TIDMGBG
RNS Number : 4197K
GB Group PLC
22 April 2020
Embargoed until 7.00 a.m. 22 April 2020
GB GROUP PLC
("GBG" or the "Company")
Pre-Close Trading Statement and Covid-19 Update
GBG (AIM:GBG), the identity data intelligence specialist,
provides an update on its trading performance for the year to 31
March 2020, in advance of the release of its final results.
2020 2019 Total 2020 Organic 2019 Organic
Growth Revenue Revenue Revenue
(CCY) Growth
(CCY)
Total revenue (1) GBP199m GBP144m 38.7% GBP158m GBP143m 10.6%
Adjusted operating GBP47m GBP32m 46.7% - - -
profit (1&2)
Net (debt)/cash (GBP35m) (GBP66m) - - - -
-- Total revenue for the year is expected to grow by 38.7% at
GBP199 million, ahead of market consensus (1) . On a constant
currency basis, organic revenues were up 10.6%.
-- GBG expects to report adjusted operating profit (2) of
approximately GBP47 million, a 46.7% increase on last year and also
ahead of market consensus (1) .
-- Net debt balance at 31 March 2020 was GBP35 million (2019:
GBP66 million net debt). The strong cash generation has reduced the
leverage to 0.7x (2019: 1.9x).
"CCY" indicates figure reported on a constant currency basis.
Constant currency means that non-Sterling revenue in the
comparative period is translated at the same exchange rate applied
to the current year non-Sterling revenue.
(1) Company compiled consensus of analyst estimates for year
ending 31 March 2020: Revenue of GBP196.3 million and adjusted
operating profit of GBP44.6 million.
(2) Adjusted operating profit means profit before amortisation
of acquired intangibles, share-based payments, exceptional items,
interest and tax. This measure is not defined under IFRS but
Management believe that this Alternative Performance Measure (APM)
is a more appropriate metric to understand the underlying
performance of the Group.
Chris Clark, CEO of GBG, commented:
"GBG has delivered a strong set of results which are ahead of
market expectations despite some, albeit limited, financial impact
from Covid-19 in the final quarter. I would like to thank everyone
at GBG for their hard work and professionalism in such a
challenging and uncertain environment. Their commitment has been
the one constant in a time when everything else is so variable. We
have acted decisively to prioritise our teams' well-being and
safety, the service to our customers and the strength of our
business.
Looking further forward, I take much confidence from FY20 being
a record revenue and profit outcome with the business delivering
good organic growth across our product solutions and geographies.
Although it is yet to become clear on what a post Covid-19 world
will look like, this recent performance will provide a good
foundation to weather this crisis and leaves us well-positioned
when it is over."
Covid-19 Update
GBG operates in global markets for location, identity and fraud
solutions but has not been immune to the current crisis. We saw
some modest impact to revenues in the period starting in China in
January and more broadly in Asia Pacific from February. Of note,
our Chinese operation is now coming back out of the shutdown.
The full effect on the business is still unfolding and we are
seeing different levels of impact depending on the customer
vertical, product solution and geography. While it remains early in
the Covid-19 crisis, some business areas are still experiencing
growth while others are seeing reduced demand.
GBG has been quick to adapt to the changing environment. Our
team members globally are already used to working remotely, which
has largely mitigated the operational impact from Covid-19. We
continue to work very closely with and support our customers
through these times. Where suitable and appropriate, our teams are
selling remotely to customer verticals, which are most resilient to
the crisis and/or where there is additional demand from our
customers.
Financially, the Board supports the prudent and decisive action
taken by management to reduce discretionary costs and preserve
liquidity. These actions include an immediate Group-wide pay freeze
and a pausing of all non-essential recruitment. Project spend is
being carefully assessed and restricted to those critical to the
long-term success of GBG. Executive Directors' bonus payments
accrued for FY20 have been suspended.
In addition to the prompt actions taken by management to
conserve cash, the Board does not intend to declare a final
dividend in respect of financial year 2020. This prudent step helps
both preserve short term liquidity and also provides additional
financial flexibility to support and invest as GBG comes out of the
Covid-19 pandemic. While the uncertainty surrounding the duration
of the crisis continues, the Board has concluded that it is also
prudent to withdraw guidance from the market.
It should be emphasised that GBG has a strong balance sheet with
intact bank draw down facilities, good liquidity and a high
proportion of annual recurring licence revenue. The group has
significant financial headroom of GBP75 million in addition to an
unused but available accordion option of GBP30 million.
Our strong financial position, diversified, global blue-chip
client list and market leading products gives the Board confidence
that the Group is well positioned to withstand the pandemic and
that GBG's long-term prospects in a post-Covid-19 environment
remain attractive.
Note: Certain information contained in this announcement would
have constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of GBG by John Constantin, Company Secretary of GBG.
- Ends -
Fo r further information, please contact:
GBG
Chris Clark, CEO
Dave Wilson, CFO & COO 01244 657333
Pe el Hunt LLP (Nominated Adviser and Broker)
Edward Knight
Nick Prowting
Ed Allsopp 020 7418 8900
Tulchan
James Macey White
Matt Low
Deborah Roney 020 7353 4200
Website www.gbgplc.com/investors
About GBG
GBG offers a range of solutions that help organisations quickly
validate and verify the identity and location of their
customers.
Our market-leading technology, data and expertise help our
customers improve digital access, deliver a seamless experience and
establish trust so that they can transact quickly, safely and
securely with their customers online.
Headquartered in the UK and with over 1,000 team members across
16 markets, we work with 19,000 customers in over 70 countries.
Some of the world's best-known businesses rely on GBG to provide
digital services and keep the economy moving, from US e-commerce
giants to Asia's biggest banks and European household brands.
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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END
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