GB Group warns over 'challenging conditions'

AIM-listed GB Group cautioned on Tuesday that challenging conditions had continued into the second half of the year, sending shares in the digital location, identity verification and fraud software company lower.

At its interim results in November, the group had highlighted challenging conditions for cryptocurrency and its internet economy customers.

"These challenging conditions have continued into the second half of the year and given the relative concentration of these customers in our North America business this is the region where we are seeing the most pronounced impact," it said on Tuesday.

"We have also seen some incremental lengthening of sales cycles, also in North America, as a result of the macro-economic uncertainty and this has delayed some expected customer contracts."

As a result, it now expects revenues for the year to the end of March 2023 of around £279m and adjusted operating profit of £60m. Numis said in a note that this compares to consensus expectations for revenue of £292m and adjusted operating profit of £67m.

Chief executive officer Chris Clark said: "The difficult macroeconomic environment has been well publicised and it is disappointing to have seen the impact on certain parts of our business.

"However, GBG continues to achieve growth and maintain strong operating margins and cash generation."

At 0910 GMT, the shares were down 5% at 327p.