GB Group PLC Half-year trading update (5744Q)

TIDMGBG

RNS Number : 5744Q

GB Group PLC

19 October 2023

 
 Embargoed until 7.00 a.m.   Thursday, 19 October 2023 
 

GB GROUP PLC

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

Half-year trading update

Today, GBG, (AIM: GBG) the experts in digital location, identity verification and fraud software, provides an update on its performance for the six months to 30 September 2023.

Summary

The Board is pleased with the first half performance, with excellent progress to drive simplification t hat will increase the effectiveness of our business . This ongoing group-wide focus has resulted in cost efficiencies which underpin the Board's confidence that GBG will deliver its FY24 profit expectations.

 
                                                            1H24       1H23 
                                                    (Approximate 
                                                        figures) 
------------------------------------------------  --------------  --------- 
 Revenue                                               GBP132.4m  GBP133.8m 
 Adjusted operating profit excluding FX gain            GBP23.4m   GBP21.9m 
    Adjusted operating margin excluding FX gain            17.7%      16.4% 
 Net gain on foreign exchange                            GBP0.3m    GBP6.2m 
 Adjusted operating profit                              GBP23.7m   GBP28.1m 
 

First-half revenue was approximately GBP132.4 million (1H23: GBP133.8 million), which represents constant currency growth of 1.8%. Excluding the impact of the year-on-year decline in cryptocurrency customer revenues, first-half growth was 3.3%.

Location delivered high single-digit constant currency revenue growth through new customer and partner wins alongside upsell activity, despite continued weakness in e-commerce volumes, while Fraud achieved low double-digit revenue growth driven by important contract renewals and new business wins.

In line with our expectations, Identity revenues declined by approximately 3% on a constant currency basis. Excluding the year-on-year decline in cryptocurrency customer revenue, Identity was broadly flat, with strong growth in APAC offsetting a tough prior-year comparator in the Americas. It is also encouraging that, as expected, monthly transaction volumes in Identity have stabilised and we still expect some year-on-year revenue growth in the latter part of the year.

Profitability

Gross margin was approximately 69.2% (1H23: 71.1%) reflecting the revenue mix in the period. As previously indicated, GBG has continued to focus on group-wide efficiencies while maintaining disciplined investment to capitalise on the long-term opportunity in our markets. We have made excellent progress; 1H24 operating expenses were approximately GBP6 million lower than the prior year despite inflationary pressure.

Overall, we expect first-half adjusted operating profit of approximately GBP23.7 million.

The ongoing focus on simplicity and efficiency underpins the Board's confidence that GBG will deliver its FY24 profit expectations.

Balance sheet

GBG's financial position remains strong; our year-to-date cash conversion has improved to approximately 100% (1H23: 57.5%) due to a reduction in one-off items. Net debt as at 30 September 2023 was approximately GBP104.8 million (31 March 2023: GBP105.9 million) after the GBP10.1 million payment of the FY23 final dividend.

GBG intends to release its half-year results on Tuesday, 28 November 2023.

For further information, please contact:

 
 GBG 
  Chris Clark, CEO & David Ward, CFO            [phone] 
  Richard Foster, Investor Relations            [phone] 
 Numis (Nominated Adviser and Corporate 
  Broker) 
  Simon Willis & Joshua Hughes                [phone] 
                                          ------------------------- 
 Barclays (Corporate Broker) 
  Rob Mayhew & Stuart Jempson                  [phone] 
                                          ------------------------- 
 Teneo (Financial PR)                          [phone] 
  James Macey White & Matt Low                        [e-mail] 
                                          ------------------------- 
 Website                                   www.gbgplc.com/investors 
                                          ------------------------- 
 

About GBG

GBG is the leading expert in global digital identity. We combine our powerful technology, the most accurate data coverage and our talented team to deliver award-winning location intelligence, identity verification and fraud prevention solutions.

With over 30 years' experience, we bring together a team of over 1,250 dedicated experts with local industry insight from around the world to make it easy for businesses to identify and verify customers and locations, protecting everyone, everywhere from fraud.

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 Twitter @gbgplc.

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October 19, 2023 02:00 ET (06:00 GMT)