CPPGroup set to beat expectations as it exits legacy businesses
By Josh White
Date: Thursday 19 Jan 2023
(Sharecast News) - Assistance and insurance specialist CPPGroup said in an update on Thursday that it was expecting to report revenues from continuing operations around 19% higher year-on-year for 2022, or 15% on a constant currency basis.
The AIM-traded firm said EBITDA from continuing operations was set to be better than market expectations at £6.9m, down from a restated £7.2m in 2021.
In October, the group set out the conclusions from its strategy review and accompanying change management programme, which would see it exit from its legacy operations, address "critical" IT infrastructure requirements, and migrate towards an 'InsurTech' business led by Blink and supported by CPP India and CPP Turkey.
"The group has already made some good progress with regard to its legacy operations, withdrawing from China, Bangladesh, and Mexico," the board said on Thursday.
"Furthermore, in the fourth quarter of last year, the group agreed terms with third party underwriters to exit from its Spanish and Portuguese operations over the next 12 months.
"As we look to 2023 the group expects, as part of the change management programme, to complete the operational scalability project for Blink by the end of the first quarter and, by the end of the third quarter, to have delivered the first phase of a new IT platform for its operations in India."
CPPGroup said its change management programme was a "complex set" of seven inter-dependent projects that was not expected to conclude before the end of the 2025 financial year.
"Inevitably, given the scale of the changes being implemented, there will be hiccups along the way, which in turn may lead to some adjustment to both targets and deadlines.
"Notwithstanding the challenges of implementation, the direction and speed of travel is considered to be both right and necessary and the board is pleased with the progress being made so far."
The board said the core business - Blink, CPP India, CPP Turkey and Globiva - performed "well" in 2022, with further progress expected in the current financial year.
"As expected, the legacy business continues to decline and plans for the ultimate withdrawal from it will be addressed over the medium term by the change management programme."
CPPGroup said it would publish its audited full year results for 2022 on 28 March.
At 1133 GMT, shares in CPPGroup were down 2.73% at 107p.
Reporting by Josh White for Sharecast.com.
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