Troubled insurer returns to growth for first time in five years

Credit card insurance group CPP, which has faced several years of reputational and financial damage, has returned to growth for the first time in five years.

For the six months ended June 30, group revenue increased by 18% to £41.8m from £35.4m while international revenues grew 52% to £30.3m. It said overseas markets were “more than compensating” for the further reduction in the UK renewal book, which is in managed decline, where revenues fell 26% to £11.4m.

Profit after tax increased 15% to £2.6m and reported operating profit increased 2% to £2.7m.

However, underlying operating profit reduced 42% to £2.1m with the growth from an increasing international customer base not yet covering the decline in the higher margin UK renewal book.

“In the international business we expect to see continued significant growth in revenues, led by India where we also expect the percentage margin to materially increase as higher margin products enter the mix,” CPP said.

The group, which was fined £10.5m by the Financial Conduct Authority in 2012 and paid out £65.8m in compensation to customers for mis-selling, announced in June it was moving some of its operations out of York to Leeds, after selling its headquarters to Gear4Music for £5.3m.

The company hit the headlines again last year after a boardroom coup led by major shareholder Hamish Ogston and investors Schroder saw turnaround chief executive Steve Callaghan replaced with a former employee of the business, Jason Walsh in May 2016.

On today’s results, Walsh said: “I am pleased with the performance of the business during the first half of this year, which has seen a return to revenue growth for the first time in five years. This was the result of growth in a number of our key international markets, but particularly India, where our consumer-led products and business partner relationships have gone from strength to strength.

“During the half, we simplified our operating structure by devolving greater responsibility to our country leaders and acquired Blink, which is performing as intended and is helping to ensure we have the right platform for product innovation. These factors, along with our improved free capital position, will enable us to maximise the significant opportunities for sustainable growth that are available across the group.

“We are continuing to deliver on our strategic plan and as we enter the second half of the year, we expect to continue this revenue growth momentum and remain confident with the outlook for the full year.”

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