Half-year trading update – October 2023

GB GROUP PLC

(“GBG”, the “Group” or the “Company”)

London, October 19, 2023: Today, GBG, (AIM: GBG) the experts in digital location, identity verification and fraud software, provides an update on its performance for the six months to 30 September 2023.

Summary

The Board is pleased with the first half performance, with excellent progress to drive simplification that will increase the effectiveness of our business. This ongoing group-wide focus has resulted in cost efficiencies which underpin the Board’s confidence that GBG will deliver its FY24 profit expectations.

First-half revenue was approximately £132.4 million (1H23: £133.8 million), which represents constant currency growth of 1.8%. Excluding the impact of the year-on-year decline in cryptocurrency customer revenues, first-half growth was 3.3%.

Location delivered high single-digit constant currency revenue growth through new customer and partner wins alongside upsell activity, despite continued weakness in e-commerce volumes, while Fraud achieved low double-digit revenue growth driven by important contract renewals and new business wins.

In line with our expectations, Identity revenues declined by approximately 3% on a constant currency basis. Excluding the year-on-year decline in cryptocurrency customer revenue, Identity was broadly flat, with strong growth in APAC offsetting a tough prior-year comparator in the Americas. It is also encouraging that, as expected, monthly transaction volumes in Identity have stabilised and we still expect some year-on-year revenue growth in the latter part of the year.

Profitability

Gross margin was approximately 69.2% (1H23: 71.1%) reflecting the revenue mix in the period. As previously indicated, GBG has continued to focus on group-wide efficiencies while maintaining disciplined investment to capitalise on the long-term opportunity in our markets. We have made excellent progress; 1H24 operating expenses were approximately £6 million lower than the prior year despite inflationary pressure.

Overall, we expect first-half adjusted operating profit of approximately £23.7 million.

The ongoing focus on simplicity and efficiency underpins the Board’s confidence that GBG will deliver its FY24 profit expectations.

Balance sheet

GBG's financial position remains strong; our year-to-date cash conversion has improved to approximately 100% (1H23: 57.5%) due to a reduction in one-off items. Net debt as at 30 September 2023 was approximately £104.8 million (31 March 2023: £105.9 million) after the £10.1 million payment of the FY23 final dividend.   

GBG intends to release its half-year results on Tuesday, 28 November 2023.