GB Group reports results in line with expectations

11th Jun 2024 16:59

(Sharecast News) - Identity and location software specialist GB Group reported a set of results that aligned with its April trading update on Tuesday.

The AIM-traded firm said that, despite a 0.5% decline in reported revenue to £277.3m, it experienced a 2.7% growth on a constant currency basis.

Notably, the growth rate accelerated to 5.0% in the final quarter, driven by improved performance in the Identity segment across the Americas and EMEA regions.

GBG said it was focussed on simplification and cost-effectiveness, achieving £10m in annualised savings with an in-year benefit of £8.8m.

Adjusted operating profit rose 8% to £61.4m, excluding net foreign exchange gains.

However, the company reported an operating loss of £41.4m due to a £54.7m exceptional non-cash goodwill impairment charge in the first half of the year.

The group said its strong cash conversion rate of 90.6%, up from 67.3% in the 2023 financial year, facilitated a reduction in net debt to £80.9m, from £105.9m at the end of the prior year.

Reflecting confidence in its financial health, the board recommended a final dividend of 4.20p per share, a 5% increase from the previous year.

Looking ahead, GBG reiterated its positive 2025 outlook.

It said the new financial year had started in line with expectations, with sustained momentum in Identity and Location segments from the final quarter of 2024.

The company anticipated mid-single-digit revenue growth on a constant currency basis, which was expected to drive high single-digit growth in adjusted operating profit due to operational efficiency gains achieved in the 2024 financial year.

"This is my first set of results since taking the role of chief executive and I am pleased to report a more positive trading momentum," said chief executive officer Dev Dhiman.

"My first few months have focused on our teams, customers and business partners across GBG.

"This has reinforced my confidence in our competitive differentiation and our market opportunity. I believe we have opportunities to build on our momentum and capitalise on the strong and attractive structural growth drivers in the market."

At the close on Tuesday, shares in GB Group were down 4.1% at 331.8p.

Reporting by Josh White for Sharecast.com.