GB Group sees interim profit slip, keeps full-year outlook

what happened

The British company, which also specialises in protecting against digital crime, reported that revenues for the six months to 30 September rose 1.4% on a constant currency basis to £139.5m. Adjusted operating profit, however, fell to £27m from £29.5m, following extra investment in its GBG Go platform.

GB also flagged about £4.5m of exceptional costs, mainly tied to cost efficiency actions taken to offset weak trading in its Americas Identity business. The group also expects to report non-cash goodwill impairment charges for that division. In August it warned of higher-than-expected volume attrition at several key Americas Identity customers and cut full-year group revenue growth guidance to 1% to 3% from mid-single digits.

On Tuesday the group reiterated the revised guidance and said it remained on track to meet its profit forecasts. The shares, which had fallen 30% after the August revision, were down 4% at 152p by 0945 BST. Chief executive Dev Dhiman said: “Our resilient performance, led by strong growth in location, EMEA Identity and the momentum behind GBG Go, demonstrates that the business fundamentals are strong.”

why it matters

For investors the picture is mixed: investment and one-off costs are weighing on profit while revenue growth is slow. The main risk sits in the American Identity business, where customer attrition has continued. Reaffirmed profit guidance and resilient growth elsewhere ease some concern, but the goodwill impairment remains a factor in assessing the stock.

market impact

GB Group: weak Americas Identity unit and impairment weigh on the company's shares

tags

instruments