2018 Full Year Results
CPP Group Plc breaks £100 million turnover in annual results
We are pleased to announce an 18% constant currency revenue increase in our 2018 annual results to £110.1 million, compared to £97 million in 2017.
The growth comes as a result of global customer numbers increasing by 50% to 8.2 million with significant growth in key markets, including India and Turkey.
Underlying operating profit has reduced by 23% on a constant currency basis to £3 million. Profit before tax is £0.3 million reflecting our investment in business growth projects and costs associated with restructuring parts of the business.
The investment costs made in 2018 amounted to £2.5 million, which represents the emphasis that we are placing on global growth projects and long-term sustainability.
Strategic investments in UK-based cyber risk management company, KYND, and Indian Business Process Management (BPM) company, Globiva, have been made to enhance technology-led product capability, as well as driving efficiencies in the value chain.
We have also restructured our European operations which has led to significant one-off exceptional costs of £3.5 million. This has streamlined operations and is expected to generate annual cost savings of between £4.0 million and £4.5 million.
Globally, India and Turkey both continue to be significant markets for us, with constant currency revenue growth of 54% and 41% respectively. As well as increased revenue, customer numbers have grown by 95% and 47% respectively in the last 12 months.
We are continuing to use available resources to expand into markets that provide significant opportunities for our products, including Bangladesh and the UK, which we re-entered in 2018. We are now operating in 12 markets worldwide, including a presence in China and Mexico, two key markets for development in 2019 and beyond.
Other key points to note:
- Adjusted underlying operating profit rose by 14% on a constant currency basis to £5.5m, which excludes investment costs and exceptional items, showing strong performance from the core business
- Maintained strong renewal rates of 71.9%, with renewal rates in European markets in excess of 80%
- Creation of EU hub in Madrid to service customers in Spain, Germany, Italy and Portugal
- Important strategic deal secured by Blink for a travel assistance product with Blue Cross in Canada
- Appointment of regional CEO in South East Asia
- Partnered with one of the largest retailers in Mexico to pilot an Extended Warranty product
Jason Walsh, Chief Executive Officer, commented:
“The Group has seen an extremely strong revenue performance in 2018 and this has come at a time when we are also investing in global business growth projects. We have also restructured parts of the business that will enable us to deliver greater operating efficiencies. This will ultimately deliver significant annual cost savings in 2019 and beyond.
“A key component of our strategy is to focus on long-term sustainability and to expand our global reach. This means identifying markets that offer large-scale opportunities for our products and services. The market performance recorded for India and Turkey is a clear reflection of the positive results being seen from taking this approach.
“In 2019, we expect to continue on our growth plan by establishing ourselves in Bangladesh, setting up a platform to expand into South East Asia and focusing on our Mexico and China markets as well as the many opportunities that exist to grow in our existing markets.”