LONDON (ShareCast) - (Sharecast News) - Location, identity and fraud software company GB Group said in an update on Thursday that it expected to report revenue for the year just ended of £242m, with adjusted operating profit to beat market forecasts.
The AIM-traded firm said it expected organic constant currency growth to be around 10.5% for the 12 months ended 31 March.

It described that level of growth as "pleasing", given the "substantial" one-off benefit in the prior year related to the US government's stimulus programme.

Adjusting for that, underlying growth was 15%.

In identity, second-half underlying growth was described as "good" across all regions, driven by an increasing number of digital transformation projects requiring identity verification capabilities and further demand in the fintech sector.

Location's underlying growth was supported by the ongoing consumer shift to greater online activity and structural tailwinds, as brands adopted direct-to-consumer strategies.

As expected, fraud experienced strong year-on-year growth, with on-premise deployment activity resuming, enabling new contract wins and strong customer retention.

As a result of the strong revenue performance, GB Group said it expected to deliver an adjusted operating profit margin at the upper end of expectations, of around 24%, resulting in adjusted operating profits of at least £58m - ahead of market expectations.

Taking into account the Acuant and Cloudcheck acquisitions, completed at the end of November and January respectively, proforma enlarged group revenue was around £275m for the year ended 31 March.

Cash generation continued strongly, the board said, enabling it to repay $40m of the $210m debt financing drawn in November to finance the acquisition of Acuant.

The company's net debt at year-end on 31 March stood at £107m.

GB Group said it was monitoring events in eastern Europe closely, supporting a "small number" of team members with connections to Ukraine.

The firm said it had no operations or active suppliers in Russia, Belarus or Ukraine, and confirmed that business had been suspended with the "small number" of customers incorporated in Russia.

Exposure to Russian customers was limited, with combined revenue in the 2022 financial year of less than 0.5% of group revenue.

"I am very proud of the growth we have delivered in 2022, and our achievements in delivering business-critical digital identity solutions to our customers," said chief executive officer Chris Clark.

"We carry momentum into our new financial year with real enthusiasm for what we can achieve despite some significant macro uncertainties, including ongoing pandemic restrictions, geopolitical uncertainties and the backdrop of rising inflation.

"The acquisition of Acuant accelerates our product and market strategies and we are confident that, together, we have more resources and opportunities than ever before to achieve our significant potential."

GB Group said it would announce its full-year results during the week of 13 June.

At 1112 BST, shares in GB Group were up 11.04% at 633.5p.

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