…while its data-gathering namesake soars SIXTEEN fold
WITHIN hours of last week’s grotesque terrorist attack in Manchester, security forces were focusing on two key questions. Who did it and were they acting alone?
Answers began to emerge with rapid speed, quite probably with the help of a data specialist also known as GBG.
Having spent years amassing data on individuals in this country and around the world,
GB Group specialises in finding out who people really are, where they live and if they can be trusted.
The company’s technology is used by 70 per cent of British police forces, with the rest using alternative services. But customers also include banks, insurers, retailers, gambling firms and Government departments, including Revenue & Customs.
Supermarket Waitrose uses GBG to help its vans deliver goods to the right places. Comparison website Moneysupermarket uses it to help customers switch energy providers faster. And the Football Association relies on it to verify that coaches are bona fide, with no dubious past history.
Midas first recommended GBG at 23p in 2009 and again at 92¼ in 2013, since when the company has gone from strength to strength.
The shares, now 397p, are 16 times higher than the original tip, results on June 6 are likely to be upbeat and new chief executive Chris Clarke is extremely optimistic.
The stock may not rise at the same pace as in recent years, but there is little doubt that this company is a smart operator in a growing market, so the long-term outlook is robust. The firm initially focused on the UK, but recently retired chief executive Richard Law realised that, in a digitally connected world, businesses need access to international data.
That decision proved to be absolutely right and GBG now has data in almost 200 countries, enabling it to work with multinational companies in sectors such as financial services and online gambling.
Historically, GBG has focused more on big business than smaller companies, but last month, it bought PCA (originally called Postcode Anywhere), which helps consumers to fill out boring forms online as quickly as possible, when they are buying goods and need to give information such as where they live.
Customers include online fashion retailer Asos and Sports Direct – clients since they were smaller entities – and GBG is hoping that the acquisition will provide access to a new customer base that it can sell more services to, while also selling PCA technology to existing customers.
Brokers responded positively to the PCA deal, marking up profit forecasts for 2018 and beyond. Profits for the year to March 31, 2017 are expected to rise 24 per cent to £16.4million, hitting £22million-plus next year.
Dividends have risen steadily over the past few years, even as GBG has invested in growth – a 19 per cent rise to 2.5p is expected this year, going up to at least 2.9p in 2018.
Midas verdict: GBG shares have risen fast but the firm is making progress and the stock should continue to perform. Clarke only took over as chief executive in April and is determined to expand the business.
Existing investors should hold. New ones with a longterm horizon could also snap up a few shares.