Adjust for a £14.8m provision associated with the FSA's investigation into life assistance company, CPP – which provides credit card identity protection and mobile phone insurance – and group pre-tax profit was roughly flat last year at £32.4m. But that ongoing probe remains a source of huge uncertainty for the group, leaving the shares looking vulnerable.
Chief executive, Paul Stobart, who joined the group October, admits that, until the FSA makes a determination on the issues involved – relating to failings in CPP's sales processes and the design of its card protection product – the group will be unable to fully assess the likely impact. That lack of clarity is understandable given that all customers dating back to 2005 will be reviewed, with those affected offered redress and with any automatic renewal procedures being stopped. With the implications of that probe still unclear, the board also decided to axe the final dividend entirely. Given that backdrop, the group's plans to expand into such potentially promising emerging markets as Brazil is unlikely to grab much attention.