,834	3,752	1,449

13. Impairment

Summary

At 30 September 2023, GBG's half year end, it was determined that there was an indicator of potential impairment in Identity - Americas and Identity - APAC groups of CGUs. This was as a result of an increase in the applicable discount rate assumptions used in the value-in-use calculations versus the assumption used as at the previous impairment review which was conducted as at 31 March 2023.

Following the completion of this impairment review, the carrying value of the Identity - Americas group of CGUs was reduced to its recoverable amount through recognition of an impairment charge of £54,707,000 against goodwill. This charge was recognised within exceptional items in the consolidated statement of profit or loss. No impairment was identified against the Identity - APAC group of CGUs.

The annual impairment review was performed at 31 March 2024 for all groups of CGUs to which goodwill is allocated. Despite performing an impairment review for the Identity - Americas and Identity - APAC group of CGUs during the half year review as at 30 September 2023, these two groups of CGUs have been reviewed again. The results of the annual impairment review are detailed below.

With the exception of the impairment charge recognised during the period to 30 September 2023 in the half-year review, no impairment was identified in the other groups of CGUs tested at 31 March 2024. When an impairment loss has previously been recognised for goodwill, that impairment loss cannot be reversed in a subsequent period.

Impairment review

Goodwill and intangible assets acquired through business combinations is allocated to the CGUs that are expected to benefit from that business combination and has been allocated for impairment testing purposes to seven groups of CGUs as follows:

§ Location CGU (represented by the Location operating segment excluding the Location - APAC Unit)

§ Location - APAC CGU (part of the Location operating segment)

§ Identity - EMEA CGU (part of the Identity operating segment)

§ Identity - APAC CGU (part of the Identity operating segment)

§ Identity - Americas CGU (part of the Identity operating segment)

§ Fraud - Investigate CGU (part of the Fraud operating segment)

§ Fraud - APAC CGU (part of the Fraud operating segment)

	2024			2023
	Goodwill	Acquired Intangibles	Total	Goodwill	Acquired Intangibles	Total
Name	£'000	£'000	£'000	£'000	£'000	£'000

Location Unit	61,622	7,912	69,534	61,775	10,634	72,409
Location - APAC Unit	2,228	468	2,696	2,336	614	2,950
Identity - EMEA Unit	103,070	21,990	125,060	104,484	26,588	131,072
Identity - APAC Unit	73,180	21,631	94,811	75,325	26,402	101,727
Identity - Americas Unit	304,372	127,301	431,673	364,662	157,251	521,913
Fraud - Investigate Unit	3,608	1,661	5,269	3,608	2,821	6,429
Fraud - APAC Unit	13,542	33	13,575	14,204	456	14,660
	561,622	180,996	742,618	626,394	224,766	851,160

Key Assumptions Used in Value in Use Calculations - Base Case

The key assumptions for value in use calculations are those regarding the forecast revenue growth, discount rates and long-term growth rates.

The Group prepares cash flow forecasts using:

· budgets and forecasts approved by the Directors covering a 5 year period;

· an appropriate extrapolation of cash flows is applied beyond this to determine a terminal value using a combination of:

o for the Identity segment only - industry analysis of market growth rates to 2032; and

o a long-term average growth rate applied to perpetuity for the geographic market being assessed.

Forecast revenue growth rates, margins and cash flow conversion rates were based on past experience, industry market analysis and strategic opportunities specific to the group of CGUs being assessed.

The use of a pre-perpetuity projection period of more than five years for the Identity segment is an accounting judgement. It was considered that beyond the initial period covered by budgets and forecasts, it was most appropriate to include a further period of three years of growth rates (2023: four years of growth rates) that are higher than the long-term average growth rates for that particular region. The growth rates were considered to be reliable since they were determined on the basis of multiple pieces of independent, external industry and market research covering the Identity and Identity Fraud markets which supported that, over this period, this market is expected to grow at a higher rate than the long-term growth rates of these geographic markets as a whole.

Beyond this forecast period, the long-term average growth rate is not greater than the average long-term retail growth rate in the territory where the group of CGUs is based UK - 2.0%; USA - 2.5%; Australia - 3.0% (2023: UK - 2.0%; USA - 2.4%; Australia - 3.6%).

The Directors estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the individual CGU. Growth rates reflect long-term growth rate prospects for the economy in which the CGU operates.


	2024		2023
Name	Pre-tax discount rate	Growth rate (in perpetuity)	Pre-tax discount rate	Growth rate (in perpetuity)
	%	%	%	%
Location Unit	13.7%	2.0%	13.5%	2.0%
Location - APAC Unit	12.7%	3.0%	13.6%	3.6%
Identity - EMEA Unit*	13.4%	2.0%	13.5%	2.0%
Identity - APAC Unit*	12.6%	3.0%	13.6%	3.6%
Identity - Americas Unit*	12.2%	2.5%	12.3%	2.4%
Fraud - Investigate Unit	13.8%	2.0%	13.5%	2.0%
Fraud - APAC Unit	12.7%	3.0%	13.6%	3.6%

* For the year to 31 March 2024, the following revenue growth rates have been applied to the three year period from 1 April 2029 to 31 March 2032 for these groups of CGUs: Identity - EMEA 8.0% (2023: 10.3%), Identity - APAC 10.0% (2023: 12.5%) and Identity - Americas 14.7% (2023: 14.7%).

The headroom/(impairment) (i.e. the excess/(shortfall) of the value of discounted future cash flows over the carrying amount of the CGU) under the base case scenario was as follows:


	2024	2023
Name	Base case¹ £'000	Base case¹ £'000

Location Unit	246,384	102,029
Location - APAC Unit	15,876	12,298
Identity - EMEA Unit	36,439	32,301
Identity - APAC Unit	34,658	2,741
Identity - Americas Unit	4,144	(122,208)
Fraud - Investigate Unit	62,206	26,628
Fraud - APAC Unit	62,710	49,372

¹ The excess of the recoverable amount over the carrying amount of the CGU before applying sensitivities

The above assessment is stated after the goodwill impairment recorded at 30 September 2023. The carrying value of the Identity - Americas group of CGUs was reduced to its recoverable amount through recognition of an impairment charge of £54,707,000 against goodwill during the period to 30 September 2023. Further details of the reason for this impairment are in the summary section above and in the Financial Review.

This charge is recognised within exceptional items in the consolidated statement of profit or loss. Any additional adverse movement in the key assumptions at the balance sheet date would lead to a further impairment of goodwill.

Key Assumptions Used in Value in Use Calculations - Sensitised Case

The Group has considered the impact of changes in future revenue growth and key assumptions on the base case value in use model, to create a sensitised value in use model. The table below shows the impact on the base case headroom as a result of the following changes, with all other assumptions being unchanged:

	0.1% change in annual revenue growth forecast	0.1% change in discount rate	0.1% change in long-term growth rate
Name	£'000	£'000	£'000

Location Unit	(906)	(3,660)	(2,770)
Location - APAC Unit	(312)	(279)	(225)
Identity - EMEA Unit	(1,515)	(1,991)	(1,204)
Identity - APAC Unit	(901)	(2,026)	(1,364)
Identity - Americas Unit¹	(9,437)	(6,616)	(4,333)
Fraud - Investigate Unit	(320)	(755)	(569)
Fraud - APAC Unit	(767)	(1,137)	(912)

A sensitised model has been included below, applying the cumulative impact of:

· Increasing pre-tax discount rates by 50bps (2023: 25bps), to reflect potential increases in government bond yields and associated risk-free rates. We have increased the sensitivity of this assumption given the greater volatility observed in discount rates in the last 12 month period;

· Decreasing average annual growth forecasts o between 2025 and 2032 by 100bps (2023: average annual growth forecasts between 2029 and 2032 50bps), to reflect the potential for a worse than predicted market outlook; and

· Decreasing long term growth rates by 25bps (2023: 25bps), to reflect a worse than predicted long-term global economic outlook.

It was not deemed necessary to sensitise the operating margin of the CGU given the strategy for growth. Despite the forecast growth the unsensitised forecast cash flows do not assume any operating leverage which would increase operating profit margins. Management determined that should growth be slower than estimated then there was adequate headroom in the estimates of costs that operating margins could be preserved.

The headroom/(impairment) (i.e. the excess of the value of discounted future cash flows over the carrying amount of the CGU) under the sensitised scenario is below:


					2024	2023
Name	Base case headroom £'000	Change in headroom increasing discount rate by 50bps £'000	Change in headroom decreasing annual revenue growth rates during the forecast period by 100bps £'000	Change in headroom decreasing long term growth rates by 25bps £'000	Sensitised¹ £'000	Sensitised¹ £'000

Location Unit	246,384	(17,491)	(13,352)	(5,692)	209,849	95,680
Location - APAC Unit	15,876	(1,319)	(977)	(440)	13,140	11,622
Identity - EMEA Unit	36,439	(9,508)	(13,757)	(2,292)	10,882	23,337
Identity - APAC Unit	34,658	(9,560)	(8,209)	(2,589)	14,300	(2,776)
Identity - Americas Unit	4,144	(31,361)	(36,990)	(8,140)	(72,347)	(157,506)
Fraud - Investigate Unit	62,206	(3,607)	(2,962)	(1,164)	54,473	25,445
Fraud - APAC Unit	62,710	(5,369)	(3,788)	(1,793)	51,760	46,517

¹ Headroom after adjusting future cash flows and key assumptions to create a sensitised value in use model

The sensitised scenario would lead to impairment of £72,347,000 for Identity - Americas. Therefore, a reasonably possible change in the value of the key assumptions could cause CGU carrying amount to exceed its recoverable amount.

When considering goodwill impairment, the break-even rate at which headroom within each CGU is reduced to £nil, if all other assumptions remain unchanged, has also been considered.


	2024			2023¹
Name	Pre-tax discount rate	Decrease in base case cash flows	Revenue growth rate (2029 to 2032)	Pre-tax discount rate	Decrease in base case cash flows	Revenue growth rate (2029 to 2032)

Location Unit	56.7%	(78.0)%	n/a	28.7%	(58.0)%	n/a
Location - APAC Unit	67.7%	(85.0)%	n/a	48.6%	(80.0)%	n/a
Identity - EMEA Unit	16.5%	(23.0)%	(1.4)%	15.8%	(20.0)%	4.5%
Identity - APAC Unit	15.8%	(27.0)%	(4.7)%	13.9%	(3.0)%	11.4%
Identity - Americas Unit	12.3%	(1.0)%	14.2%	n/a	n/a	n/a
Fraud - Investigate Unit	248.9%	(92.0)%	n/a	63.7%	(80.0)%	n/a
Fraud - APAC Unit	53.9%	(82.0)%	n/a	41.1%	(76.0)%	n/a

With the exception of the Identity - Americas groups of CGUs, the Directors do not believe that any reasonably possible changes in the value of the key assumptions noted above would cause a CGU carrying amount to exceed its recoverable amount.

14. Trade and other receivables


	2024 £'000	2023 £'000
Current
Trade receivables	57,157	52,892
Allowance for unrecoverable amounts	(2,416)	(2,394)
Net trade receivables	54,741	50,498
Prepayments	9,441	10,818
Accrued income	8,659	3,997
	72,841	65,313
Non-current
Prepayments	493	701
Accrued income	5,730	3,604
	6,223	4,305

15. Trade and other payables


	2024 £'000	2023 £'000

Trade payables	13,568	11,427
Other taxes and social security costs	4,983	3,996
Accruals	25,118	21,889


	43,669	37,312

16. Loans and borrowings

Bank loans

During the year to 31 March 2024, the Group drew down an additional £10,000,000 and made repayments of $20,000,000 (£15,967,000) and £17,000,000. The outstanding balance on the loan facility at 31 March 2024 was £102,175,000 (2023: £127,470,000) representing £nil in GBP (2023: £7,000,000) and $129,000,000 in USD (2023: $149,000,000).

The facility was due to expire in July 2026 but on 27 October 2023, the Group exercised the second of the one-year extension options on the existing revolving credit facility so that the Group has access to a £175 million facility until July 2026 and £140 million until July 2027. A further arrangement fee of £286,000 was payable for this extension. Loan arrangement fees have been netted off the loan balance.

The debt bears an interest rate of Sterling Overnight Index Average (SONIA) for GBP drawdowns or Secured Overnight Financing Rate (SOFR) for USD drawdowns plus a margin of between 1.6% and 2.4% depending on the Group's current leverage position.

The loan is secured by a fixed and floating charge over the assets of the Group.



	2024 £'000	2023 £'000

Opening bank loan	126,411	128,226
New borrowings	10,000	12,000
Agency fee paid	(56)	-
Loan fees paid for extension	(286)	(357)
Repayment of borrowings	(32,967)	(22,394)
Amortisation of loan fees	341	326
Foreign currency translation adjustment	(2,328)	8,610
Closing bank loan	101,115	126,411

Analysed as:
Amounts falling due within 12 months	-	-
Amounts falling due after one year	101,115	126,411

	101,115	126,411

Analysed as:
Bank loans	102,175	127,470
Unamortised loan fees	(1,060)	(1,059)
	101,115	126,411

17. Contingent consideration

	2024	2023
	£'000	£'000

At 1 April	1,237	7,776
Remeasurement of contingent consideration charged to profit or loss	20	806
Unwinding of discount	-	165
Release of contingent consideration	-	(2,753)
Foreign exchange - unrealised	(57)	234
Settlement of consideration	(1,200)	(4,991)
At 31 March	-	1,237

Analysed as:
Amounts falling due within 12 months	-	1,237
Amounts falling due after one year	-	-
At 31 March	-	1,237

The opening balance at 1 April 2022 included £3,842,000 related to the pre-acquisition tax assets within IDology Inc. A value equivalent to the cash benefit GBG received for these assets was payable to the sellers once the cash benefit had been received by GBG. In December 2022, IDology received the cash refund which was subsequently paid to the sellers. There are no further payments due in respect of the IDology acquisition.

The remaining contingent consideration was in respect of the acquisition of Cloudcheck during the year ended 31 March 2022. In July 2023, a payment was made based on performance in the first of two earn-out periods. Based on actual performance during the year, it has been determined that the remaining performance criteria has not been met and so there are no further payments due in respect of the Cloudcheck acquisition.

19. Alternative performance measures

Management assess the performance of the Group using a variety of alternative performance measures. In the discussion of the Group's reported operating results, alternative performance measures are presented to provide readers with additional financial information that is regularly reviewed by management. However, this additional information presented is not uniformly defined by all companies including those in the Group's industry. Accordingly, it may not be comparable with similarly titled measures and disclosures by other companies. Additionally, certain information presented is derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted GAAP measure. Such measures are not defined under IFRS and are therefore termed 'non-GAAP' measures. These non-GAAP measures are not considered to be a substitute for or superior to IFRS measures and should not be viewed in isolation or as an alternative to the equivalent GAAP measure.

The Group's consolidated statement of profit or loss and segmental analysis separately identify trading results before certain items. The Directors believe that presentation of the Group's results in this way is relevant to an understanding of the Group's financial performance, as such items are identified by virtue of their size, nature or incidence. This presentation is consistent with the way that financial performance is measured by management and reported to the Board and assists in providing a meaningful analysis of the trading results of the Group. In determining whether an event or transaction is presented separately, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. Examples of charges or credits meeting the above definition, and which have been presented separately in the current and/or prior years include amortisation of acquired intangibles, share-based payments charges, acquisition related costs and business restructuring programmes. In the event that other items meet the criteria, which are applied consistently from year to year, they are also presented separately.

In respect of revenue performance measures, the primary measure is revenue growth at constant currency.

Where the current or prior year revenue has been impacted either by acquisitions/disposal or significant non-repeating revenue, alternative measures are presented to provide a more reflective method to compare performance from one period to another.

Organic revenue growth is used to remove the revenue from businesses acquired or disposed within the previous 12 months. Organic growth is defined by the Group as year-on-year continuing revenue growth, excluding acquisitions which are included only after the first anniversary following their purchase and disposed businesses.

Pro forma revenue growth is used to remove the impact of material non-repeating revenue. For example, in the year to 31 March 2023 pro forma revenue was presented to remove revenue from the US Government's stimulus programme and exceptional cryptocurrency volume that arose during the year to 31 March 2022.

The following are the key non-GAAP measures used by the Group:

Constant currency

Constant currency means that non-Pound Sterling revenue in the comparative period is translated at the same exchange rate applied to the current year non-Pound Sterling revenue. This therefore eliminates the impact of fluctuations in exchange rates on underlying performance and enables measurement of performance on a comparable year-on-year basis without the impact of foreign exchange movements.



	2024
	Location £'000		Identity £'000		Fraud £'000		Total £'000

Revenue	81,066		156,061		40,198		277,325
Constant currency adjustment	-		-		-		-
Revenue at constant currency	81,066		156,061		40,198		277,325




		2023
		Location £'000		Identity £'000		Fraud £'000		Total £'000

Revenue		76,890		162,729		39,191		278,810
Constant currency adjustment		(1,321)		(5,547)		(1,890)		(8,758)
Revenue at constant currency		75,569		157,182		37,301		270,052
		Growth
		Location %		Identity %		Fraud %		Total %

Revenue		5.4%		(4.1%)		2.6%		(0.5%)
Constant currency adjustment		1.9%		3.4%		5.2%		3.2%
Revenue at constant currency		7.3%		(0.7%)		7.8%		2.7%

Normalised items

These are recurring items which management considers could affect the underlying results of the Group.

These include:

· amortisation of acquired intangibles; and

· share-based payment charges

Normalised items are excluded from statutory measures to determine adjusted results.

Adjusted operating profit

Adjusted operating profit means operating profit before exceptional items and normalised items. Adjusted results allow for the comparison of results year-on-year without the potential impact of significant one-off items or items which do not relate to the underlying performance of the Group. Adjusted operating profit is a measure of the underlying profitability of the Group.

	2024	2023
	£'000	£'000

Operating loss	(41,351)	(112,429)
Amortisation of acquired intangibles	39,447	42,758
Share-based payment charges	3,488	2,313
Exceptional items	59,613	127,175
Adjusted operating profit	61,197	59,817

Adjusted operating profit margin

Adjusted operating profit margin is calculated as adjusted operating profit as a percentage of revenue.

Adjusted operating expenses

Adjusted operating expenses means reported operating profit before exceptional items and normalised items. Adjusted operating expenses allow for the comparison of results year-on-year without the potential impact of significant one-off items or items which do not relate to the underlying operating expenses of the Group. Adjusted operating expenses is a measure of the underlying operating expenses of the Group.

	2024	2023
	£'000	£'000

Reported operating expenses	234,934	313,481
Amortisation of acquired intangibles	(39,447)	(42,758)
Share-based payments	(3,488)	(2,313)
Impairment of goodwill	(54,707)	(122,225)
Other exceptional items	(4,906)	(4,950)
Adjusted operating expenses	132,386	141,235

Cash conversion %

This is calculated as cash generated from operations in the consolidated cash flow statement, adjusted to exclude cash payments in the year for exceptional items, as a percentage of adjusted operating profit. This measures how efficiently the Group's operating profit is converted into cash.


	2024	2023
	£'000	£'000

Cash generated from operations before tax payments (from consolidated cash flow statement)	53,673	38,570

Opening unpaid exceptional items	1,251	1,372
Total exceptional items	59,613	127,175
Non-cash exceptional items	(55,836)	(123,362)
Closing unpaid exceptional items	(904)	(1,251)
Cash outflow for exceptional items	4,124	4,474
Cash generated from operations before tax payments and exceptional items paid	57,797	42,504

Adjusted EBITDA	63,823	63,147

Cash conversion %	90.6%	67.3%

Adjusted EBITDA

Adjusted EBITDA means adjusted operating profit before depreciation and amortisation of non-acquired intangibles. Adjusted EBITDA is a measure of the underlying cash generation and the profit measure used in our covenant compliance calculations under the RCF agreement.

	2024	2023
	£'000	£'000

Adjusted operating profit	61,197	59,817
Depreciation of property, plant and equipment	1,306	1,771
Depreciation of right-of-use assets	1,155	1,491
Amortisation of non-acquired intangibles	165	68
Adjusted EBITDA	63,823	63,147

Adjusted tax

Adjusted tax means income tax charge before the tax impact of amortisation of acquired intangibles, share-based payment charges and exceptional items. This provides an indication of the ongoing tax rate across the Group.

Adjusted effective tax rate

The adjusted effective tax rate means adjusted tax divided by adjusted earnings.

	2024				2023
	Loss before tax	Income tax charge	Effective tax rate	Profit before tax		Income tax charge	Effective tax rate
	£'000	£'000	%	£'000		£'000	%

Reported effective tax rate	(50,386)	(1,803)	3.6%	(118,830)		964	(0.8%)

Add back:
Amortisation of acquired intangibles	39,447	13,391	(109.5%)	42,758		9,463	(12.9%)
Equity-settled share-based payments	3,488	409	(55.1%)	2,313		10	(0.5%)
Exceptional items	59,613	1,158	186.2%	127,175		917	35.5%

Adjusted effective tax rate	52,162	13,155	25.2%	53,416		11,354	21.3%

Adjusted earnings per share ('Adjusted EPS')

Adjusted EPS represents adjusted earnings divided by a weighted average number of shares in issue and is disclosed to indicate the underlying profitability of the Group. Adjusted EPS is a measure of underlying earnings per share for the Group. Adjusted earnings represents adjusted operating profit less net finance costs and income tax charges. Refer to note 10 for calculation.

Net (debt)/cash

This is calculated as cash and cash equivalent balances less outstanding external loans. Unamortised loan arrangement fees are netted against the loan balance in the financial statements but are excluded from the calculation of net cash/debt. Lease liabilities following the implementation of IFRS 16 are also excluded from the calculation of net cash/debt since they are not considered to be indicative of how the Group finances the business. This is a measure of the strength of the Group's balance sheet.

	2024	2023
	£'000	£'000

Cash and cash equivalents	21,321	21,552

Loans on balance sheet	101,115	126,411
Unamortised loan arrangement fees	1,060	1,059
External loans	102,175	127,470

Net debt	(80,854)	(105,918)

Debt leverage

This is calculated as the ratio of net (debt)/cash to adjusted EBITDA. This demonstrates the Group's liquidity and its ability to pay off its incurred debt.


	2024	2023
	£'000	£'000

Net debt	(80,854)	(105,918)

Adjusted EBITDA	63,823	63,147

Debt leverage	1.27	1.68

Website

The Investors section of the Company's website, (www.gbgplc.com/investors), contains detailed information on news, press releases,

key financial information, annual and interim reports, share price information, dividends and key contact details.

Our share price is also available on the London Stock Exchange website. The following information is a summary and readers are encouraged to view the website for more detailed information.

Dividend Reinvestment Plan

The Company offers a Dividend Reinvestment Plan that enables shareholders to reinvest cash dividends into additional shares in the

Company. Application forms can be obtained from Equiniti.

Share scams

Shareholders should be aware that fraudsters may try and use high pressure tactics to lure investors into share scams. Information on

share scams can be found on the Financial Conduct Authority's website, www.fca.org.uk/scams.

Financial calendar 2024

Annual General Meeting

Dividend Ex-Div Date

Dividend Record Date

Dividend Payment Date

23 July 2024

20 June 2024

21 June 2024

2 August 2024

Shareholder enquiries

GBG's registrar, Equiniti, can deal with any enquiries relating to your shareholding, such as a change of name or address or a replacement of a share certificate. Equiniti's Shareholder Contact Centre can be contacted on +44 (0) 371 384 2365. Lines are open from 8:30 a.m. to 5:30 p.m. (UK time), Monday to Friday, excluding public holidays in England and Wales. You can also access details of your shareholding and a range of other shareholder services by registering at www.shareview.co.uk.

Company Secretary & Registered Office

Annabelle Burton

GB Group plc

The Foundation, Herons Way

Chester Business Park

Chester

CH4 9GB

United Kingdom

Registered in England & Wales

Company Number: 2415211

T: +44 (0)1244 657333

E: enquiries@gbgplc.com

W: www.gbgplc.com

Auditor

PricewaterhouseCoopers LLP

1 Hardman Square

Manchester

M3 3EB

Solicitors

Squire Patton Boggs (UK) LLP

1 Spinningfields

1 Hardman Square

Manchester

M3 3EB

Ashurst LLP

London Fruit & Wool Exchange

1 Duval Square

London

E1 6PW

Nominated Advisor and Joint Broker

Numis Securities Limited

45 Gresham Street

London

EC2V 7BF

Joint Broker

Barclays Bank plc

1 Churchill Place,

Canary Wharf,

London,

E14 5HP

Registrars

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

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