24th Mar 2016 08:54
LONDON (Alliance News) - Assistance products company CPPGroup PLC on Thursday said it swung to a pretax profit in 2015 due to a one-off gain, as it continues to work to recover from past scandals.
CPP made a GBP21.9 million pretax profit in the year to the end of December, compared to a GBP4.9 million loss a year earlier. CPP booked a GBP17.8 million one-off gain in 2015, mostly driven by the compromise reached on its commission deferral agreement.
CPP agreed in July 2013 with some of its business partners to defer payment of commission that would otherwise have become due over the 12 months to the end of June the following year for up to four years.
CPP is aiming to recover after it was rocked by its part in a scandal that saw its card protection and identity protection products mis-sold to clients through a number of the UK's high street banks. CPP was fined GBP10.5 million over the scandal in November 2012. A redress scheme worth up to GBP1.3 billion, with the costs shared among banks and other sellers of the products, was set up early in 2014.
CPP's underlying operating profit from continuing operations grew to GBP6.9 million from GBP2.8 million in 2015, adjusting for the one-off gains.
Revenue declined to GBP89.9 million from GBP108.8 million, hit by continued declines in CPP's UK renewal book and as regulated sales remain restricted. Annual renewal rates improved to 72.9% from 71.4%, but its live policy base was lower at 3.8 million, down from 4.7 million.
CPP said its key focus for 2016 will be the reinstatement of regulatory permissions in the UK, and it said risks to its strategy remain in play, despite CPP's confidence it will make progress.
"These results reflect a new beginning for CPP," said Chief Executive Stephen Callaghan.
CPP also disclosed on Monday it has received a requisition calling for the removal of four directors, including Chairman Roger Canham and CEO Callaghan.
CPP on Thursday said the requisition, "if successful, will likely have a detrimental impact on the future strategy and performance of the business."
CPP shares were down 11% to 11.00 pence Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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