Chester-based ID verification company GB Group (GBG) said on Wednesday it expects its revenue for the year to March 31, 2020, to grow 38.7% to £199 million, ahead of market consensus.
GBG also said in a trading update it expects to report adjusted operating profit of approximately £47 million, a 46.7% increase on last year and also ahead of market consensus.
On the impact of the Covid-19 pandemic, GBG said: “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 …
“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 £75 million in addition to an unused but available accordion option of £30 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.”
Chris Clark, CEO of GBG, said: “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 …
“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.”