Half Yearly Report

GB GROUP PLC

("GBGroup", "GBG", the "Group" or the "Company")

Half Yearly Report

GBGroup, the identity intelligence specialist, announces its unaudited results for the six months ended 30 September 2014.

Highlights - Financial

· Strong trading performance for the six months to 30 September:

o Revenue growth of 28% to £23.2 million (2013: £18.1 million)

o Both divisions, Identity Proofing and Identity Solutions, contributing to revenue growth

o Adjusted operating profits increased by 47% to £3.8 million (2013: £2.6 million)

o 43% increase in profit after tax to £1.7 million (2013: £1.2 million)

o Adjusted basic earnings per share of 3.1p (2013: 2.3p)

· Group has cash balances of £13.6 million (2013: £6.0 million) - with net cash balances of £8.6 million (2013: £6.0 million).

· 13% increase in overall organic revenue growth.

Highlights - Operational

· Acquisition of DecTech in May and Transactis post-period end in October.

· Further strong growth in our international services.

· International verification capabilities extended and enhanced - GBG can now provide verification services on over 4 billion citizens globally.

· IDS product range upgrades successfully launched in October.

Richard Law, CEO, commented, "We have made strong progress against our strategy throughout the first half of the year and expect this positive momentum to continue through to the year end and beyond. With the added capabilities, markets and clients bought to the Group by the acquisitions of DecTech and Transactis, we are confident of our continued growth and for the prospects of the Group which we feel are very positive."

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About GBGroup

The most profitable and successful organisations recognise the value of understanding the individual identity of their customers and employees. GBG combines this concept of identity with technology to create an environment of trust, so that organisations can employ people and connect, communicate and transact with consumers, safely and responsibly.

We call this Identity Intelligence.

GBG's solutions include:

Register & Verify - International software and services for quick and accurate customer registration; and the verification of identities of individuals & businesses remotely.

Cleanse & Engage - Innovative software and services which provide accurate and up-to-date identity information to deliver improved intelligent customer contact strategies.

Employ & Comply - Thorough background checks through online verification and authentication of individuals enabling organisations to safeguard, recruit and engage with confidence.

Trace & Investigate - Leading software and services which provide the most accurate and up-to-date picture of the UK's population, properties and businesses to quickly locate, investigate and contact the right individual, first time.

GB Group is listed on the London Stock Exchange (GBG). For more information, please visit GB Group's website: www.gbgplc.com

CHAIRMAN'S STATEMENT

I am pleased to report that GBGroup has delivered another strong performance in the first half of the year. The acquisitions of DecTech in May and Transactis in October have expanded our product portfolio and given the Group access to new clients and new international markets. Together they are expected to add approximately 20% to GBG's revenues in the year. We have invested in new products building on our successful identity intelligence capabilities and positioned ourselves well to capitalise on opportunities arising from our increasing international reach.

Results

The Group's performance in the half year is in line with the guidance given in the trading update statement issued by the Company on 20 October 2014. Group revenues increased by 28% to £23.2 million (2013: £18.1 million) and adjusted operating profits increased by 47% to £3.8 million (2013: £2.6 million). From the date of its acquisition, DecTech has generated £2.6 million of revenue and contributed £0.8 million of adjusted operating profits to the Group. Overall organic growth in the first half has been strong with revenues higher by 13%.

The Group continues to be highly cash generative with operating cash flow before working capital movements increasing by 37% to £3.8 million (2013: £2.8 million). At 30 September 2014, the Group had cash balances of £13.6 million (2013: £6.0 million).

Net profit was 43% higher than the previous year at £1.7 million (2013: £1.2 million).

Identity Proofing (IDP)

The Identity Proofing business, which provides our global fraud, risk, compliance, people checking and ID verification solutions, continues to make good strategic progress helped by the acquisition of DecTech and the roll out of ID3global. Revenues grew by 59% to £11.3 million (2013: £7.1 million) with organic growth being 21%.

The addition of DecTech to the business means that IDP's client base spans more than 40 countries worldwide with a client presence in every developed continent.

ID3global was launched in September 2013 and unifies our UK and international electronic identity verification solutions through a single portal or API which can verify the details of over 4 billion citizens globally. This service is now used by the majority of GBG's ID verification clients and its predecessor URU services are due to be retired during the second half of this financial year.

Developments in the ID3global service during the year have included: sourcing enhanced data for China, Australia, Singapore and New Zealand; increasing our capabilities into South America with the addition of data from Chile; and the addition of new sources of data for anti-money laundering (AML) and watch list monitoring requirements.

Identity Solutions (IDS)

The Identity Solutions business, which provides domestic and international registration, tracing and engagement solutions also had a good first half financial performance with organic revenues growing 8% to £11.9 million (2013: £11.0 million).

IDS increased its investment in sales and marketing in the first half to capitalise on significant product range upgrades which were successfully launched this October. These new releases were across the whole portfolio of IDS' products and services, and included upgrades to its tracing, marketing and customer registration applications. These will support IDS' continued organic growth.

The Transactis business, acquired in October, becomes part of the IDS business and will result in a significant increase in revenue for IDS in the second half.

AcquisitionsDecTech, which provides fraud detection and prevention solutions, has performed well and is being successfully integrated into the Group. The release in the first half of a new version of Predator (its anti-fraud transactional monitoring software) with improved functionality has come from collaboration across the Group.

In October, the Group acquired Transactis (CDMS Limited) for an initial consideration of £5 million. This business, which aggregates customer transactional data on approximately 40 million consumers, supplies anti-fraud and marketing related services to both public and private sector UK organisations. A further £1.0m of consideration in shares will be deferred for a period of 12 months following completion, contingent on certain performance conditions being met. The acquisition of Transactis further strengthens GBG's identity intelligence credentials by bringing with it a valuable data asset and technology that is complementary to our own existing products.

OutlookThe Board is encouraged by the prospects for the Group. Our products and services are market leading and address real global issues for our clients. Looking ahead, the Group has had a good start to the second half of the year. Consequently, the Board remains confident about delivering significant year-on-year revenue and profit growth.

Our leadership team and employees, new as well as long term, have achieved a great deal in the first half and I would like to record the Board's thanks to them all.

1. CORPORATE INFORMATION

The interim condensed consolidated financial statements of GB Group plc ('the Group') for the six months ended 30 September 2014 were authorised for issue in accordance with a resolution of the directors on 24 November 2014. GB Group plc is a public limited company incorporated in the United Kingdom whose shares are publicly traded on the Alternative Investment Market (AIM) of the London Stock Exchange.

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of Preparation

These interim condensed consolidated financial statements for the six months ended 30 September 2014 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim condensed consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except when otherwise indicated.

After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, the Board continues to adopt the going concern basis in preparing the interim report.

The interim condensed consolidated financial statements do not constitute statutory accounts as defined in section 435 of the Companies Act 2006 and therefore do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 March 2014. The financial information for the preceding year is based on the statutory accounts for the year ended 31 March 2014. These accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. These accounts did not require a statement under either section 498(2), or section 498(3) of the Companies Act 2006.

Accounting Policies

As a consequence of the acquisition in May 2014 of DecTech Solutions Pty Ltd, a company based in Australia, the effects of changes in currency exchange rates have a greater relevance to the Group. The Group applies IAS 21: The Effects of Changes in Foreign Exchange Rates. Transactions and balances in foreign currencies are translated into Sterling at the rate ruling on the date of the transaction. Foreign currency balances are translated into Sterling at the period end exchange rates. Exchange gains and losses on such balances are taken to the Consolidated Statement of Comprehensive Income.

The Group's foreign operations (including subsidiaries and associates) based outside the UK may have different functional currencies. The functional currency of an operation is the currency of the primary economy to which it is exposed.

Prior to consolidation (or equity accounting) the assets and liabilities of non-Sterling operations are translated at the closing rate and items of income, expense and other comprehensive income are translated into Sterling at the rate on the date of the transactions. Exchange differences arising on the translation of foreign operations are included in foreign currency translation reserves within equity. These are transferred to the Consolidated Statement of Comprehensive Income when the Group loses control, joint control or significant influence over the foreign operation or on partial disposal of the operation.

The other accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2014, except for the adoption of new Standards and Interpretations noted below. Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group.

3. CYCLICALITY

Due to the cyclicality of our software renewal business, higher renewals in the second half traditionally result in the Group's performance being biased towards the second half of the year.

4. RISKS & UNCERTAINTIES

Management identifies and assesses risks to the business using an established control model. The Group has a number of exposures which can be summarised as follows: regulatory risk resulting from regulatory developments; changes in the Group's competitive position; non-supply by a major supplier; disaster recovery and business continuity; new product development; and intellectual property risk. These risks and uncertainties facing our business were reported in detail in the 2014 Annual Report and Accounts and all of them are monitored closely by the Group. Following the acquisition of DecTech Solutions Pty Ltd, based in Australia, which was partially funded through new borrowings, the Group has an increased exposure to currency translation and transaction risks as well as interest rate risk and these risks are monitored closely by the Group.

5. EXCEPTIONAL ITEMS

Fair value adjustments to contingent consideration liabilities in the six months to 30 September 2014 include a £250,000 downwards adjustment relating to the final settlement of contingent consideration relating to TMG.tv Limited (Note 17) along with a £268,000 charge relating to the partial unwinding of discounting relating to the contingent consideration on the acquisition of DecTech Solutions Pty Ltd (Note 18). This charge arises because contingent consideration due to be paid at a future date is discounted for the time value of money at the point of initial recognition and over the passage of time, this discount unwinds within the Consolidated Statement of Comprehensive Income although it is a non-cash item.

6. SEGMENTAL INFORMATION

The Group's operating segments are internally reported to the Group's Chief Executive Officer as two operating segments: Identity Proofing Division- which provides ID Verification and ID Employ & Comply services and Identity Solutions Division - which provides ID Registration, ID Engagement and ID Trace & Investigate services. The measure of performance of those segments that is reported to the Group's Chief Executive Officer is adjusted operating profit before amortisation of acquired intangibles as shown below.

Segment results include items directly attributable to either Identity Proofing or Identity Solutions.

Unallocated items for the six months to 30 September 2014 represent Group head office costs £357,000 (2013: £401,000), share of associate investment result £10,000 (2013: £155,000), exceptional items £809,000 (2013: £152,000), Group finance income £13,000 (2013: £2,000), Group finance costs £145,000 (2013: £42,000), Group income tax credit £323,000 (2013: £133,000 charge) and share-based payments charge £443,000 (2013: £338,000). Unallocated items for the year ended 31 March 2014 represent Group head office costs £564,000, share of associate investment result £159,000, exceptional costs £1,080,000, Group finance income £6,000, Group finance costs £85,000, Group income tax charge £474,000 and share-based payments charge £747,000.

Information on segment assets and liabilities is not regularly provided to the Group's Chief Executive Officer and is therefore not disclosed below.

DecTech, which was acquired during the period, is reported within the Identity Proofing Division.