Trading Statement
GB Group PLC
12 April 2007
Embargoed until 07.00 12 April 2007
GB GROUP PLC
('GB' or the 'Group' or 'GB Group')
TRADING UPDATE
The Group today announces a trading up-date for the year ending 31 March 2007.
GB Group has substantially improved its future prospects over the course of this
year. The Directors are pleased to report that revenues for the year are
expected to show good growth, up 17 per cent. at £15.0 million compared to the
previous year. In addition, the Group has enhanced its DataAuthentication
offering to its clients.
Due to delayed recognition of revenues within the DataAuthentication business
and other factors, the Group expects to report a loss before tax of £1.2 million,
approximately £0.8 million greater than the current estimates, for the year
ending 31 March 2007.
Cash balances at 31 March 2007 are, however, ahead of market estimates at £5.2
million, principally as a result of non-refundable cash receipts in respect of
deferred DataAuthentication revenue.
Trading in GB's DataAuthentication business is strong and revenues for the year
are expected to have more than doubled to £4.8 million (2006: £1.9 million). The
experience during the second half of the year was that lead times for closing
contracts, together with the time taken for clients to integrate GB's services,
increased as new businesses of increased size, particularly in the Financial
Services sector, became customers. As a result, contracts were closed later than
expected and a greater amount of non-refundable, prepaid revenue has been
carried forward for recognition in future periods in accordance with
International Accounting Standards. Contracted prepaid revenue deferred to
future periods at 31 March 2007 was £1.2 million and revenue recognised in the
year is below market expectations by a similar amount.
In GB's traditional businesses of DataIntegrity and DataSolutions, markets
became increasingly mature with greater than expected competitive pressure on
turnover and profitability. To counter this trend, and following further
investment during the year, GB has recently made a high proportion of these
services available online. This innovation successfully differentiates GB from
its competition and has been well received in the market.
DataAuthentication
DataAuthentication has enjoyed strong growth and has excellent prospects. From
its inception in 2004, revenue has grown to a current monthly rate of
approximately £0.5 million and contracted clients now number 154 including many
of the leading businesses in Financial Services, Mobile Telecommunications and
Gaming.
It is now also acquiring significant clients in the Retail sector. In March
2007, GB entered into a five year agreement with Europe's leading electrical
retailer, DSG international plc ('DSGi'), to provide and host a customer
verification and registration processing system to all of DSGi's stores in the
UK.
The DataAuthentication business has the opportunity to become the dominant
provider of online verification solutions of individuals in the UK. To exploit
this opportunity, further appropriate financial investment is being made,
particularly in the areas of sales and marketing.
During the financial year to 31 March 2007, GB expanded its verification
business into international markets as planned. Replicating the successful UK
model, GB now offers electronic services to authenticate individuals in 21
countries. During the second half of the financial year, significant
international contracts were signed and it is anticipated that this
international business will demonstrate substantial future growth.
DataIntegrity and DataSolutions
The Directors believe these markets, essentially the capture, processing and
analysis of address data, will move from the present periodic supply of data to
clients on disk to the real time on-line availability of data to clients through
a web-based delivery solution. GB has, therefore, developed such an online
solution and, since its introduction in January, this solution has successfully
displaced competing 'off line' products provided by GB's competitors. The
improvement in the offering gives GB the opportunity to increase its revenue and
market share and, to this end, GB will continue to invest in new product
development and in sales and marketing in the year to 31 March 2008.
Infrastructure and Technology
As planned, GB invested £1 million in infrastructure and technology in December
2006 when it moved to larger offices and simultaneously renewed its computer
systems giving the business significant capacity for growth.
Cash and Dividend
Cash balances at 31 March 2007 of £5.2 million were ahead of expectations. GB
has sufficient resources to invest in both technology and personnel for the
benefit of the Company and its shareholders. In line with this strong liquidity
and GB's future prospects, the Directors intend to recommend a maintained final
ordinary dividend of 0.75 pence per share in respect of the year to 31 March
2007 at the AGM on 19th July 2007.
Summary
This continues to be a business with real and substantial prospects and the
Directors are excited by the present opportunities.
- Ends -
For further information, please contact:
GB Group plc
Richard Law, Chief Executive 01244 657 333
Mona Navin-Mealey, Finance Director
KBC Peel Hunt Ltd 0207 418 8900
David Davies
Nicholas Marren
Weber Shandwick Financial 0207 067 0700
Richard Hews
Helen Thomas
Website www.gb.co.uk
Notes to Editors
About URU(TM)
URU is an online identity verification service which was developed jointly with
BT and is DataAuthentication's principle offering. URU, which is powered by GB's
ID3TM search engine and decision making technology, provides access to GB's
comprehensive range of identity data and BT's high capacity web delivery. It
helps organisations to protect themselves from the growing problem of identity
theft and fraud, which is estimated to cost the UK economy over £1.7 billion per
annum. URU enables companies subscribing to the service to make an instant
decision whether to accept the identity claimed by any given individual and
confirm their age in seconds.
URU works by cross checking personal information provided by an individual at
the point of acquisition against a comprehensive range of datasources to confirm
that an individual is who they claim to be, live where they claim to live and
meet certain minimum legal age requirements.
No personal data is disclosed by the reference databases and as a result URU is
compliant with the Data Protection Act.
URU also provides a valuable audit trail demonstrating that the necessary checks
have taken place, thereby helping companies comply with legislation, including
the 2nd European Money Laundering Directive, Proceeds of Crime Act and Minimum
Legal Age requirements of certain industry sectors.
The addition of data from CallCredit also enables users of URU to incorporate
credit reference data.
As a result of legislation, new opportunities and social responsibility
requirements, the market for online ID verification is significant and growing.
Although an estimated 0.5 billion manual ID checks are conducted annually in the
UK, less than 6%* of these are currently performed electronically.
(* figures as at November 2006)
URU has demonstrated that online checks are more effective, less expensive and
more robust.
The market is moving towards online checks as fraudulent documents become ever
more sophisticated, more readily available and more difficult to check manually.
It is estimated that by 2010, the market for online ID checks could be 300
million checks per annum.
GB works closely with trade and industry associations, such as the Finance and
Leasing Association, the Remote Gambling Association and the Financial
Technology Research Centre, to advise businesses that more robust processes can
prevent financial crime. We have worked closely with the Gaming Industry to
address social issues such as underage gambling and addiction and our Social
Responsibility Consultancy helps Gaming operators formulate best practice to
comply with regulatory requirements and improve profitability.
About ID3-Check
ID3-Check is an international online identity verification service developed by
GB's DataAuthentication business. It is a hybrid international version of the
technology underpinning URU, GB's joint project with BT which is now the UK's
leading online age and identity verification service.
The service helps organisations to protect themselves from the growing global
problem of identity theft and fraud. ID3-Check enables organisations subscribing
to the service to make an instant decision whether to accept the identity
claimed by an individual and confirm their age in seconds. ID3-Check can confirm
the age and identity of nearly half a billion people in 21 countries including
Australia, Canada, the USA and most Western European countries.
ID3-Check works by cross checking personal information provided by an individual
at the point of acquisition against a comprehensive range of data sources to
confirm that an individual is who they claim to be, live where they claim to
live and meet certain minimum legal age requirements.
No personal data is disclosed by the reference databases and as a result
ID3-Check is compliant with Data Protection laws.
ID3-Check also provides a valuable audit trail demonstrating that the necessary
checks have taken place, thereby helping companies comply with legislation,
including the 2nd European Money Laundering Directive, Proceeds of Crime Act and
Minimum Legal Age requirements of certain industry sectors.
As a result of legislation, new opportunities and social responsibility
requirements, the market for online ID verification across borders is
significant and growing.
About GB Group plc
GB Group plc provides a range of products and services to enable organisations
to capitalise on one of their greatest assets - customer data. The Company has
expertise across a range of sectors and is able to transform customer data into
valuable information, enabling clients to make better, more informed decisions.
The development of innovative software and services, through to the provision of
the UK's most comprehensive consumer business databases - The National Register
(R) and the National Authentication Register - positions GB Group as a widely
acknowledged industry leader in its specialist markets.
We are constantly improving business processes by building on our core values of
Innovation, Quality and Excellence. This is reflected in our customer
satisfaction surveys and also through research, carried out by Manchester
Business School, which confirms our products are out-performing the competition.
GB Group plc has three complementary offerings:
• DataAuthentication helps businesses validate personal identity
information and provides anti-fraud solutions to fight crime.
• DataIntegrity helps companies capture and maintain accurate customer
contact data, an essential foundation for any profitable customer relationship.
• DataSolutions empowers companies to consolidate and analyse customer
data from various sources, enabling them to make better, more informed
decisions.
Established since 1989, GB's core competencies combined with industry sector
knowledge have enabled the company to deliver significant value to organisations
helping them derive maximum value from their customer data and sustain real
advantage over their competition.
GB Group is supported by its key relationships with major organisations with
whom it works with on major initiatives (an example being British Telecom),
together with a team of highly talented and motivated staff successfully
delivering business solutions.
GB Group plc is listed on the London Stock Exchange (www.gb.co.uk).
This information is provided by RNS
The company news service from the London Stock Exchange