As commerce and communication move online, such organisations as Barclays (BARC) and HM Revenue & Customs are increasingly turning to GB Group (GBG) to spot and stop fraud. Indeed, the company - which uses 220 worldwide databases to check whether clients' customers and employees are legitimate - grew adjusted first-half operating profit by 47 per cent year-on-year to £3.8m.
GB supplemented strong organic growth with acquisitions: these added customers, broadened the product range and expanded GB's verification services to encompass over 4bn individuals. For instance, it purchased anti-fraud software group DecTech and transactional data specialist Transactis, which are on track to boost full-year sales by a fifth. Moreover, broker Peel Hunt expects Transactis to increase group earnings by 7 per cent in the year to end-March 2016.
In fact, DecTech was the main driver of a 59 per cent surge in sales at GB's identity-proofing division to over £11m, supported by the international roll-out of identity-verification solution ID3. Meanwhile, GB's identity solutions segment - which helps clients to register, trace and engage customers - delivered a somewhat more sedate 8 per cent rise in sales.
With identity verification "data provides the answer" says chief executive Richard Law. That's why GB is looking to access more data by, for instance, partnering with Australian data analytics group Veda and Chinese payment group Netelis.
Peel Hunt expects full-year adjusted pre-tax profit of £9.4m, giving EPS of 6p (from £7.1m and 4.8p in 2014).
| GB GROUP (GBG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 143p | MARKET VALUE: | £172m | |
| TOUCH: | 140-146p | 12-MONTH HIGH: | 164p | LOW: 128p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 40 | |
| NET ASSET VALUE: | 35p* | NET CASH: | £8.6m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 18.1 | 1.33 | 1.1 | nil |
| 2014 | 23.2 | 1.39 | 1.5 | nil |
| % change | +28 | +5 | +36 | - |
Ex-div:- Payment:- *Includes intangible assets of £43.4m, or 36p a share | ||||
