GB Group identifies growth

Companies of every ilk are under mounting pressure to prevent and detect such violations. And the EU’s new data privacy rules (‘GDPR’), introduced in May, place an even greater emphasis on the need to verify and safeguard personal data in a lawful and transparent manner.

This is all excellent news for GB Group (GBG), an identity data intelligence specialist that helps organisations to “validate and verify” the identity and location of their customers, while also providing the technology for employee screening. Somewhat reassuringly, its programme to implement GDPR over the year to March 2018 went well, which leaves it “well-positioned from a compliance perspective”.

GB can verify the identity of 4.4bn people globally. In fact, 'global' is a word underpinning its investment case. As at 31 March, customers spanned 79 countries, up from 71 last year. And while revenues for the previous 12 months rose by 37 per cent to £120m, international sales constituted 34 per cent of the total – up from 31 per cent, with strong progress made across the Europe, Middle-East and Africa, and Asia Pacific regions. House broker Peel Hunt says this three percentage point increase “is just a taster of the globalisation of GBG to come”.

The group’s top-line momentum also combines organic and acquisitive growth, the latter helping to enhance its datasets and geographic footholds. Organic revenues rose by 17 per cent last year, which was an acceleration from the 10 per cent achieved the prior year. Excluding £3.5m from the sale of a one-off perpetual licence to a European bank, organic growth still came in at 15 per cent.

On the acquisition front, GBG bought Postcode Anywhere – 'PCA Predict' – in May 2017 for £73.9m, supported by a £58m share placing at 340p. This provides UK and international address validation and data services, and was, at the preliminary results stage, growing faster than it had been pre-acquisition. It's contribution to revenues at GB's customer and location intelligence business, helped the division's sales rise 53 per cent in the 12 months to £49.9m. With decent net cash on the balance sheet, GB is in a good position to capitalise on future buying opportunities.

Finally – and encouragingly – GBG’s sales impetus translated into a 33 per cent rise in pre-tax profit to £13.4m, notwithstanding higher acquisition-related costs, and underlying operating margins rose.