GB Group boosts sales but pre-tax profits suffer impairment blow
Chester-based identification verification specialist, GB Group, reported better revenues for the year to March 31, 2023, with turnover jumping from £278.8m from £242.5m the previous year.
However, the group posted a £118.8m pre-tax loss, which compares with a pre-tax profit of £21.7m in 2022. But GBG explained: “Reflecting the macro challenges in the last year, the annual impairment review resulted in a non-cash exceptional goodwill impairment charge of £122.2m against our Identity business in the Americas.”
Adjusted operating profit levels rose from £58.8m the previous year to £59.8m.
Net debt decreased slightly, from £107m to £105.9m.
Despite the pre-tax loss, the group has increased the final dividend payment to shareholders by five per cent, to 4p per share.
Addressing the convergence of identity and fraud, while driving efficiency through simplification, the group prioritised product and technology investment, and simplified its portfolio to meet the rapidly changing market needs which has enabled GBG to accelerate product innovation, it said.
CEO, Chris Clark, CEO, said: “GBG continued to make important strategic progress and operational improvements that will have long term benefits – however, we were impacted by unexpectedly deep post-pandemic corrections in some end markets.
“These corrections were largely felt in the internet economy, notably by cryptocurrency and fintech customers primarily in our Identity business in the Americas, as flagged in our February trading update.
“Looking ahead to FY24, since our update in February, there has been no material change in market conditions.
“Uncertainty remains – however, we still expect some gradual revenue acceleration in the latter part of the year.”
He added: “The board is confident that GBG will deliver its FY24 profit expectations assisted by a group-wide focus on efficiency.
“The business is well-placed to benefit from structural growth, including the increasing proliferation and sophistication of fraud through the advent of generative AI, capitalising on the breadth of its capabilities and global reach to deliver our mid-term growth targets.
“GBG has a high quality global customer base, engaged people and differentiated products. The business is well positioned to capitalise on the significant potential in our markets with solutions that are crucial for customers to operate safely and efficiently in a digital world.
“Notwithstanding the current headwinds facing the business, the board remains confident in the long term opportunity for GBG as the world continues to build an ever-increasing business presence online.”
