CPP Group revenues rise in pandemic-dampened market

The AIM-traded firm said EBITDA from continuing operations was ahead 37% for the six months ended 30 June, to £2.6m, although it swung to a reported loss before tax from continuing operations of £0.7m, from a restated £0.5m profit a year earlier.

Underlying profit before tax from continuing operations came in at £0.8m, up from £0.6m year-on-year.

CPP said its loss after tax from continuing operations widened to £1.8m from £1.2m year-on-year, which improved to an overall profit for the period of £1.3m when including discontinued operations.

Cash balances stood at £19.6m at period end on 30 June, compared to £18.2m a year earlier, as the board declared an interim dividend of 5p per share, following the recommencement of the full-year dividend as announced in the 2020 results.

On the strategic front, CPP said customer numbers increased to 12.3 million from 10.8 million year-on-year, as the partner base continued to grow, including the addition of financial wellbeing company ClearScore in the UK.

Further product innovation was made to meet the changing needs of consumers, the board said, with the release of a home emergency product range in the UK and the European Union, and plans to launch a similar line in Turkey.

Integration of Blink into its platform took place in the period, which the directors said would strengthen the group's ability to meet the growing demand for parametric insurance solutions.

It established an IT team in its Indian business to build a new customer platform, and disposed of the German card protection legacy business for £2.4m.

The restructuring of Mexico and closure of the Malaysia business units in the period was in line with the group's commitment to maximise value from its assets, and focus on the areas with the strongest prospects.

“The first half of 2021 was a similar story to that of 2020, with a strong first quarter tempered by the negative effects of Covid-19 in the second, particularly in our main market of India,” said chief executive officer Jason Walsh.

“Nonetheless, we have adapted well across our markets and delivered a solid overall performance on the corresponding period last year while making progress in restructuring elements of the group to further strengthen its position for long-term, sustainable and profitable growth.

“As Covid-19 measures have eased in India, we have seen a progressive recovery in trading in the region with strong progress since the end of June.”

However, Walsh said the company remained cognisant of the need to monitor the situation closely, as it moved through the second half.

“Elsewhere in our key markets, we continue to make progress - our performance in Turkey at a local level was particularly pleasing, driven in large part by our expanded network of partners in the territory.

“However, the continuing devaluation of the lira has largely negated this performance at a group level.

“In the UK and EU we continued to build on strong foundations to develop an innovative, differentiated and integrated business with compelling prospects.”

CPP remained focussed on growing its offering through innovation, and strengthening its routes-to-market, while continuing to drive efficiencies across the group, Jason Walsh said.

“Whilst uncertainty remains from Covid-19, the board believes the company is trading broadly in line with market expectations for the full year, with the outlook being positive for the remainder of the year.”

At 1146 BST, shares in CPP Group were down 4.66% at 430p.