Revenues climb but legacy business profits fall at insurance products provider
The boss of Leeds-headquartered CPP Group, a provider of assistance and insurance products, says the company must tackle falling profitability in its legacy business, even as it achieves an overall rise in revenues.
CEO Simon Pyper commented as the group published its half year results for the six months ended 30 June 2022, which includes an increase in group revenue from continuing operations of 18% to £77.8m (H1 2021 restated: £65.7m).
Core revenues increased by 26% to £69.5m (H1 2021: £55m), with EBITDA from continuing operations rising by 18% to £3.1m (H1 2021 restated: £2.6m).
Pre-tax profits from continuing operations climbed to £1.3m (H1 2021 restated: £0.5m loss).
Pyper said despite global economic headwinds, the Group had from a trading perspective managed to deliver robust revenue growth.
But he added: “The good performance from our core markets somewhat masks the structural decline in profitability from our Legacy Businesses, a decline long understood by the business though never addressed.
“On appointment, I found a business which had no adequate plan to address the decline in its Legacy Business, which had no sense of purpose, and no strategy for the future.
“Consequently, much of my time since appointment as CEO has been focused on simplifying the business, simplifying our proposition, and simplifying our management and operating structures.
“In spite of the uncertain economic climate, the Board remains confident in the outlook and growth prospects for our core operations. However, structural issues pertaining to our Legacy Business and associated IT costs need to be addressed which will have some impact on overall performance.”