CPPGroup Plc – Half-year Report

CPPGroup Plc – Half-year Report

CPPGroup Plc (CPP or the Group), the partner focused, global product and services company, today announces its results for the six months ended 30 June 2019.

 

The Group has seen continued expansion in its international revenues and customer numbers led by India. New business partners continue to be added to our portfolio and further investment has been made in our InsurTech capabilities to deliver strategic advantage.

 

Highlights

·      Group revenue increased by 17% to £60.2 million (H1 2018: £51.3 million) continuing the strong growth trajectory from previous periods.

·      Revenue from Ongoing Operations increased by 28% to £51.4 million (H1 2018: £40.0 million), which includes a 45% increase in Indian revenue to £40.9 million (H1 2018: £28.3 million).

·      Adjusted EBITDA increased by 25% to £3.6 million (H1 2018: £2.9 million).

·      EBITDA increased by 30% to £2.3 million (H1 2018: £1.8 million).

·      Overall, currency movements across our international markets adversely impacted reported results. At constant currency:

·      Group revenue increased 19%.

·      Revenue from Ongoing Operations increased 30%.

·      Adjusted EBITDA increased by 34%.

·      EBITDA increased by 44%.

·      Profit before tax reduced by 36% to £0.9 million (H1 2018: £1.3 million).

·      Customer numbers have increased to 9.0 million (H1 2018: 6.7 million; 31 December 2018: 8.2 million).

 

Strategic progress

·      Diversification of our Indian business gathers pace through the launch of a new product line, LivCare, and new business partner contracts with Tata Capital Financial Services (Tata) and American Express.

·      Strong existing and exciting new partners, such as Chinese banking giant Bank of Communications (BoCom), gives potential access to over 200 million customers.

·      Pioneering parametric insurance platform1 developed by Blink to transform the events-based insurance market.

·      Globiva performing ahead of expectations, forming partnerships with global brands and colleague numbers increasing to over 1,400.

 

1.     Parametric insurance is a type of insurance that does not indemnify the pure loss, but instead agrees to make a payment upon the occurrence of a triggering event. Blink focuses on flight disruption solutions and has developed an innovative technology platform to deliver customers a proactive, real-time service.

Note - All subsequent percentage change figures within this report are presented on a constant currency basis, unless otherwise stated. The constant currency basis, which is an Alternative Performance Measure (APM), retranslates the previous period measures at the average actual periodic exchange rates used in the current financial period. This approach is applied as a means of eliminating the effects of exchange rate movements on the period-on-period reported results.

Financial highlights

£ millions

Six months ended 30 June 2019

(Unaudited)

Six months ended 30 June 20181

(Unaudited)

Change

Constant currency change

Group

Revenue

60.2

51.3

17%

19%

Adjusted EBITDA3

3.6

2.9

25%

34%

Investments in business growth projects4

(1.3)

(1.1)

(18)%

(18)%

EBITDA2

2.3

1.8

30%

44%

Profit before tax

0.9

1.3

(36)%

(31)%

Basic (loss)/earnings per share (pence)

(0.01)

0.05

(126)%

n/a

Net funds5

15.8

29.5

(46)%

n/a

Segmental revenue

Ongoing Operations

51.4

40.0

28%

30%

Restricted Operations

8.8

11.3

(21)%

(21)%

1.     IFRS 16 Leases was effective from 1 January 2019, in accordance with transition provisions allowed within the new standard the rules have been applied retrospectively and as a result 2018 comparative figures have not been restated.

2.     EBITDA represents earnings before interest, taxation, depreciation, amortisation, exceptional items and Matching Share Plan (MSP) charges.

3.     Adjusted EBITDA excludes costs associated with investments in business growth projects.

4.     Investments in business growth projects of £1.3 million (H1 2018: £1.1 million) comprises start-up costs relating to the UK £0.4 million (H1 2018: £0.2 million), Blink £0.5 million (H1 2018: £0.8 million), Bangladesh £0.1 million (H1 2018: £nil), Southeast Asia £0.1 million (H1 2018: n/a) and our share of losses in KYND £0.2 million (H1 2018: £0.1 million).

5.     Net funds comprise cash and cash equivalents of £22.4 million (H1 2018: £29.4 million), a borrowing asset of £nil (H1 2018: £0.1 million) and net investment lease assets of £0.2 million (H1 2018: £nil) less lease liabilities of £6.8 million (H1 2018: £nil). Lease liabilities and net investment lease assets have been recognised following the adoption of IFRS 16 Leases on 1 January 2019, further detail is provided in note 10 to the condensed consolidated interim financial statements.

 

Jason Walsh, Chief Executive Officer, commented:

"We are starting to see the rewards from the assembly of our capabilities, each of which plays its part in supporting the Group's operations. Blink is our InsurTech business where already over 250,000 customers have had access to its parametric insurance platform and Globiva, the start-up business process management company, is growing rapidly and now has over 1,400 billable seats and boasts global brands like Ola, American Express and Tui amongst its third party clients.

We continue to grow our international revenues, with the strong performance that we saw in 2018 being continued through the first half of 2019. Our Indian operations have once again been the star performer significantly growing its revenue, profitability and customer numbers.

Ultimately, our success is built on our business partner relationships which we continue to deepen and importantly we are forming new partnerships with major brands in our strategically important markets. These new and existing relationships will develop over time and fuel the continued growth in our business. We are investing in our technology-led capability which will continue to strengthen our partnerships and enable more nimble and cost-effective proposition delivery as well as an exceptional customer experience."

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