GBG (AIM: GBG), the identity data intelligence specialist, provides an update on its trading performance for the year to 31 March 2021, in advance of the release of its final results in June 2021.
- Total revenue and organic constant currency revenue for the year grew by 9% to £217 million, ahead of updated market consensus.1In the full year announcement we will disclose organic revenue reflecting the impact of the two small businesses we disposed of in the last quarter of the financial year.
- GBG has had a strong year in challenging conditions and benefited from customers shifting to digital models. Growth was strongest in Identity, helped by US stimulus and good growth in fintech. The Location business also grew well, supported by increased transactions in the online retail sector. This growth has more than compensated for decline in those sectors affected by Covid and lower sales of Fraud products, which are traditionally deployed onsite where pandemic restrictions have impacted new sales and implementations.
- GBG expects to report adjusted operating profit2of approximately £58 million, a 21% increase on last year and also ahead of updated market consensus.1
The growth rate in adjusted operating profit is underpinned by a combination of factors including business mix; the one off impact of deferring expenditure made as a prudent step in the early stages of the pandemic; lower people costs flowing from these decisions; and cost savings as a direct result of the pandemic.
- Net cash balances as at 31 March 2021 were £21 million (2020: £35 million net debt). Strong cash generation enabled the full repayment of the Company’s bank loans by 31 March 2021 (2020: leverage of 0.8x).
1 Company compiled consensus of analysts’ estimates for year ending 31 March 2021: Revenue of £213.2 million and adjusted operating profit of £53.5 million.
2 Adjusted operating profit means profit before amortisation of acquired intangibles, share-based payments, exceptional items, interest and tax. This measure is not defined under IFRS but Management believe that this Alternative Performance Measure (APM) is a more appropriate metric to understand the underlying performance of the Group.
3 Organic revenue excludes revenue from acquisitions in the past 12 months.
4 “CCY” indicates figure reported on a constant currency basis. Constant currency means that non-Sterling revenue in the comparative period is translated at the same exchange rate applied to the current year non-Sterling revenue.
Chris Clark, CEO of GBG, commented: “I am very pleased with the performance of the business in FY21. We made significant financial and strategic progress in the most extraordinary circumstances and my thanks go to all GBG team members whose tireless work has enabled this.
Although Covid-related uncertainties remain front of mind, we are encouraged by the global easing of lockdowns and the pace of vaccinations in some of our key geographies. One legacy of the pandemic will be accelerated digitalisation. GBG will play a major role in this transition and over the next year we will continue to make important strategic investments in the business, its technology and in our people to fully leverage the opportunity this presents.
Source: GB Group Earnings Release