Chester identity firm GBG to hit £109m for H1

Chester-based identity data company GB Group (GBG) has published a trading update for the six months to September 30, 2021, saying it expects revenue for the period to rise 5.3% to £109 million and H1 profit to rise 3% to £27.5 million.

“The long-term structural growth opportunities for each of GBG’s three business units of Location, Identity and Fraud continue to be supported by consumer activity shifting online and an increased need for fraud prevention solutions,” said GBG.

“Each business unit grew in both reported and organic constant currency terms in the first half year.

We are pleased to report that total revenue for the first six months is expected to be approximately £109 million, which represents an increase of 5.3% over the prior year period. 

“This is before adjusting for exits from our marketing services and employment screening businesses, which gives an increase of 12.4% on an organic constant currency basis.

“In Identity we had expected the revenue comparison for H1 to be challenging, given the substantial benefit derived from a one-off project related to the USA government’s financial stimulus activity last year.

“However, this customer project continued into the current financial year at higher than expected volumes, generating additional revenue of approximately £3 million.

“We also benefitted from the increased transaction volumes across crypto-currencies, experienced in our Q4 last year, continuing into April and May of this financial period.

“This generated a further circa £4 million of additional consumption revenue in H1. 

“In both cases, consumption volumes have now settled at normalised run rates and we anticipate these will remain at these levels through the second half of the year.

“GBG’s Location business continued to experience good demand across a range of sectors driven by the continuing consumer shift to greater online activity. 

As anticipated, our Fraud business unit experienced strong year-on-year growth as a result of restarting more on premise deployment activity, new contracts and strong renewals.

As a result, adjusted operating profit for H1 is expected to be approximately £27.5 million, an increase of 3% on last year and an adjusted operating profit margin of approximately 25.2%.

“This is marginally higher than we had expected due to the one-off revenue impacts noted above.

“Because of the market opportunity available to us we continue to increase investment in GBG’s people, technology and channel-to-market capacity.

The company’s balance sheet and cash conversion remains strong with net cash and treasury deposits of £39.5 million at 30 September 2021. 

“We also have an unutilised revolving credit facility of £110 million.

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