18th Aug 2016 08:12
LONDON (Alliance News) - Assistance products company CPPGroup PLC on Thursday said its focus remains on returning to revenue growth following a first half which saw it replace its management team as pretax profit slumped.
CPP has been working to recover following it having been part of 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.
During the first half of 2016, CPP's board was ousted after a shareholder vote in May. Jason Walsh was appointed its new chief executive, joining from accountant EY after having worked for CPP up until 2014. The company also appointed two new non-executive directors and another executive director as it revamped at the top.
In the first half, the group made a pretax profit of GBP2.5 million, a big fall on the GBP18.9 million it made a year prior when it booked an exceptional credit relating to the compromise of the commission deferral agreement it agreed with some of its business partners in July 2013.
Underlying operating profit for the firm grew in the first half, however, up to GBP3.6 million from GBP1.9 million.
Revenue in the half declined 9.0% year-on-year to GBP35.4 million, hit by a natural decline in the firm's UK renewal book and continued restrictions on new regulated sales.
The firm's annual renewal was for the half was 72.9%, flat against the prior year, with 3.9 million live policies on its books, up from 3.8 million at the end of December and the first increase in policy numbers since the end of 2011.
Chief Executive Walsh said the first half performance was "solid" and "demonstrated the resilience of the core business."
"Looking ahead it is vital that we return CPP to revenue growth, which will be supported by new product development. For this reason we were very encouraged by the rise in customer numbers to 3.9 million during the first half of the year, although we believe that we are still only scratching the surface of the potential market for our services," he added.
Shares in CPP were down 0.8% at 6.57 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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