TIDMGBG
RNS Number : 8488C
GB Group PLC
22 October 2020
Embargoed until 7.00 a.m. 22 October 2020
GB GROUP PLC
("GBG" or the "Company")
Pre-Close Trading Statement and Notice of Results
Implementing strategy successfully through the pandemic
GBG, (AIM:GBG) the global identity data intelligence specialist,
provides an update on its trading performance for the six months to
30 September 2020, ahead of releasing its half-year results.
Business Performance
GBG has performed well during the period. This has allowed the
Company to continue to invest in its long-term growth, whilst also
maintaining good discipline in cash management and operational
controls, supported by resilient business systems.
This has all been made possible by the commitment of our team
members across the globe, who have continued to deliver excellent
service to our customers throughout the first phase of the COVID-19
pandemic.
GBG has a diverse customer base, in terms of geography and
industry sector, who all share a common need to accelerate their
digitalisation programmes. Not all sectors have been resilient in
terms of the impact of COVID-19. However, GBG's location, identity
and fraud services remain highly relevant as businesses accelerate
their digital shift and move business models to deliver a greater
proportion of services online.
Financial Position
As a consequence of the above, GBG's total revenue for the
period is expected to be GBP103 million. On a constant currency
basis, organic revenues have increased by 10.0%. Growth was
underpinned by a strong performance in the USA from a specific
one-off customer project, which is not expected to have a material
impact into the second half of the year.
Increased revenue, combined with disciplined cost management,
means that we expect to report adjusted operating profit of
approximately GBP27 million, a 26% increase on last year.
This combination of strong trading performance, effective cash
management and GBG's highly cash-generative business model, has
reduced the net debt balance at 30 September 2020 to GBP2.7 million
(2019: GBP53.8 million net debt). This is a GBP32.3 million
improvement since 31 March 2020.
Interim Dividend
In April 2020 the Board took prudent steps to preserve
liquidity, including the decision not to pay an annual dividend and
deferral of Executive Director bonuses. However, reflecting the
strong first-half performance and confidence in the outlook for the
business, the Board intends to declare an interim dividend of 3.00
pence per share at the date of the half-year results. We will also
release the Executive Director bonuses accrued in FY20. Future
dividends, as always, will remain subject to Group performance,
cashflow and the economic environment. The Board is, however,
hopeful that continued progress will enable GBG to maintain a
progressive dividend policy.
GBG also expects to continue its long-term incentive programme
for Executive Directors, under its existing share matching scheme.
Executive Directors make market purchases of GBG shares in order to
participate, demonstrating their confidence in the future outlook
for the business.
Outlook
Economies and businesses are adjusting to the next phase of the
global pandemic but the Board is confident that GBG's diverse
customer base will continue to be a buffer against any significant
revenue impact caused by COVID-19. Although we do not expect to see
a material benefit from the one-off USA customer contract in H2
FY21, we expect full year revenue for the Group to be flat to
marginally ahead of FY20 on an underlying basis and which is ahead
of current consensus(1) .
Chris Clark, CEO of GBG, commented:
"I'm very pleased with our performance in the first half. Whilst
the rate of new customer contracts has slowed, as companies
focussed on their own responses to COVID-19, we still continued to
win new business and have maintained high renewal rates with our
existing customers. We have been prudent in cash management, which,
combined with our highly cash-generative business model, enabled us
to significantly reduce our net debt in the period.
One impact of COVID-19 has been the rapid digitalisation of
businesses and this is likely to continue. For consumer-facing
companies to be successful online they need to know who and where
their customers are. They need to meet stringent regulations and
protect themselves from fraud, while keeping the customer journey
as smooth as possible. Our solutions are a key enabler of these
factors and this leaves us well-positioned for the future."
Notice of results
The Group intends to publish its half-year results for the six
months to 30 September 2020 on 8 December 2020.
Note:
(1) Analyst Consensus on GBG can be found in the Investor section of our website:
https://www.gbgplc.com/investors/analyst-consensus/#content
- Ends -
Fo r further information, please contact:
GBG
Chris Clark, CEO
Dave Wilson, CFO & COO 01244 657333
Peel Hunt LLP (Nominated Adviser and Broker)
Edward Knight, Edward Allsopp & Nick Prowting 020 7418 8900
Tulchan Communications LLP 020 7353 4200
James Macey White, Matt Low & Tom Blundell GBG@tulchangroup.com
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 countries, we work with 20,000 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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