Shares of Chester-based identity data company GB Group (GBG) fell about 20% after it published an update on its trading performance for the six months to September 30, 2022.

GB Group, which specializes in digital location, identity verification and fraud software, reported growth in revenue and adjusted operating profit “despite tough H1 comparators driven by cryptocurrency volumes last year.”

The Chester firm said its Identity segment was particularly impacted by the reduction in activity from cryptocurrency and “gig-economy” fintech customers in the Americas.

GB Group said its cryptocurrency revenues normalised from the prior year’s exceptional levels “but at lower volumes than we had expected, and we anticipate this impact will continue in the second half.”

GB Group shares fell about 20% to about £3.46 to give the Chester firm a current stock market value of roughly £875 million. GB Group shares are down about 60% for the past 12 months.

The company said it expects to report first half revenue of £133.8 million, representing growth of 22.5%.

Growth in the half year included contributions from the recently acquired Acuant and Cloudcheck businesses.

“This more than offsets a tough prior period comparative that included a c.£8.8 million benefit from unusually high and non-repeating transaction volumes driven by the US stimulus project and cryptocurrency trading,” said GB Group.

“On a pro forma basis, which for H1 FY22 includes the pre-acquisition revenue but excludes the non-repeating revenue noted above, growth in the current period was approximately 10%.

“H1 FY23 has experienced volatile foreign currency movements, particularly pound sterling versus the US dollar.

“This caused a favourable effect on the translation of GBG’s significant US dollar denominated revenue, contributing approximately 6.5% to the reported period-on-period pro forma revenue growth.

“Our Location and Fraud segments both performed well with double-digit constant currency growth.

“In Location, successful cross-sell/up-sell initiatives and increased pricing compensated for lower volumes seen from some eCommerce customers.

“In Fraud we gained new customers and secured important renewals in APAC and EMEA. There is good momentum in these segments as we enter the second half.

“Our Identity segment was particularly impacted by the reduction in activity from cryptocurrency and ‘gig-economy’ fintech customers in the Americas.

“Cryptocurrency revenues normalised from the prior year’s exceptional levels, but at lower volumes than we had expected, and we anticipate this impact will continue in the second half.

“Our wider regions and sectors continued to perform well, and we are encouraged by the pipeline of opportunities to offset this impact over the next six months.”