REG - CPPGroup Plc - Disposal of Mexican legacy business

CPPGroupAnnouncement

21/10/2022 07:01

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RNS Number : 6278D  CPPGroup Plc  21 October 2022

21 October 2022

CPPGroup Plc

("CPP Group", the "Group" or the "Company")

 

Disposal of Mexican legacy business

 

CPP Group (AIM: CPP), a provider of real-time assistance products and
resolution services which reduce disruptions to everyday life for millions of
customers across the world, announces that it has disposed of its operations
in Mexico.

The Group has completed the sale of its wholly-owned subsidiaries, Servicios
de Asistencia a Tarjehabientes CPP Mexico S de RL de CV and Profesionales en
Proteccion Individual S de RL de CV (collectively "CPP Mexico"), which
together comprise the Group's legacy business in Mexico, to Rafael Ortiz Moran
and Silvia Daniela Rodriguez Gaona (the "Buyers") for a nominal cash
consideration of $1 (Mexican Peso) (the "Disposal"). As part of the Disposal,
CPP Group has left cash balances of circa £280,000 in CPP Mexico to cover
initial working capital requirements and other committed liabilities. Rafael
Ortiz Moran is the Country Manager of CPP Mexico.

CPP Mexico was established to capitalise on the assumed demand for the Group's
legacy protection and assistance services in that market. However, after a
period of limited new business development and operating losses, CPP Mexico
was, in early 2021, placed into run-off. The natural decline in the book will
again see the business become unprofitable during 2023 and beyond.
Consequently, and in line with the Group's strategy, announced on 19 October
2022, to withdraw from its Legacy Businesses, the Board believed that an exit
from the Mexican market was in the best interests of CPP Group.

Following a review of its options in the region, the Board concluded that a
sale of the business to the Buyers, rather than a closure, was the least
costly option for CPP Group and the best outcome for the Group.

For the 2021 financial year, CPP Mexico contributed EBITDA of £0.1 million to
the Groups overall EBITDA from continuing operations of £7.5 million and
recorded a loss before tax of £0.3 million. The impact of the Disposal will,
therefore, not be material to the Group. As at 31 December 2021, CPP Mexico
had net liabilities of £2.6 million.

As Rafael Ortiz Moran is the Country Manager of CPP Mexico, the Disposal
constitutes a related party transaction pursuant to AIM Rule 13. The Directors
consider, having consulted with the Company's nominated adviser, Liberum
Capital Limited, that the terms of the Disposal are fair and reasonable
insofar as the Company's shareholders are concerned.

Simon Pyper, CEO of CPP Group, commented:

"The disposal of our Mexican business is consistent with the Group's recently
announced strategy to withdraw from its legacy businesses and migrate CPP to
an InsurTech business, one with a clear purpose and simplified operating
model."

 

Enquiries:

 CPPGroup Plc
 Simon Pyper, Chief Executive Officer     Tel: via Alma PR

 David Bowling, Chief Financial Officer

 Liberum Capital Limited
 (Nominated Adviser and Sole Broker)      Tel: +44 (0)20 3100 2000
 Richard Lindley
 Lauren Kettle

 Alma PR
 (Financial PR Adviser)                   Tel: +44 (0)20 3405 0205
 Josh Royston
 David Ison
 Kieran Breheny

 

About CPP Group:

CPP Group is a technology-driven assistance company that creates embedded and
ancillary real-time assistance products and resolution services that reduce
disruption to everyday life for millions of people across the world, at the
time and place they are needed, CPP Group is listed on AIM, operated by the
London Stock Exchange.

 

For more information on CPP Group visit https://international.cppgroup.com/
(https://international.cppgroup.com/)

 

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

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