‘We do not underestimate scale of challenges ahead’ – CPP
CARD and phone protection provider CPP warned it was “facing significant financial challenges in the short to medium term”.
The York-based business has faced a difficult 12 months, culminating recently in founder Hamish Ogston making an initial approach, which could still be taken forward, to take the company private.
This followed a record fine from the Financial Services Authority into its selling practices which coupled with redress to customers totalled £33.4m.
More positively, CPP has offloaded its North American division for £26.1m and agreed an extension of its revolving credit facility with its lenders until the end of September.
Announcing CPP’s 2012 results, chief executive Paul Stobart said: “The group faced another challenging year which, combined with a difficult operating environment, resulted in a modest operating performance. As expected, revenue declined in the UK, impacting on the profitability of the group.
“In the year, the FCA investigation was concluded and there is a substantial fine to pay. Within the business, we have effected a great deal of change to enhance customer experience, product propositions and our governance framework.
“In addition, a strategic review resulted in the proposed disposal of the North American business alongside a short term extension to the revolving credit facility in April 2013.
“Looking ahead, we will continue to face significant financial challenges in the short to medium term. We need to secure our longer term financing, manage the redress programme, reposition the business and reshape our business model to reflect our changed circumstances.
“We do not underestimate the scale of the challenges ahead. In the longer term, I believe that the actions we are taking to rebuild our business and reputation, combined with the enhancements to governance and risk management we have put in place, will provide us with a stronger, more stable platform from which to move the business forward.”
Group revenue, from continuing and discontinued operations, declined as expected to £319.7m from £346.1m.
Underlying operating profit, from continuing and discontinued operations, reduced as a result of UK performance to £36.3m. CPP posted a pre-tax loss of £19.9m.
