Gb Group Regulatory News (GBG)

12 Apr 2007 07:01

GB Group PLC12 April 2007 Embargoed until 07.00 12 April 2007 GB GROUP PLC ("GB" or the "Group" or "GB Group") TRADING UPDATE The Group today announces a trading up-date for the year ending 31 March 2007. GB Group has substantially improved its future prospects over the course of this year. The Directors are pleased to report that revenues for the year are expected to show good growth, up 17 per cent. at £15.0 million compared to the previous year. In addition, the Group has enhanced its DataAuthentication offering to its clients. Due to delayed recognition of revenues within the DataAuthentication business and other factors, the Group expects to report a loss before tax of £1.2 million, approximately £0.8 million greater than the current estimates, for the year ending 31 March 2007. Cash balances at 31 March 2007 are, however, ahead of market estimates at £5.2million, principally as a result of non-refundable cash receipts in respect ofdeferred DataAuthentication revenue. Trading in GB's DataAuthentication business is strong and revenues for the yearare expected to have more than doubled to £4.8 million (2006: £1.9 million). Theexperience during the second half of the year was that lead times for closingcontracts, together with the time taken for clients to integrate GB's services,increased as new businesses of increased size, particularly in the FinancialServices sector, became customers. As a result, contracts were closed later thanexpected and a greater amount of non-refundable, prepaid revenue has beencarried forward for recognition in future periods in accordance withInternational Accounting Standards. Contracted prepaid revenue deferred tofuture periods at 31 March 2007 was £1.2 million and revenue recognised in theyear is below market expectations by a similar amount. In GB's traditional businesses of DataIntegrity and DataSolutions, marketsbecame increasingly mature with greater than expected competitive pressure onturnover and profitability. To counter this trend, and following furtherinvestment during the year, GB has recently made a high proportion of theseservices available online. This innovation successfully differentiates GB fromits competition and has been well received in the market. DataAuthentication DataAuthentication has enjoyed strong growth and has excellent prospects. Fromits inception in 2004, revenue has grown to a current monthly rate ofapproximately £0.5 million and contracted clients now number 154 including manyof the leading businesses in Financial Services, Mobile Telecommunications andGaming. It is now also acquiring significant clients in the Retail sector. In March2007, GB entered into a five year agreement with Europe's leading electricalretailer, DSG international plc ("DSGi"), to provide and host a customerverification and registration processing system to all of DSGi's stores in theUK. The DataAuthentication business has the opportunity to become the dominantprovider of online verification solutions of individuals in the UK. To exploitthis opportunity, further appropriate financial investment is being made,particularly in the areas of sales and marketing. During the financial year to 31 March 2007, GB expanded its verificationbusiness into international markets as planned. Replicating the successful UKmodel, GB now offers electronic services to authenticate individuals in 21countries. During the second half of the financial year, significantinternational contracts were signed and it is anticipated that thisinternational business will demonstrate substantial future growth. DataIntegrity and DataSolutions The Directors believe these markets, essentially the capture, processing andanalysis of address data, will move from the present periodic supply of data toclients on disk to the real time on-line availability of data to clients througha web-based delivery solution. GB has, therefore, developed such an onlinesolution and, since its introduction in January, this solution has successfullydisplaced competing "off line" products provided by GB's competitors. Theimprovement in the offering gives GB the opportunity to increase its revenue andmarket share and, to this end, GB will continue to invest in new productdevelopment and in sales and marketing in the year to 31 March 2008. Infrastructure and Technology As planned, GB invested £1 million in infrastructure and technology in December2006 when it moved to larger offices and simultaneously renewed its computersystems giving the business significant capacity for growth. Cash and Dividend Cash balances at 31 March 2007 of £5.2 million were ahead of expectations. GBhas sufficient resources to invest in both technology and personnel for thebenefit of the Company and its shareholders. In line with this strong liquidityand GB's future prospects, the Directors intend to recommend a maintained finalordinary dividend of 0.75 pence per share in respect of the year to 31 March2007 at the AGM on 19th July 2007. Summary This continues to be a business with real and substantial prospects and theDirectors are excited by the present opportunities. - Ends - For further information, please contact: GB Group plcRichard Law, Chief Executive 01244 657 333Mona Navin-Mealey, Finance Director KBC Peel Hunt Ltd 0207 418 8900David DaviesNicholas Marren Weber Shandwick Financial 0207 067 0700Richard HewsHelen Thomas Website www.gb.co.uk Notes to Editors About URU(TM) URU is an online identity verification service which was developed jointly withBT and is DataAuthentication's principle offering. URU, which is powered by GB'sID3TM search engine and decision making technology, provides access to GB'scomprehensive range of identity data and BT's high capacity web delivery. Ithelps organisations to protect themselves from the growing problem of identitytheft and fraud, which is estimated to cost the UK economy over £1.7 billion perannum. URU enables companies subscribing to the service to make an instantdecision whether to accept the identity claimed by any given individual andconfirm their age in seconds. URU works by cross checking personal information provided by an individual atthe point of acquisition against a comprehensive range of datasources to confirmthat an individual is who they claim to be, live where they claim to live andmeet certain minimum legal age requirements. No personal data is disclosed by the reference databases and as a result URU iscompliant with the Data Protection Act. URU also provides a valuable audit trail demonstrating that the necessary checkshave taken place, thereby helping companies comply with legislation, includingthe 2nd European Money Laundering Directive, Proceeds of Crime Act and MinimumLegal Age requirements of certain industry sectors. The addition of data from CallCredit also enables users of URU to incorporatecredit reference data. As a result of legislation, new opportunities and social responsibilityrequirements, the market for online ID verification is significant and growing.Although an estimated 0.5 billion manual ID checks are conducted annually in theUK, less than 6%* of these are currently performed electronically.(* figures as at November 2006) URU has demonstrated that online checks are more effective, less expensive andmore robust. The market is moving towards online checks as fraudulent documents become evermore sophisticated, more readily available and more difficult to check manually.It is estimated that by 2010, the market for online ID checks could be 300million checks per annum. GB works closely with trade and industry associations, such as the Finance andLeasing Association, the Remote Gambling Association and the FinancialTechnology Research Centre, to advise businesses that more robust processes canprevent financial crime. We have worked closely with the Gaming Industry toaddress social issues such as underage gambling and addiction and our SocialResponsibility Consultancy helps Gaming operators formulate best practice tocomply with regulatory requirements and improve profitability. About ID3-Check ID3-Check is an international online identity verification service developed byGB's DataAuthentication business. It is a hybrid international version of thetechnology underpinning URU, GB's joint project with BT which is now the UK'sleading online age and identity verification service. The service helps organisations to protect themselves from the growing globalproblem of identity theft and fraud. ID3-Check enables organisations subscribingto the service to make an instant decision whether to accept the identityclaimed by an individual and confirm their age in seconds. ID3-Check can confirmthe age and identity of nearly half a billion people in 21 countries includingAustralia, Canada, the USA and most Western European countries. ID3-Check works by cross checking personal information provided by an individualat the point of acquisition against a comprehensive range of data sources toconfirm that an individual is who they claim to be, live where they claim tolive and meet certain minimum legal age requirements. No personal data is disclosed by the reference databases and as a resultID3-Check is compliant with Data Protection laws. ID3-Check also provides a valuable audit trail demonstrating that the necessarychecks have taken place, thereby helping companies comply with legislation,including the 2nd European Money Laundering Directive, Proceeds of Crime Act andMinimum Legal Age requirements of certain industry sectors. As a result of legislation, new opportunities and social responsibilityrequirements, the market for online ID verification across borders issignificant and growing. About GB Group plc GB Group plc provides a range of products and services to enable organisationsto capitalise on one of their greatest assets - customer data. The Company hasexpertise across a range of sectors and is able to transform customer data intovaluable information, enabling clients to make better, more informed decisions. The development of innovative software and services, through to the provision ofthe UK's most comprehensive consumer business databases - The National Register(R) and the National Authentication Register - positions GB Group as a widelyacknowledged industry leader in its specialist markets. We are constantly improving business processes by building on our core values ofInnovation, Quality and Excellence. This is reflected in our customersatisfaction surveys and also through research, carried out by ManchesterBusiness School, which confirms our products are out-performing the competition. GB Group plc has three complementary offerings: • DataAuthentication helps businesses validate personal identity information and provides anti-fraud solutions to fight crime. • DataIntegrity helps companies capture and maintain accurate customer contact data, an essential foundation for any profitable customer relationship. • DataSolutions empowers companies to consolidate and analyse customer data from various sources, enabling them to make better, more informed decisions. Established since 1989, GB's core competencies combined with industry sectorknowledge have enabled the company to deliver significant value to organisationshelping them derive maximum value from their customer data and sustain realadvantage over their competition. GB Group is supported by its key relationships with major organisations withwhom it works with on major initiatives (an example being British Telecom),together with a team of highly talented and motivated staff successfullydelivering business solutions. GB Group plc is listed on the London Stock Exchange (www.gb.co.uk). This information is provided by RNS The company news service from the London Stock Exchange