A RETURN TO CREDIT
Boost for CPPGroup as it moves back into growth after five years
A CRACKDOWN on gambling ordered by Turkey’s authoritarian president was partly to blame for a breakdown in takeover talks between GVC and high street bookmaker Ladbrokes Coral, it has emerged.
It is understood GVC’s Turkish operations – which the group acquired as part of its takeover of Sportingbet in 2013 – became a sticking point for Ladbrokes Coral shareholders as the two firms discussed a potential deal.
The online firm’s Turkish exposure was seen as a big investor risk following President Recep Tayyip Erdogan’s clampdown on illegal gaming, which may extend to increased internet monitoring, restrictions on payment services and a ban on gambling advertising.
The business community has become increasingly wary of Mr Erdogan’s increasingly hardline rule, which has seen foreign investors pull capital from the troubled Eurasian country. CREDIT CARD insurance firm CPPGroup has returned to growth for the first time in five years, boosted by strong growth in international sales.
The York-based firm said international revenues rose 52 per cent to £30.3m, which compensated for a reduction in the UK renewal book.
Group revenue rose 18 per cent to £41.8m in the six months to June 30, representing the first period of growth in over five years.
CPP said the UK renewal book is in managed decline. Revenues £11.4m.
The group’s CEO Jason Walsh said: “I am pleased with the performance of the business during the first half of this year, which has seen a return to revenue growth for the first time in five years.
“This was the result of growth in a number of our key international markets, but particularly India, where our consumer-led products and business partner relationships have gone from strength to strength.“
He said the group has simplified its operating structure by devolving greater responsibility to country leaders. fell 26 per cent to
“We are continuing to deliver on our strategic plan and as we enter the second half of the year, we expect to continue this revenue growth momentum and remain confident with the outlook for the full year,” he added.
Reported operating profit rose 2 per cent to £2.7m. However, underlying operating profit fell 42 per cent to £2.1m with the growth from an increasing international customer base not yet covering the decline in the higher margin UK renewal book.
The group expects to see continued significant growth in revenues in its international business, led by India where it also expects the percentage margin to materially increase as higher margin products enter the mix.
CPP said it has made major progress during the first half of the year in freeing up the necessary capital to take the group into the next stage of its strategy.
In May, it received approval from the Prudential Regulation Authority to lift the non-trading related restrictions for Homecare Insurance Limited (HIL). The lifting of these restrictions allows the group to develop a structured run-off plan for HIL with the regulator, which will release further capital for investment in its targeted international growth opportunities.
In June, the group completed the sale and partial leaseback of its head office in York. The sale proceeds of £5.3m have increased the cash funds available to the group to reinvest into the business.
This funding will be used to invest in the group’s rapidly expanding international operations, particularly in India, China and Turkey, as well as in other more recent investments.