GBG, Chester identity firm, expects £242m revenue

Shares of Chester-based digital identity verification company GB Group (GBG) rose about 13% on Thursday after it published a trading update for the year to March 31, 2022, saying it has delivered group revenue and adjusted operating profit ahead of market expectations.

GBG has had another year of strong trading performance across each of its reporting segments and we are pleased to report that the company has delivered group revenue and adjusted operating profit ahead of market expectations,” said the company.

GBG expects to report revenue for the year ended 31 March 2022 of approximately £242 million, including approximately £13 million of initial revenue from the recent acquisitions of Acuant and Cloudcheck.

“Organic constant currency growth is expected to be approximately 10.5% for the year.

“This level of growth is pleasing given the substantial one-off benefit in the prior year related to the US government’s stimulus programme; adjusting for this, underlying growth was c.15%.

In Identity, second-half underlying growth was good across all regions driven by an increasing number of digital transformation projects requiring identity verification capabilities and further demand in the fintech sector.

“Location’s underlying growth was supported by the ongoing consumer shift to greater online activity and structural tailwinds as brands adopt direct-to-consumer strategies.

“As anticipated, Fraud experienced strong year-on-year growth with on-premise deployment activity resuming, enabling new contract wins and strong customer retention.

As a result of this strong revenue performance, GBG expects to deliver an adjusted operating profit margin at the upper end of expectations, of c. 24%, resulting in adjusted operating profits of not less than £58 million, ahead of market expectations.

Taking into account the Acuant and Cloudcheck acquisitions, completed at the end of November 2021 and January 2022 respectively, proforma enlarged group revenue was approximately £275 million for the year ended 31 March 2022.

Cash generation has continued to be strong, enabling the group to repay $40 million of the $210 million of debt financing drawn in November 2021 to finance the acquisition of Acuant.

“GBG’s net debt at 31 March 2022 was £107 million.

We continue to monitor events in Eastern Europe closely, supporting a small number of team members with connections to Ukraine during this difficult time.

“GBG has no operations or active suppliers in Russia, Belarus or Ukraine and we can confirm that business has been suspended with the small number of customers who are incorporated in Russia.

“Exposure to Russian customers is limited with combined revenue in FY22 of less than 0.5% of Group revenue.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.