Cppgroup Share News (CPP)

LONDON (Alliance News) - CPPGroup PLC on Friday said it expects its underlying operating profit to be "materially higher" in 2016 than previously expected, although its revenue will be "materially lower" following the closure of Airport Angel.

The guidance came as CPP reported an operating profit before exceptional items and matching share plan charges of GBP2.2 million in the first six months of 2015, against a GBP3,000 loss on the same basis in the same half the prior year.

CPP swung to a net profit of GBP17.1 million in the half, compared with a GBP2.7 million net loss in the prior year period, as lower revenue was more than offset by a GBP18.9 million exceptional credit relating to the compromise of the commission deferral agreement, net of associated costs, of GBP19.4 million. CPP also booked restructuring costs in Spain of GBP486,000.

CPP agreed in July 2013 with some of its business partners to defer payment of commission that would otherwise have become due over the 12 months to the end of June the following year for up to four years. That agreement came with new banking facilities to provide funding to the company.

It settled the commission deferral agreement on raising GBP20.0 million in an equity fundraising as part of a move to the London Stock Exchange's junior market, AIM, from the London Main Market, in February 2015.

The settlement of those liabilities of some GBP21 million was achieved with a payment of GBP1.3 million.

CPP is aiming to recover after it was rocked by its part in a scandal that saw its card protection and identity protection products mis-sold to clients through a number of the UK's high street banks. CPP was fined GBP10.5 million over the scandal in November 2012. A redress scheme worth up to GBP1.3 billion, with the costs shared among banks and other sellers of the products, was set up early in 2014.

"CPP has made significant progress in the first half of 2015. Securing new equity funding and restructuring of the group's debt has provided the business with a stable financial platform, and the business has delivered an improved profit performance underpinned by our on-going focus on costs," Chief Executive Stephen Callaghan said in a statement.

"There is much work to do for the group to realise its growth ambitions, however we are seeing encouraging progress from the actions we are taking to improve our financial performance. We expect to make further progress during the remainder of 2015 and, looking to next year, our current view is that the group's underlying operating profit will be materially higher than the previous expectations set for 2016," Callaghan added.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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