CPP Group (AIM: CPP), a provider of assistance and insurance products, which reduce disruptions to everyday life for millions of customers across the world, is pleased to announce its half year results for the six months ended 30 June 2023.
First Half Performance
The Group’s key Indian and Turkish markets are performing well despite recent currency headwinds. Blink Parametric (Blink), the Group’s InsurTech business, continues to progress, and has this year secured a number of new clients in the important UK, European and North America markets. Additionally, Blink has achieved a 100% renewal rate of its existing client base which provides further validation of the value Blink helps to create for its partners. Despite good revenue growth, EBITDA from continuing operations was in line with prior year at £2.9 million reflecting the planned investment in Blink, a mix change in CPP India product sales, and the impact of adverse currency movements.
Operationally, the Group is now at the implementation stage of its Change Management Programme (CMP) which, at its conclusion, will see CPP exit from its Legacy businesses and focus on growing its core Blink, Indian, and Turkish operations. The key milestones for this year are the implementation of the new IT platform for India, the building of capacity for the Blink platform, and commencing active closure plans for the Legacy businesses. To date the execution of the CMP is proceeding as planned.
- Group revenue from continuing operations increased by 21% to £93.5 million (H1 2022 restated: £77.3 million).
- Core revenues increased by 25% to £87.0 million (H1 2022: £69.5 million).
- EBITDA from continuing operations level with prior year at £2.9 million (H1 2022 restated: £2.9 million).
- Central overheads reduce to £2.1 million (H1 2022 restated: £2.3 million).
- Exceptional items total £5.8 million (H1 2022: £0.5 million) primarily relating to planned Legacy business closures.
- Loss before tax from continuing operations of £3.7 million (H1 2022 restated: £1.1 million profit). On an underlying basis, profit before tax increased to £2.0 million (H1 2022: £1.6 million).
- Cash balance of £16.0 million at 30 June 2023 (H1 2022: £19.3 million; 31 December 2022: £21.0 million).
- Group focused on three Core businesses (Blink Parametric; CPP India, which includes Globiva; and CPP Turkey).
- Simplified the proposition away from “insurance” to “assistance” services.
- Change Management Programme proceeding as planned. Subsequent to the period end, Phase 1 of the new Indian IT platform has been delivered.
- Core business performing well.
- New business wins for Blink Parametric
- Strong growth in CPP India and CPP Turkey
- Plans for exiting Legacy businesses are progressing at pace, with the year-on-year decline in revenues as expected.
Simon Pyper, CEO of CPP Group, commented:
“The strategy we are following, the course we are taking and the goals we have set ourselves are challenging. To transform a business from one business model to another, from one in terminal decline to one with long term prospects for growth requires courage, confidence, and a lot of hard work, which are the same qualities I see in my colleagues from across the Group on a daily basis.
We are confident about the outlook and growth prospects for our Core operations for the second half of the year though we do expect the foreign exchange headwinds to continue for the foreseeable future. The CMP is expected to consume cash as we exit from our Legacy business and incur closure costs such as redundancies. That aside, our focus remains unchanged, on reshaping and building a business which will improve outcomes for all stakeholders over the longer term.
Whilst progress is never as fast as I would like, I remain confident that we are travelling in the right direction and at an appropriate speed.”