Shares of Chester-based GB Group (GBG), which sells global identity fraud and location software, rose as much as 13% after it reported “strong progress achieved by the business in the last six months and positive momentum moving into the second half of the year.”
First half revenue for the six months to September 30, 2024, was £137 million, up 4.5% on a constant currency basis, with its two largest business segments, Identity and Location, together up 6.8% on a constant currency basis.
“Identity built on the momentum generated in the final quarter of FY24, led by the year-on-year improvement in EMEA and Americas as a result of improving net revenue retention,” said GBG.
“We maintained solid growth in Location through new logos, partner activity and strong retention, despite the subdued consumer backdrop.
“The growth of these segments more than offset the anticipated high-single-digit decline in Fraud which, as previously noted, relates to year-on-year timing differences in our customer renewal cycles.
“As a result of our revenue growth in the last six months and the continued benefit of our group-wide cost and simplification initiatives executed in the prior year, the first half adjusted operating profit grew by approximately 21% to £29 million, representing a margin of 21.2%.
“Our balance sheet remains strong with good progress in lowering net debt, which as at 30 September had reduced to around £72 million (31 March 2024: £80.9 million). This includes the FY24 final dividend payment of £10.6 million and a £5.0 million retranslation benefit given the relative strength of pound sterling since our FY24 results.
“With the strong progress achieved by the business in the last six months and positive momentum moving into the second half of the year, the board reiterates its FY25 outlook.
“We expect to deliver mid-single-digit revenue growth on a constant currency basis, leading to high single-digit growth in adjusted operating profit.”
GBG CEO Dev Dhiman said: “On becoming CEO, I outlined four initial focus areas – removing complexity; being globally aligned; driving a performance culture; and accelerating the pace of innovation to ensure the business capitalises on its potential as well as the significant market opportunity.
“We have made encouraging progress in each of these areas, and this is translating into our performance – with strong pipeline execution, ramp-up with a number of important customers, and some significant customer win-backs reinforcing our market leadership position in identity fraud and location software.
“The positive operating momentum we carry into the second half underpins both the board’s ongoing confidence in delivering the FY25 outlook, and our ability to fulfil the longer-term potential of the business. I look forward to sharing more on this progress at our November results.”