CPP's the right partner

Many people have suffered that unpleasant sinking feeling upon realising that a wallet or handbag has been lost. In such circumstances, the first of many frantic phone calls are usually to a bank in order to cancel cards. But help is at hand - CPP offers a service for managing that entire hellish process. Customers make one call and all cards are cancelled and replaced, authorities notified if documents have been stolen, and cash advances, accommodation, travel and car keys all arranged. The group aims to appeal to insurance-minded consumers and CPP boasts an impressive track record.

Indeed, and while CPP only floated on the main market in March, it has a 57 per cent slice of the UK card protection market. In fact, during its last five years in private hands, CPP managed to deliver average annual operating profit growth of over 23 per cent. That trend was continued with the group's first-half figures in August - revenues grew 11 per cent in the year to end-June and underlying pre-tax profit rose 38 per cent to £22.7m

But CPP isn't just a bank card protection services. It also offers security against identify theft and has a small mobile phone insurance service - all of which boast decent growth prospects. After all, as people spend more time online then demand for identity protection is increasing, while the global shift from cash to plastic offers a burgeoning card protection market.

Shrewdly, CPP accesses its customer base through partnerships with banks and store card providers, exclusively marketing to consumers when a new card is issued or renewed. Business partners receive a commission fee for each customer that's signed-up for CPP’s services and the group provides marketing and outsourcing services to its partners.

The group boasts over 200 such business partners, but the top five - including Barclays, Santander, Citibank and HSBC - do account for a fairly hefty 56 per cent of revenues. So the loss of any one would be problematic. Still, over half of its partners have been in place for between six and 20 years, while CPP's major business partners have always decided to renew their existing deals. CPP also faces direct competition - such as from Affinion and LSG, which offer similar products at similar prices and also take advantage of relationships with well-known brands such as Lloyds Banking Group.

But CPP isn't just a UK play - it boasts customers in Europe, north America and Asia Pacific. The opportunity for growth in emerging markets, which currently generate a small proportion revenues, is especially noteworthy. In the first-half, for instance, deals were signed in India with Barclays and Deutsche Bank, taking the total number of relationships that CPP has there to nine. Moreover, CPP has made its first move into mainland China after signing a partnership deal with Guangdong Development Bank.