The internet provides a global platform for banking, commerce and other activities, but its inherent anonymity fuels fraud and deception. This trend continues to buoy GB Group (GBG), which conducts identity checks for clients such as HSBC (HSBA). The group grew its underlying sales and operating profits by 15 and 30 per cent, respectively, over the year to 31 March.
Sales rose 11 per cent to £27m at its identity solutions business, which helps the likes of Tesco (TSCO) and Barclays (BARC) to understand and engage with customers. GB's smaller identity proofing division made strong gains, too, growing adjusted operating profits by 23 per cent to £1.6m. This unit has now combined its UK and international identity-checking tools into one solution, and expanded its in-depth verification service to encompass 30 countries - 10 more than last year.
GB also signed several longer-term contracts, boosting its deferred revenue by just over a quarter to £6.7m. And it expanded into the high-growth Asia Pacific market with the £21m purchase of Melbourne-based DecTech Solutions, which verifies online loan and credit card applications. Management believes DecTech's fraud and risk management solutions complement GB's focus on identity verification.
This year broker Peel Hunt expects adjusted pre-tax profits of £9.3m, giving EPS of 5.9p (from £7.1m and 4.8p last year).
| GB GROUP (GBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 161p | MARKET VALUE: | £191m | |
| TOUCH: | 159-163p | 12-MONTH HIGH: | 164p | LOW: 94p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 50 | |
| NET ASSET VALUE: | 26p* | NET CASH: | £11.8m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 22.2 | 1.3 | 1.8 | 1.20 |
| 2011 | 24.2 | 1.5 | 2.2 | 1.28 |
| 2012 | 31.8 | 2.5 | 3.8 | 1.38 |
| 2013 | 39.4 | 3.5 | 4.0 | 1.50 |
| 2014 | 41.8 | 4.0 | 3.2 | 1.65 |
| % change | +6 | +14 | -20 | +10 |
*Includes intangible assets of £23m, or 20p a share Ex-div: 23 Jul Payment: 29 Aug | ||||
