29th Aug 2014 10:16
LONDON (Alliance News) - CPPGroup PLC Friday said Non-Executive Chairman Duncan McIntyre intends to step down from his position in the near future, prompting a search to find a successor just months after he was appointed at the end January.
CPP made the disclosure as it reported that its first half pretax loss narrowed to GBP1.1 million in the six months ended June 30 from GBP11.4 million in the corresponding period last year.
The group is trying to recover after it was rocked by its part in a scandal that saw its products mis-sold to clients through a number of the UK's high street banks. CPP is currently assessing claims under a GBP1.3 billion scheme set up to repay customers who were mis-sold insurance products such as card protection and identity protection.
CPP on Friday confirmed that the provision it set aside for customer redress and associated costs remains at GBP69.8 million. It said that GBP14.0 million of that provision remained intact at the end of June.
CPP said it has progressed "essential plans" to restructure its balance sheet, adding that it is evaluating options to strengthen its capital position in order to provide the foundations for the longer term. It is also in the final stages of a process to choose a new IT system based on modernisation and cost-effectiveness.
"As a result of the prudent steps that we are taking and on-going focus on costs, we have continued to stabilise the business. Managing change and rebuilding a business is a substantial task and much work remains as we complete the required actions to reshape the organisation," Chief Executive Brent Escott said in a statement.
"As the [customer compensation] scheme draws to a close, we welcome the opportunity to move forward for the next phase of our development. Nonetheless, the impact of the scheme has been considerable and our priority remains to ensure that the group is in a stable position," Escott added.
CPP said the compensation scheme, which closes on August 30, has significantly reduced its financial resources and liquidity.
"Liquidity in the short term relies on either the release of restricted cash from one of the UK regulated entities or other working capital solutions. These will require third party agreement and the group is engaged in on-going dialogue with its stakeholders. As a result, the outlook continues to reflect the significant challenges and risks ahead and performance for the remainder of 2014 will remain constrained," CPP said in a statement.
CPP shares were Friday quoted down 17% at 15.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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