CPP announcement sees share price fall
Insurance products provider CPP Group saw its share price drop by 42p on Tuesday in the wake of a trading update that lowered earning expectations for the next two years.
The update which also noted the Leeds-based company has successfully negotiated a contract extension with it largest business partner in India, however it noted that while the new contract to December 2024 improves “certainty over a significant proportion of CPPs future revenues” its customer has also “secured improved commercial terms” which will see a drop in the company’s EBITDA for this year.
Alongside this announcement of a lower financial performance – which is now expected to be in the region of £5.8m-£6.3m, which is in line with the group’s figures for 2020 but short of the performance last year to 31 December 2021 when EBITDA was £7.5m, the company also highlighted that its ongoing change management programme which includes the design and build of a new IT platform will “take longer, cost more to implement and secure fewer benefits than originally anticipated”.
It was this combination of news which sent the company’s share price falling 17%, with its CEO, Simon Pyper noting that he and the board were working on “plans to build a business which delivers long term profitable growth”
Pyper said: “In the 2021 Annual Report I said that “We are, as we exit from the UK MGA and as the renewal book continues to run-down, in need of a clear and executable strategy for the UK, and this is something that the board and I will address during 2022″. We have made good progress, and I expect that we will later this year update shareholders and other stakeholders on our direction of travel and on our plans to build a business which delivers long term profitable growth and increased value to shareholders.”
