CPP in revenue warning

CPP warned revenues will suffer as the Financial Services Authority continues its investigation into the way it sold identity protection products.

The York-based company said that while revenue had grown 12% in the first four months of the year, its decision to suspend some sales of identity protection products would hit that figure later in 2011.

It also announced the launch of a replacement product for the one under investigation. It emerged in March that the FSA had raised questions about the way customers were sold identity protection over the telephone by CPP.

Chairman Charles Gregson said: “CPP is committed to running its business with the highest levels of integrity and treating its customers fairly. We continue to work closely with the FSA in relation to its ongoing investigation and remain hopeful of a swift conclusion to these discussions to remove the ongoing uncertainty around the business.

“The board continues to believe in the relevance and consumer appeal of its products and services, and we have been encouraged by the ongoing support received from our business partners.

“We are co-operating with the FSA and further announcements will follow once the Group has further clarity on the FSA’s findings and conclusions.”

CPP shares, that were trading at above £2 before the FSA investigation, closed last night at 118p.

In the company’s stock market update this morning, CPP said it had seen sales grow by 14% in Northern Europe and 12% in the UK but revenues had fallen by 6% in Southern Europe. The Asia Pacific and North American regions saw revenues grow by 18% and 22% respectively.

Chief executive Eric Woolley said: “We are working hard to make further progress in our new developing markets, which offer significant longer term potential, and we have seen a number of pleasing developments including the addition of a new business partner, SBI Cards, in India.

“Whilst the continuing uncertainty resulting from our ongoing discussions with the FSA is unwelcome, I remain confident that we have excellent products which fulfil a significant and growing need in our society, and a sound business model around which we will continue to grow both in the UK and internationally.”