Update: Discussions with Business Partners

RNS Number : 6498E

CPPGroup Plc

11 April 2011

 



CPPGroup Plc

Update: Discussions with Business Partners

On 28 March 2011, CPPGroup ("CPP" or "the Group") announced that it is in discussions with the FSA in relation to certain issues surrounding the sale of the Group's Card Protection and Identity Protection products in the UK.  Further to this announcement, one of the Group's business partners, Barclaycard, has decided to stop sales in the call to confirm channel operated by the Group whilst it completes a review of this channel.

In the call to confirm channel, which is similar to the card activation channel, CPP products (both Card Protection and Identity Protection) are offered to Barclaycard customers who call in to confirm receipt of their newly issued credit card.

The Group will continue to offer Card Protection to Barclaycard customers who currently hold the Identity Protection product and who call the Group's customer service department. Barclaycard will also continue to offer Identity Protection and Card Protection to its customers in all their existing channels.

Sales to Barclaycard customers in the call to confirm channel are currently less than 2% of Group revenue. The impact on underlying operating profit in 2011 and 2012 will be immaterial although reduced sales in 2011 and 2012 will have an adverse impact on the profitability beyond 2012 as the renewals revenues (upon which CPP pays a smaller commission to its Business Partners) will also be lower.

The Group has over 200 Business Partners and has been encouraged by the support received in connection to the ongoing discussions with the FSA. CPP remains actively engaged with its business partners and is working with them to respond appropriately to the current situation, and any product sales as have been suspended by business partners other than Barclaycard have to date been at levels which are not material to the Group.  Whilst the Group believes that new business volume uncertainty may remain whilst the FSA investigations progress, the Board continues to believe in the ongoing relevance and consumer appeal of its products and services.

The Group continues to work with the FSA in relation to its ongoing investigation. At this stage the Group cannot provide any further information on the likely outcome of those discussions, nor on the potential consequences on the operations and/or financial position of the Group. In common with all our business partners, CPP looks forward to a swift conclusion to the FSA's investigation so as to remove any ongoing uncertainty.  Further announcements will follow once the Group has further clarity on the FSA's findings and conclusions.

Enquiries

CPPGroup

Eric Woolley, Group Chief Executive

Shaun Parker, Chief Financial Officer

Tel. [phone] (today)

Tel: [phone] (thereafter)

Tulchan Communications

John Sunnucks

David Allchurch

Tel. [phone]

Notes to editors:

CPP is a leading international Life Assistance business with operations in 15 countries in both developed and developing markets. CPP's products and services are designed to meet consumer needs across a range of requirements, in particular relating to credit and debit card ownership, personal identity, mobile telephones, travel and the home. The Group primarily focuses on providing customer assistance during stressful life events such as losing or having a wallet, purse, mobile telephone or keys stolen, as well as support in the event of identity theft.

 

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MSCLIFEESIILLIL