31st Mar 2015 12:53
LONDON (Alliance News) - CPP Group PLC Tuesday said its pretax loss narrowed significantly in 2014 as the company set aside less money to pay compensation to customers who were mis-sold insurance products and cut costs.
In a statement, CPP said it made a GBP7.7 million pretax loss in 2014, compared with a GBP43.2 million pretax loss in the prior year, as revenue fell by 39% to GBP108.8 million. Administrative expenses fell by 49% to GBP53.8 million as a result of lower customer redress provisions, a fall in redundancy-related restructuring costs and the non-repeat of 13.9 million of impairments related to IT assets, goodwill and intangibles, as well as its broader measures taken to cut its cost base.
The group is trying to recover from a scandal that saw it fined GBP10.5 million in 2012 by the Financial Services Authority, the predecessor to the Financial Services Authority, as its insurance products were mis-sold by high street banks. CPP increased its provision to compensate customers who were mis-sold the card and identity protection products by GBP3.0 million in 2014, compared with the GBP18.2 million charge taken in 2013, taking the total provision between 2011 to 2014 to GBP72.8 million, of which GBP14.9 million is still available.
CPP moved to AIM, the London Stock Exchange's junior market, from the Main Market in February as it raised GBP20 million by issuing new shares, which helped to reduce debt to GBP5.0 million from GBP13.0 million amid a broader restructuring of its liabilities.
"The group is stronger than a year ago and with a medium term business plan supported by new investment, a much reduced cost base and the confidence of stakeholders, we can now drive the business forward," Executive Chairman Eric Anstee said in a statement.
"Our core priority is focused on our strategy for growth, which will enable us to maximise the value from the existing business and realise the new commercial opportunities that exist. Much work will continue to take place as we embed our plans and complete the actions required to transform the group, which in time will create a sustainable business proposition for the long term," Anstee said.
CPP shares were up 11% at 3.87 pence on Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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