Gb Group Regulatory News (GBG)

11 Oct 2007 07:01

GB Group PLC11 October 2007 11 October 2007 GB GROUP PLC Trading Update GB Group ("GB" or the "Group") is today pleased to announce a trading update forthe six months ended 30 September 2007. Overview Group trading in the first half of the year was positive with revenue broadly inline with market expectations and the loss before tax was significantly lowerthan market expectations primarily due to improved margins. This favourable performance was the result of a pleasing second quarterperformance from all of the Group's business areas. GB has maintained its lead in the market for electronic age and identityverification solutions and growth in the Group's DataAuthentication businessresumed in the second quarter of the current financial year with transactionvolumes ahead of the previous quarter. Revenue also grew in the Group's traditional business units, DataIntegrity andDataSolutions, as a result of recently developed online services. Accordingly,the Board considers that the future prospects for these business units are muchimproved. The Group has adequate cash resources for its requirements and, as at 30September 2007, cash balances were in line with market expectations at £4.1million (2006: £5.2 million). GB believes that its strategy of developing, and investing in, products andservices which can displace competing legacy products and services is working,and that its businesses are developing a valuable strategic position in theirrespective markets. In conclusion, the Board continues to be optimistic about the future prospectsof the Group. Trading Summary Unaudited Group revenues increased by 13% to £7.9 million in the six months to30 September 2007 (six months to 30 September 2006: £7.0 million). Gross marginsimproved during this period principally as a result of higher levels of revenuegenerated within the DataAuthentication business unit and the impact ofoperational gearing. Overheads in the first half of the year increased to fundgreater sales, marketing and infrastructure in DataAuthentication but did notincrease to the originally planned level and are not expected to increasesignificantly further in the second half of the financial year. Unaudited Grouplosses for the six months to 30 September 2007 were £1.0 million (2006: £0.6million) which is ahead of market expectations. DataAuthentication The number and quality of URU clients continues to grow and as at 30 September2007 totalled 195 (31 May 2007: 174). The number of individual transactionsearches (excluding one off batch jobs) has increased to 2.2 million for the sixmonths to 30 September 2007 compared to 1.6 million in the corresponding periodlast year. Revenue during the period was £2.8 million (2006: £2.4 million). This increase in individual transaction levels has been generated from bothexisting and new clients. Existing clients have increased their usage to complywith new legislation around Online Gaming and the European 3rd Money LaunderingDirective. This is a trend that is expected to continue as the effects ofgreater electronic trade, and the regulations to combat crime, combine to drivethe market towards electronic age and identity verification. As indicated in the trading update in July 2007, the shift of the market towardselectronic methods has been slower than expected. Despite the second quarteruplift, this continues to be the case overall for the six months to 30 September2007. However, costs have also been scaled in line with the development of themarket and consequently bottom line performance for the six months was in linewith market expectations. DataIntegrity and DataSolutions Combined revenue from the DataIntegrity and DataSolutions business units in thesix months to 30 September 2007 increased to £5.1 million (2006: £4.6 million)which is ahead of market expectations. Interim results The Group's Interim results are expected to be released on 27 November 2007. -Ends- GB Group plcRichard Law, Chief ExecutiveMona Navin-Mealey, Finance Director 01244 657333 Weber Shandwick Financial 020 7067 0700Richard HewsHannah Marwood Website www.gb.co.uk This information is provided by RNS The company news service from the London Stock Exchange