REG - CPPGroup Plc - FULL YEAR RESULTS FOR YEAR ENDED 31 DECEMBER 2024
25/03/2025 07:15
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RNS Number : 9639B CPPGroup Plc 25 March 2025
CPPGroup Plc
("CPP Group"; "the Group"; or "the Company")
FULL YEAR RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
CPP Group (AIM: CPP), provider of real-time, digitally delivered assistance
products which reduce disruptions to everyday life for millions of people
across the world is pleased to announce its full year results for the 12
months ended 31 December 2024.
Financial Highlights:
· Group revenue from continuing operations of £156.4 million (2023
restated: £173.4 million).
· EBITDA from continuing operations at £1.4 million (2023
restated: £1.3 million).
· Core business revenues(4) of £155.1 million (2023 restated:
£166.5 million).
· EBITDA from Core business(4) at £1.8 million (2023 restated:
£0.5 million).
· Loss before tax from continuing operations of £2.7 million (2023
restated: £5.7 million loss).
· Cash balance of £9.7 million at 31 December 2024 (31 December
2023: £19.0 million).
Operational Highlights:
· Group focused on three Core businesses (Blink Parametric
("Blink"); CPP India, and CPP Turkey).
· Core business performing well.
o Blink added 11 new clients and increased Annualised Recurring Revenues
("ARR") by +62%.
o CPP India and CPP Turkey, despite currency headwinds, performed well.
o Central costs, before recharges to business units, decreased to £6.9
million (2023: £10.1 million).
· Change Management Programme ("CMP") completed.
· Exit from legacy businesses complete, with UK back book in active
run-off.
· Divestment of Globiva Services Private Ltd ("Globiva") for £3.8
million completed in September 2024.
· Disposal of minority interest in KYND Limited ("KYND") for £2.6
million completed in February 2024.
Simon Pyper, CEO of CPP Group, commented:
"The past year has been pivotal for the Group, as we completed our Change
Management Programme, exited from non-core businesses, and continued our
investment in and development of Blink. We ended the year as the business we
set out to be in October 2022 - a digitally focused business led by Blink and
supported by CPP India and CPP Turkey.
We have also pursued initiatives to enhance our offering, strengthen our
business partnerships and streamline our operations. While not all of our
actions will deliver immediate results, all are designed to increase long-term
shareholder value, be it growth in Blink, new products in CPP Turkey, or
renewed contractual arrangements between CPP India and its largest business
partner Bajaj Finance Limited.
With Blink having increased its ARR by 62% to £1.6 million and added 11 new
clients in 2024, we remain confident, with some further investment, the
business will continue to make strong progress. We remain focused on
converting Blink's exciting pipeline into commercial contracts, extending
contracts with existing partners into additional geographies, and with our
Insurance Partners, finding additional audiences, such as banks, airlines and
credit card providers for our Travel Disruption and Cyber Solution services."
Financial and non-financial highlights - continuing operations
£ millions 31 December 2024 31 December 2023 (Restated(1)) Change
Financial highlights:
Group
Revenue 156.4 173.4 (10)%
EBITDA(2) 1.4 1.3 7%
Operating loss
- Reported (2.8) (6.1) 54%
- Underlying(3) (1.0) (0.1) (938)%
(Loss)/profit before tax
- Reported (2.7) (5.7) 52%
- Underlying(3) (0.9) 0.3 (426)%
Loss for the year
- Reported (4.7) (7.8) 40%
- Underlying(3) (2.9) (1.9) (50)%
Basic loss per share (pence)
- Reported (51.90) (88.67) 42%
- Underlying(3) (32.07) (21.70) (48)%
Cash and cash equivalents 9.7 19.0 (49)%
Segmental
Revenue
- Core(4) 155.1 166.5 (7)%
- Legacy(5) 1.3 6.9 (81)%
EBITDA(2)
- Core(4) 1.8 0.5 235%
- Legacy(5) (0.4) 0.8 (146)%
1. Restated to reflect Globiva, Italy and Spain as discontinued
operations (note 2).
2. EBITDA represents earnings before interest, taxation, depreciation,
amortisation, and exceptional items.
3. Underlying operating profit and underlying profit before tax
excludes exceptional items of £1.8 million (2023 restated: £6.0 million).
The tax effect of the exceptional items is £nil (2023 restated: £0.1
million). Further detail of exceptional items is provided in note 5 of the
condensed consolidated financial statements.
4. Core business revenue and EBITDA from CPP India, CPP Turkey, Blink
and central costs (EBITDA only).
5. Legacy reflects the UK business which is in run-off and is
principally Card Protection policies.
Enquiries:
CPPGroup Plc
Simon Pyper, Chief Executive Officer
Via Alma Strategic Communications
David Bowling, Chief Financial Officer
Panmure Liberum
(Nominated Adviser and Sole Broker)
Tel: +44 (0)20 3100
2000
Stephen Jones
Atholl Tweedie
Will King
Alma Strategic
Communications
CPP@almastrategic.com (mailto:CPP@almastrategic.com)
Josh Royston
Tel: +44 (0)20 3405 0205
Andrew Jaques
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 visit https://corporate.cppgroup.com/
(https://corporate.cppgroup.com/)
Chairman's Statement
The last year has witnessed the conclusion of the CMP and the divestment of
non-core assets, such as the shareholding in Globiva in India. This leaves the
Group with its businesses in India, Turkey and Blink, on which I comment
below, and the residual UK back book, which is now in run-off.
Operationally our business is now streamlined and efficient, with each of the
Group's Core businesses having their own independent management teams,
operational processes and IT infrastructure. The role of the centre has also
been re-focused, with annual central costs, before recharges to business
units, reducing from over £10 million in 2023 to £7 million for 2024 with
further reductions expected in 2025 to below £5 million.
A great deal has been achieved in the last two years and I would like to
acknowledge the role of the management team, from top to bottom, ably led by
Simon Pyper, in performing the necessary surgery to position your company for
a new period of growth, which will be led by Blink.
Strategy for growth, and our focus on Blink
Blink's growth strategy is simple: provide innovative parametric solutions to
a growing roster of large global and regional insurance companies who, in
partnership, deploy its solutions across multiple geographies, multiple
platforms, and multiple customer audiences (consumers, banks, airlines).
There is additional information on Blink later in this report, but it is
worthy of note that, in the last year, Blink has:
· moved beyond "proof of concept" to become a business which, with
some further investment, is well placed to exploit the global and regional
opportunities for its Travel Disruption and Cyber Solution services;
· increased its customer base, providing travel disruption and
cyber solutions to 28 partners (2023: 17) across 22 geographies, with its
digitally delivered solution included in over 1.5 million customer policies;
and
· continued to deliver real and measurable benefits for its
business partners, which is reflected in Blink's 100% renewal rate from
existing partners, and growth in total ARR of 62% to £1.6 million (2023:
£1.0 million).
CPP India and CPP Turkey
Our Indian and Turkish businesses performed in line with expectations set at
the start of the financial year and, despite currency headwinds, both of them
contributed positively to the Group's overall results and delivered improved
year-on-year operational metrics. The solid performance of the Turkish
business was impressive in the light of the continuing unfavourable
macroeconomic environment in Turkey, which effectively precludes further
sterling investment and which inevitably depresses the sterling value of the
company.
CPP India, in contrast, benefits from the growth of the Indian economy, but it
is heavily dependent on a single, long-standing contractual relationship with
Bajaj, from which the vast majority of its revenues derive. Nevertheless, both
it and our Turkish business generate surplus funds, which have facilitated
further investment in Blink in the past year.
Financial Results
The Group's trading performance for the year was robust notwithstanding
adverse currency headwinds, the partial transfer of Bajaj's LivCare business
to locally based (Indian) insurers and the continued, but wholly anticipated,
losses in Blink. Revenues and EBITDA from continuing operations (Blink, CPP
India, CPP Turkey and the UK Legacy business which is in run-off) were in line
with expectations with revenues at £156.4 million (2023: £173.4 million) and
EBITDA at £1.4 million (2023 restated: £1.3 million).
Board Changes
In November of last year, Alice Glenister was invited to join the Board as a
Non-Executive Director, and Eleanor Sykes our Group Chief Operating Officer,
became an Executive Director. Their appointments reflect the increasing focus
of the Group on the development of Blink, in which Eleanor has been playing an
important role. Alice brings to the Board extensive knowledge of the rapid
developments taking place in the wider world of parametric insurance and we
will benefit from her sector knowledge and experience.
Outlook
Whilst it might seem counter-intuitive to focus on Blink as the core driver of
growth for the Group, its development in the last year with limited resources
gives us cause for considerable optimism. Our Indian and Turkish businesses
have both made a solid contribution, but their ability to deliver long-term
value to shareholders is, to some degree, determined by local economic and
contractual shackles dating from several years ago.
The Group's ability to invest further in Blink, or for that matter any of its
businesses, is inevitably constrained by its limited resources. The UK back
book, which previously provided surplus capital for investment, is now in
run-off and until such time as we can wind up its activities entirely, will be
loss making and cashflow negative. Consequently, we must be both focused and
diligent in our capital allocation and early indications suggest, that Blink
will over the medium to long-term provide the best return on capital, and, as
importantly, provide the best long-term outcomes for shareholders.
David Morrison
Non-Executive Chairman
24 March 2025
Chief Executive Officer Statement
Introduction
The past year has been pivotal for the Group, as we completed our CMP, exited
from non-core business such as Globiva, and continued our investment and
development of Blink. We ended the year as the business we set out to be in
October 2022, a digitally focused business led by Blink and supported by CPP
India and CPP Turkey.
But why our focus on Blink? In simple terms, Blink represents the best
opportunity for the Group to deliver long-term value growth, as valuation
multiples for businesses such as Blink, are significantly ahead of those for
traditional insurers and sister businesses such as CPP India and Turkey. In
addition, Blink unlike its sister businesses, operates in two global markets
(Travel Disruption & Cyber Security) both of which are growing, and both
of which are absent either a dominant player or reliance on a single key
partner. If we are successful in our endeavours, Blink will not need to
achieve a significant level of market share to become a highly profitable,
highly cash generative, and highly valued business.
Our confidence is not unfounded, over the past year Blink has moved beyond
"proof of concept" with its products and services now providing clear and
measurable benefits to a growing number of business partners (increased
revenues and retention rates) and end consumers.
We start the new financial year with optimism, we have made good progress, but
there remains much to do before Blink reaches its full potential.
Financial Performance
Blink performed well during the year, increasing ARR by 62% to £1.6 million,
adding 11 new clients, and achieving a 100% renewal rate of its existing
contract base. CPP India and CPP Turkey, despite currency headwinds and the
partial transfer of Bajaj's LivCare business to locally based (Indian)
insurers, both delivered a good set of trading results for 2024.
Three key factors which impacted our 2024 results:
1. Blink investment: Blink is the Group's only global product,
currently focused on delivering parametric solutions to the worldwide travel
insurance (flight delay and lost luggage) and consumer cyber security markets.
It forms a key part of the Group's strategy and needs sustained investment
over the medium term if it is to realise its full potential. During the year
Blink's headcount increased by ten to 36 with total costs increasing by 39% to
£3.5 million. Blink reported an EBITDA loss of £2.7 million compared to the
£1.8 million loss in the prior year.
2. CPP India: the transfer by Bajaj of part of the LivCare portfolio
to locally based insurers reduced full year revenues by circa £16.0 million,
which adversely impacted EBITDA by circa £0.5 million.
3. Currency headwinds: the Group derives 98% of its revenues in Indian
rupees and Turkish lira which have seen a further weakening against sterling,
the Group's reporting currency. On a constant currency basis, the Group would
have reported an additional £0.4 million of EBITDA.
Of the three key factors which subdued EBITDA growth, only the increased
investment in Blink was known and forecast, whilst the loss of part of the
LivCare book and the currency headwinds, particularly in India were unknown.
The operating loss of £2.8 million (2023 restated: £6.1 million loss)
includes depreciation charges of £2.4 million (2023 restated: £1.4 million)
and exceptional items of £1.8 million (2023 restated: £6.0 million). The
majority of the 2024 exceptional charge relates to costs associated with the
CMP.
Key Performance Metrics:
£ millions REVENUE EBITDA(1)
2024 2023(2) CHANGE 2024 2023(2) CHANGE
CPP India 145.4 161.0 (10)% 6.6 5.8 13%
CPP Turkey 8.6 4.7 84% 1.4 1.2 22%
Blink 1.1 0.8 31% (2.7) (1.8) (51)%
Core business units 155.1 166.5 (7)% 5.3 5.2 2%
Central Functions - - n/a (3.5) (4.7) 24%
Core total 155.1 166.5 (7)% 1.8 0.5 235%
Legacy(3) 1.3 6.9 (81)% (0.4) 0.8 (146)%
Group total 156.4 173.4 (10)% 1.4 1.3 7%
1. EBITDA represents earnings before interest, taxation,
depreciation, amortisation and exceptional items.
2. Restated to reflect Globiva, Italy and Spain as discontinued
operations.
3. Legacy comprises the UK which is in active run-off.
Business Unit Performance
Blink: EBITDA loss of £2.7 million (2023: £1.8 million loss)
Blink provides real-time, data driven, white-label assistance solutions that
are designed to be embedded into insurance provider products, which on an
"event" being triggered, provides immediate, digitally delivered, support to
their (the insurers') customers.
The Group has made significant progress scaling Blink throughout 2024, and the
business is now in a substantially stronger position against this time last
year, enabled by focused investments in technology and people during the
period.
Working with a number of the world's leading global and regional insurers,
Blink now operates in 22 geographies (2023: 12) with 28 partners (2023: 17).
There is a healthy pipeline of opportunity ahead, and our enhancements in the
year provides a strong foundation for further growth with new and existing
customers.
Blink's current product set falls into two broad categories, Travel Disruption
and Cyber Security.
Travel Disruption
The global travel disruption insurance market (travel and lost luggage
insurance premiums) is estimated at $25 billion for 2025, growing to $62
billion in 2028. Blink's strategy is to provide innovative parametric
solutions for this global market by growing its roster of large global and
regional insurance companies who, in partnership, deploy Blink's solutions
across multiple geographies, multiple platforms and multiple customer
audiences (consumers, banks, airlines etc).
Blink's products and services provide clear and measurable benefits for our
partners and their customers (the end consumer), with a recent case study from
one partner suggesting that the inclusion of a Blink solution into the
insurer's core offer, increases policy sales (new and renewals) and price
points and reduces claims processing times and costs.
Key contract highlights for 2024:
· Partnership with AXA Partners (part of the AXA Group and one of
the largest travel insurers) to provide Blink's flight delay solution,
initially in nine geographies, to Hong Kong Express (a leading airline in
Asia)
· Contract extensions with Zurich in Asia Pacific and MAWDY (part
of the Mapfre Group) in Europe and Africa
· 100% renewal rate for existing partner base
Cyber Security
The global consumer cyber security market (identity theft and fraud
prevention) is estimated at $14 billion for 2025, growing to $40 billion in
2028. Blink's strategy is to partner with large US and non-US cyber security
and credit reporting businesses who can embed Blink solutions into their core
product across multiple platforms and geographies.
Blink's "CyberScan" solution, provides our partners with an innovative
technology platform, which is adaptable and deployable globally, which helps
improve the digital lives of their end customer. We expect that once our
products and services are embedded within our partner's core proposition, they
will secure real and measurable economic benefits from having done so, similar
to our travel model.
Key contract highlights for 2024:
· In December, Blink signed a global framework agreement with a
major US-based cyber security and credit reporting business, for the inclusion
of its dark web monitoring solution, "Blink CyberScan", into their suite of
cyber services. The agreement will initially see Blink's services being
offered into four of our partner's key European markets, with the agreement
allowing for further roll-out across their global network.
Blink has in 2024 moved well beyond "proof of concept" and is, with some
additional investment, well placed to deliver long-term growth and shareholder
value.
CPP India: EBITDA of £6.6 million (2023: £5.8 million). EBITDA margin 4.6%
(2023: 3.6%)
CPP India works closely with its business partners to drive value by growing
customer loyalty through the design and delivery of simple and innovative
products, which fit seamlessly into the everyday life of consumers. The
overall outcome for the year, given the partial transfer of the Bajaj LivCare
business (to locally based insurers) and currency headwinds, is satisfactory.
The transfer of part of the LivCare portfolio reduced full year revenues by
circa £16.0 million, which adversely impacted EBITDA by circa £0.5 million.
On an annualised basis, the impact to revenue and EBITDA is circa £19.0
million and £0.6 million respectively. However, due to the benefits of the
CMP this shortfall in EBITDA was more than offset in 2024 by lower operational
costs.
Administrative expenses reduced by 6% following the full deployment in Q2 of
the new cloud-based IT platform which along with the partial transfer of the
LivCare business, which is a low margin product, led to a 1.0 percentage point
improvement to EBITDA margin.
During 2024, Bajaj, which accounts for circa 85% of CPP India revenues
extended their contract to 31 December 2027.
CPP Turkey: EBITDA of £1.4 million (2023: £1.2 million), EBITDA margin 16.3%
(2023: 24.6%)
CPP Turkey performed well during the year with EBITDA increasing by 22% (66%
on a constant currency basis). That the business has been able to deliver real
growth in difficult economic circumstances (high inflation and currency
volatility) is a clear indication of the quality of our management team and
business partner relationships.
During the year, CPP Turkey has extended and improved its Health service
contract with Turkey Insurance which has led to a £2.3 million year-on-year
revenue increase.
Legacy business: EBITDA loss of £0.4 million (2023 restated: £0.8 million
profit)
All of the Group's legacy businesses, save for the UK renewal book, which is
now in active run-off, have either been closed or disposed of. As the UK
business entered run-off at the start of 2024, there have been no renewals in
the year which led to a revenue decline of 81% and due to a relatively fixed
cost base to service the remaining policies, the UK shifted to an EBITDA loss
of £0.4 million (2023: £0.8 million profit). The UK run-off will see the
final policies expire on 31 December 2026.
Central costs: £3.5 million (2023 restated: £4.7 million)
Central overheads before appropriate recharge to business units are £6.9
million (2023: £10.1 million) with the reduction being led by the benefits of
the CMP, with lower IT costs following decommissioning of the legacy platform
in May 2024 and right-sizing of the central headcount required to manage a
simplified Group. The UK-based central IT cost reduced by 40% to £2.0 million
(2023: £3.3 million) and will reduce further in 2025 as the full year benefit
of the IT reductions come through.
Although the gross cost base has reduced by £3.2 million year-on-year, net of
recharges, our reported central costs have reduced by £1.2 million (24%). The
lower net level is due to reduced recharges to India following the full
deployment of its new IT platform, which is managed locally.
Operational Highlights
With the completion of the CMP each of the Group's business units and the
central functions have their own, independent IT platforms. The independent
platforms allow each business unit to adapt their processes and solutions to
the changing needs of their business partners, more quickly and at a lower
cost.
Blink
Blink, with some further investment, will look to increase and improve
operational capacity and efficiency in three phases:
Investment area Stage 1 - Driving sales growth Stage 2 - Embedding growth Stage 3 - High renewal business
Sales & Account Management · Growing partner and revenue opportunity through investment into · Additional sales and customer success resource brought into key · Scaling existing partners and managing growth sustainably.
sales and customer success roles. markets to support pipeline and partners as they launch.
· Due to increased scaling of key partners an additional account
· Targeting largest global travel insurance markets with resources · Introduction of cyber product account team to drive sales. team will be introduced.
deployed into USA and APAC.
Technology & Operations · Reorganisation of product and tech teams under a pod model to · Pod structure becomes fully operational with teams fully · Specialist skills brought in to manage a larger-scale
allow for dedicated teams to be created to manage new and existing products, recruited for. business-data management, IT security and database management and
and increase capacity, speed and quality of execution.
optimisation.
· Technology and operational infrastructure brought into the
· Recruitment of additional resource under the pod model. business to handle growth from stage 1.
Product · New product development team recruited to create new product · First products launched outside of travel and cyber categories. · Products from the second new product category launch in market.
lines outside of the travel and cyber categories.
· Additional travel & cyber solutions developed within pods and · Four product categories are live with multiple products within
launched. each category in market.
· Additional product development team recruited to create new
products outside of travel and cyber categories and Stage 1 Focus area.
The investment programme is over a three-to-four-year period and is designed
to support Blink's long-term growth ambitions.
CPP India
Post implementation of the new IT platform for India, the business is in
maintenance mode, adjusting its processes and operations at pace and at a
lower cost for the changing needs and requirements of its business partners.
CPP Turkey
Post implementation of the new IT platform for Turkey, the business is in
maintenance mode and there are no immediate plans for further near-term
development.
Our colleagues
As we reflect on the past year, it is clear that none of our achievements
would have been possible without the dedication, hard work, and talent of our
employees. Each one of them has played a pivotal role in helping the Group
navigate challenges, seize opportunities, and deliver on our mission to
provide innovative assistance solutions to customers worldwide.
Their resilience, adaptability, and commitment to excellence has been
instrumental in driving the growth and transformation of the business. Whether
contributing to groundbreaking innovations, building strong relationships with
our partners, or delivering exceptional service to our customers, their
efforts have made all the difference.
Outlook
The outlook for the Group is positive and focused on growth. Growth in the
number of business partners we work with, growth in the number of geographies
we operate in, and supported by our business partners, growth in audience
(airlines, banks and credit card companies et al) for our innovative,
digitally delivered solutions.
Simon Pyper
Chief Executive Officer
24 March 2025
Chief Financial Officer Statement
Overview
The Group made sound progress in the year as it transforms to a digitally
focused business led by Blink. The CMP was completed earlier than planned and
non-core operations have been sold or closed. The Core business has made
important strides as the foundations have been built for future acceleration,
with the new Indian IT platform fully deployed, central costs reducing through
right-sizing as the business simplifies and the decommissioning of expensive
legacy IT systems and, importantly, Blink continues to grow.
The withdrawal from the Legacy UK business and ongoing investment to scale
Blink to its potential will see cash continue to reduce in the medium-term, a
position which can be managed through the Group's existing resources.
Group revenue decreased by 10% (6% constant currency) to £156.4 million (2023
restated: £173.4 million). The reduction in revenue followed the decision by
Bajaj to transfer a portion of the LivCare book of business to locally based
insurers. The impact of this loss was reduced by strong growth in Mobile sales
in India and an excellent performance in Turkey. EBITDA was broadly flat at
£1.4 million (2023 restated: £1.3 million) with a substantial reduction in
central costs, as the UK-based legacy IT platform was decommissioned, being
offset by the expected reduction in the Legacy UK business as it entered
run-off and continued investment into Blink.
Continuing Operations 2024 2023 (Restated(1))
Revenue (£ millions) 156.4 173.4
Gross profit (£ millions) 20.8 24.0
EBITDA (£ millions)(2) 1.4 1.3
Operating loss (£ millions) (2.8) (6.1)
Loss before tax (£ millions) (2.7) (5.7)
Taxation (£ millions) (1.9) (2.2)
Loss for the year (£ millions) (4.7) (7.8)
Basic loss per share (pence) (51.90) (88.67)
Cash (used in)/generated by operations (£ millions) (6.7) 5.5
1. Restated to reflect Globiva, Italy and Spain as discontinued
operations.
2. Excluding depreciation, amortisation and exceptional items.
Gross profit reduced to £20.8 million (2023 restated: £24.0 million) as the
UK Legacy business entered run-off. However, Core gross profit increased by 6%
to £19.6 million (2023 restated: £18.6 million) at an improved margin of
12.6% (2023 restated: 11.1%) reflecting the mix benefit of our growing Turkish
and Blink operations, along with a higher margin in India following the
reduction in contribution from LivCare (CPP's lowest margin product). The
Group's gross profit margin is expected to continue its improvement as Turkey
and Blink progress.
EBITDA was broadly flat at £1.4 million (2023 restated: £1.3 million),
however on a constant currency basis it would have been a further £0.4
million higher, as the Indian rupee and Turkish lira have continued to weaken
against Sterling. As expected, following the decommissioning of Legacy IT
platforms in the first half of the year and the wind-down of the Legacy UK
business, administrative expenses, before depreciation and exceptional items,
have reduced by 15%. As part of this, central costs before recharges, have
reduced by 32% to £6.9 million (2023: £10.1 million) which has been partly
offset by increased IT costs in India to run the new Indian IT platform and
operational scaling in Blink. The Group's central costs will reduce further in
2025 as the full year benefit of restructuring activities and decommissioning
of the legacy IT system work through.
Depreciation and amortisation charges have increased to £2.4 million (2023
restated: £1.4 million). The increase reflects the full deployment of the
Group's new technology platform in India.
Exceptional items
The CMP has been a major undertaking for the Group and led to substantial
exceptional costs of £6.0 million last year. There have been further
exceptional costs in 2024 of £1.8 million as the CMP reached its conclusion.
These charges comprised £1.2 million restructuring costs in the UK and
Centre; and £0.6 million Deferred Bonus Plan charges; a share-based retention
measure.
The depreciation and exceptional costs, result in an operating loss of £2.8
million (2023 restated: £6.1 million loss). Consequently, the Group is
reporting a loss before tax of £2.7 million (2023 restated: £5.7 million
loss), and a loss after tax of £4.7 million (2023 restated: £7.8 million
loss).
Tax
The tax charge for the year is £1.9 million (2023 restated: £2.2 million),
which is an effective tax rate (ETR) of negative 70% (2023 restated: negative
38%). The tax charge includes £1.7 million (2023 restated: £1.8 million)
relating to India and £0.2 million (2023: £0.4 million) relating to Turkey.
The Group continues to generate losses through Blink and its UK-based central
costs which more than offset the taxable profits generated in India and
Turkey. The Group cannot currently recognise deferred tax assets against its
loss-making entities which leads to the negative ETR as tax is charged in
India and Turkey.
The high and volatile ETR is expected to decrease in the medium- to long-term
as central costs reduce and Blink moves towards profitability.
Discontinued operations
In the year, the Group completed the disposal of its Legacy Italian business
and its 51% interest in Globiva. These businesses, along with Spain have been
classified as discontinued in the current year. The total profit after tax
from discontinued operations of £1.1 million comprises £0.5 million profit
on Italy, £1.3 million profit on Spain and £0.7 million loss on Globiva.
2024 2023
£'m £'m
Revenue 11.5 19.6
EBITDA 1.2 3.4
Operating result/(loss)(1) - (0.3)
Profit/(loss) after tax(1) 1.2 (0.3)
Loss on disposal (0.1) -
Profit/(loss) for the year 1.1 (0.3)
Net assets held for sale - 2.6
1. Stated before the impacts of loss on disposal.
Further details of the discontinued operations by business are included in
note 8.
In addition to the discontinued operations, the Group also completed the
disposal of its equity investment in KYND for a cash consideration of £2.6
million.
Net Assets
The Group's balance sheet has moved to a marginal net liabilities position of
£nil (2023: £7.5 million net assets) reflecting the losses for the year and
the derecognition of the non-controlling interest following the disposal of
Globiva.
Dividend
Due to the required investment in Blink the dividend remains suspended until
further notice. If circumstances change, the Board will review and update
shareholders when appropriate to do so.
Foreign exchange
The general weakening against sterling of the Group's main trading currencies,
the Indian rupee and Turkish lira, has led to an adverse exchange rate
movement in the Group's results. The Indian rupee has depreciated by 4% (2023:
6%) whilst the Turkish lira has continued to weaken with a further 40%
reduction in 2023 (2023: 48% reduction).
The reported results compared to 2023 include the following adverse foreign
exchange movements: £7.2 million (2023 restated: £9.4 million) within
revenue; and £0.4 million (2023 restated: £0.5 million) at an EBITDA level.
Cash flow and net funds
2024 2023
£'m £'m
EBITDA 2.6 4.8
Exceptional items(1) (1.7) (7.2)
Non-cash items 0.1 0.1
Working capital movements(2) (7.7) 7.8
Cash (used in)/generated by operations (6.7) 5.5
Tax (3.0) (1.9)
Operating cash flow (9.7) 3.6
Capital expenditure (including intangibles) (2.1) (3.9)
Lease repayments (1.0) (1.4)
Disposal of discontinued operations & equity investment 3.5 -
Net finance revenues 0.4 0.7
Costs of refinancing the bank facility - (0.1)
Purchase of own shares (0.2) -
Net movement in cash(3) (9.1) (1.1)
Net funds(4) 8.7 15.3
1. Cash-based exceptional items are restructuring and closure
costs. The prior year included onerous contracts. The other exceptional items
in the year were non-cash.
2. Working capital out flow includes £2.4 million relating to
payment of exceptional items. There are £3.6 million remaining exceptional
items unpaid (2023: £5.9 million).
3. Excluding the effect of exchange rates.
4. Net funds comprise cash and cash equivalents of £9.7 million
(2023: £19.0 million) and a borrowing asset of £nil (2023: £0.1 million)
less lease liabilities of £1.0 million (2023: £3.8 million).
The net funds position has decreased to £8.7 million (2023: £15.3 million),
which includes cash of £9.7 million (2023: £19.0 million). Although the
Group's cash flow has benefitted from the disposal of Globiva, CPP Italy and
our investment in KYND, the Group had a net cash outflow for the year of £9.1
million (2023: £1.1 million) due to working capital payments and IT
development costs in India. In addition, there have been costs to run-off the
UK legacy book with cash collections ceasing in 2023, and redundancy costs
paid in Spain, to UK-based staff in the Centre, including the IT team, and the
UK Legacy business. The ongoing scaling of the Blink business to capitalise
on its market opportunities has required cash investment through the year. The
Group remains confident the investment in Blink will drive substantial returns
in the medium- to long-term.
The Group had cash balances of £9.7 million with cash generation coming from
the Group's profitable operations in India and Turkey. Consequently, whilst
cash is routinely repatriated to the UK, increasingly the Group's cash is held
in India. Elements of this cash were previously considered 'restricted',
however there is a mechanism available to the Group through which it can
access its surplus Indian cash in the UK which will reduce the Group's future
reliance on its £5.0 million revolving credit facility (RCF). The RCF was
undrawn at the balance sheet date.
David Bowling
Chief Financial Officer
24 March 2025
Consolidated income statement
For the year ended 31 December 2024
2024 2023 (restated*)
Core Legacy Total Core Legacy Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue 4 155,076 1,350 156,426 166,463 6,970 173,433
Cost of sales (135,488) (130) (135,618) (147,904) (1,499) (149,403)
Gross profit 19,588 1,220 20,808 18,559 5,471 24,030
Administrative expenses (21,773) (1,834) (23,607) (20,649) (9,458) (30,107)
Operating loss (2,185) (614) (2,799) (2,090) (3,987) (6,077)
Analysed as:
EBITDA 4 1,796 (368) 1,428 536 804 1,340
Depreciation and amortisation (2,434) (1) (2,435) (1,261) (176) (1,437)
Exceptional items 5 (1,547) (245) (1,792) (1,365) (4,615) (5,980)
Investment revenues 159 171 330 272 228 500
Finance costs (130) (147) (277) (109) (1) (110)
Loss before taxation (2,156) (590) (2,746) (1,927) (3,760) (5,687)
Taxation 6 (1,462) (466) (1,928) (2,049) (108) (2,157)
Loss for the year from continuing operations (3,618) (1,056) (4,674) (3,976) (3,868) (7,844)
Discontinued operations
Profit/(loss) for the year from discontinued operations 8 (723) 1,785 1,062 1,233 (1,488) (255)
(Loss)/profit for the year (4,341) 729 (3,612) (2,743) (5,356) (8,099)
Attributable to:
Equity holders of the Company (4,319) 729 (3,590) (3,299) (5,356) (8,655)
Non-controlling interests (22) - (22) 556 - 556
(4,341) 729 (3,612) (2,743) (5,356) (8,099)
Basic and diluted (loss)/earnings per share Core Total
pence
pence Legacy Total Core Legacy
pence pence pence pence
Continuing operations 7 (40.18) (11.72) (51.90) (44.95) (43.72) (88.67)
Discontinued operations 7 (7.78) 19.82 12.04 7.65 (16.82) (9.17)
(47.96) 8.10 (39.86) (37.30) (60.54) (97.84)
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
Consolidated statement of comprehensive income
For the year ended 31 December 2024
2024 2023
£'000 £'000
Loss for the year (3,612) (8,099)
Items that may be reclassified subsequently to profit or loss:
Fair value gain on equity investment - 610
Exchange differences on translation of foreign operations (425) (696)
Exchange differences reclassified on disposal or closure of foreign operations (1,626) 68
Other comprehensive expense for the year net of taxation (2,051) (18)
Total comprehensive expense for the year (5,663) (8,117)
Attributable to:
Equity holders of the Company (5,540) (8,571)
Non-controlling interests (123) 454
(5,663) (8,117)
Consolidated balance sheet
As at 31 December
2024
2024 2023
Note £'000 £'000
Non-current assets
Goodwill - 513
Other intangible assets 6,031 6,619
Property, plant and equipment 372 932
Right-of-use assets 1,062 3,122
Deferred tax assets 586 693
Contract assets 206 208
8,257 12,087
Current assets
Contract assets 5,567 6,716
Trade and other receivables 5,422 13,770
Cash and cash equivalents 9,650 19,001
20,639 39,487
Assets classified as held for sale - 2,631
20,639 42,118
Total assets 28,896 54,205
Current liabilities
Income tax liabilities (1,128) (1,004)
Trade and other payables (14,703) (25,696)
Provisions (1,211) (1,877)
Lease liabilities (277) (907)
Contract liabilities (9,436) (11,581)
(26,755) (41,065)
Net current (liabilities)/assets (6,116) 1,053
Non-current liabilities
Borrowings 66 105
Deferred tax liabilities (398) (646)
Provisions (574) (1,588)
Lease liabilities (751) (2,892)
Contract liabilities (510) (604)
(2,167) (5,625)
Total liabilities (28,922) (46,690)
Net (liabilities)/assets (26) 7,515
Equity
Share capital 9 24,574 24,257
Share premium account 45,225 45,225
Merger reserve (100,399) (100,399)
Translation reserve (3,301) (1,351)
ESOP reserve 18,735 18,334
Retained earnings 15,140 19,192
Equity attributable to equity holders of the Company (26) 5,258
Non-controlling interests - 2,257
Total equity (26) 7,515
Consolidated statement of changes in equity
For the year ended 31 December 2024
Share capital Share premium account Merger reserve Translation reserve ESOP reserve Retained earnings Total Non-controlling interests Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 24,256 45,225 (100,399) (825) 17,212 27,201 12,670 1,803 14,473
(Loss)/profit for the year - - - - - (8,655) (8,655) 556 (8,099)
Other comprehensive (expense)/income for the year - - - (526) - 610 84 (102) (18)
Total comprehensive (expense)/income for the year - - - (526) - (8,045) (8,571) 454 (8,117)
Equity-settled share-based payment charge - - - - 1,122 - 1,122 - 1,122
Exercise of share options 9 1 - - - - (1) - - -
Effects of hyperinflation - - - - - 37 37 - 37
At 31 December 2023 24,257 45,225 (100,399) (1,351) 18,334 19,192 5,258 2,257 7,515
Loss for the year - - - - - (3,590) (3,590) (22) (3,612)
Other comprehensive expense for the year - - - (1,950) - - (1,950) (101) (2,051)
Total comprehensive expense for the year - - - (1,950) - (3,590) (5,540) (123) (5,663)
Disposal of non-controlling interests - - - - - - - (2,134) (2,134)
Equity-settled share-based payment charge - - - - 649 - 649 - 649
Exercise of share options 9 317 - - - - (317) - - -
Purchase of own shares - - - - (248) - (248) - (248)
Effects of hyperinflation - - - - - (145) (145) - (145)
At 31 December 2024 24,574 45,225 (100,399) (3,301) 18,735 15,140 (26) - (26)
Consolidated cash flow statement
For the year ended 31 December 2024
2024 2023
Note £'000 £'000
Net cash (used in)/from operating activities 10 (9,738) 3,610
Investing activities
Interest received 447 749
Purchases of property, plant and equipment (270) (335)
Purchases of intangible assets (1,769) (3,551)
Sale of equity investment 2,651 -
Cash consideration in respect of sale of discontinued operations 4,237 -
Costs associated with disposal of discontinued operations (92) -
Cash disposed of with discontinued operations (3,275) -
Net cash from/(used in) investing activities 1,929 (3,137)
Financing activities
Costs of refinancing the bank facility - (128)
Repayment of the lease liabilities (966) (1,396)
Interest paid (77) (69)
Purchase of own shares (248) -
Net cash used in financing activities (1,291) (1,593)
Net decrease in cash and cash equivalents (9,100) (1,120)
Effect of foreign exchange rate changes (251) (863)
Cash and cash equivalents at 1 January 19,001 20,984
Cash and cash equivalents at 31 December 9,650 19,001
Notes to condensed financial statements
1. General information
While the financial information included in this annual results announcement
has been computed in accordance with the recognition and measurement criteria
in conformity with UK-adopted International Accounting Standards ('UK IAS')
and with those parts of the Companies Act 2006 applicable to companies
reporting under UK IAS, this announcement does not itself contain sufficient
information to comply with UK IAS. The Company will publish full financial
statements that comply with UK IAS in April 2025.
The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 31 December 2024 or 31
December 2023 but is derived from the 2024 financial statements. Statutory
financial statements for 2023 for the Company prepared under UK IAS have been
delivered to the Registrar of Companies and those for 2024 for the Company
will be delivered following the Company's Annual General Meeting. The Auditor,
PKF Littlejohn LLP, has reported on these financial statements; their report
was unqualified, did not draw attention to any matters by way of emphasis and
did not contain statements under s498 (2) or (3) of the Companies Act 2006.
These 2024 financial statements were approved by the Board of Directors on 24
March 2025.
2. Accounting policies
The same accounting policies, presentation and methods of computation are
followed in the condensed financial statements as were applied in the Group's
audited financial statements for the year ended 31 December 2023. The
following Standards and Interpretations have become effective and have been
adopted in these condensed financial statements. No Standards or
Interpretations have been adopted early in these condensed financial
statements.
Standard/Interpretation Subject
IAS 1 Classification of Liabilities as Current or Non-Current and
Non-Current Liabilities with Covenants
IFRS 16 Lease Liability in a Sale and Leaseback
IAS 7 and IFRS 7 Disclosures: Supplier Finance Arrangements
Amendments to IAS 1, IAS 16, IAS 7 and IFRS 7 have not had a material impact
to the Group on adoption.
Restatement of disclosures
During the financial year, the Group completed the sale of its wholly owned
subsidiary CPP Italia Srl (Italy) and its 51% holding in Globiva Services
Private Limited (Globiva). The Group wound up the operations of its wholly
owned subsidiaries CPP Proteccion Y Servicios de Asistencia SAU (Spain), CPP
Mediacion Y Proteccion SL (Portugal), CPP Malaysia Sdn. Bhd (Malaysia) and CPP
Global Assistance Bangladesh Limited (Bangladesh). In accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations, these companies
have been classified as discontinued within these financial statements.
Accordingly, the comparative consolidated income statement information and
appropriate disclosure notes have been restated. Portugal, Malaysia and
Bangladesh were not material subsidiaries and have been grouped and disclosed
in the notes as 'other'.
Going concern
In reaching their view on the preparation of the Group's financial statements
on a going concern basis, the Directors are required to consider whether the
Group can continue in operational existence for a period of at least 12 months
from the date of this report.
The Group, which is in a net liabilities position, has a formalised process of
budgeting, reporting and review along with procedures to forecast its
profitability and cash flows. The plans provide information to the Directors
which are used to ensure the adequacy of resources available for the Group to
meet its business objectives, both in the short-term and in relation to its
strategic priorities. The Group's revenue, profit and cash flow forecasts are
subject to robust downside stress testing which involves modelling the impact
of a combination of plausible adverse scenarios focused on crystallisation of
the Group's key operational risks. The analysis also considers the
availability of cash held around the Group where our Indian and Turkish
operations are cash generative whilst our operations in the UK, Centre and
Blink currently consume cash. This is done to identify risks to liquidity and
covenant compliance and enable management to formulate appropriate and timely
mitigation strategies.
Taking the analysis into consideration, the Directors are satisfied that the
Group has the necessary resources to continue in operational existence for a
period of at least 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing the financial
statements.
3. Critical accounting judgements and key sources of estimation uncertainty
Critical judgements
Revenue recognition
The Group recognises revenue either immediately on inception of a policy or over the duration of a policy where there are ongoing obligations to fulfil to a customer. Certain of the Group's contractual structures relating to product features require judgement in determining whether the Group carries an obligation to the customer over the term of the policy or if the exposure to that obligation has been transferred to a third party on inception. This judgement determines when the Group has completed the performance obligation to the customer and can recognise revenue.
The Group allocates revenue on a cost plus margin basis. The cost base may
vary over time as product features are enhanced, suppliers changed, or
underlying costs move. Judgement is applied in determining if the resulting
changes to the cost base represent a temporary or permanent adjustment in the
allocation of revenue to performance obligations. If a change is considered
temporary, or within a materiality threshold, revenue recognition principles
are not amended to aid consistency.
Classification of exceptional items
Exceptional items are those items that are required to be separately disclosed
by virtue of their size or incidence or have been separately disclosed on the
income statement in order to improve a reader's understanding of the financial
statements. Consideration of what should be included as exceptional requires
judgement to be applied. Exceptional items are considered to be ones which are
material and outside of the normal operating practice of the Group. Items
which are in other gains or losses and exceptional from their size or nature
are identified in the exceptional note.
Assumptions and estimation uncertainties
Current tax
The Group operates in countries with complex tax regulations, where filed tax
positions may remain open to challenge by local tax authorities for several
years. Corporation taxes are recognised by assessment of the specific tax law
and likelihood of settlement. Where the Group has uncertain tax treatments it
has recognised appropriate provisions reflecting the expected value calculated
by the sum of the probability-weighted amounts in a range of possible
outcomes.
Changes to the Group's assessment of uncertain tax treatments are reflected
through the consolidated income statement.
Onerous contract provisions
The Group recognised substantial provisions for onerous contracts in the prior
year which are still to be utilised in full. These represent a best estimate
as at the balance sheet date of the costs to deliver contractual commitments
over the remaining term of these contracts, which is up to 24 months from the
balance sheet date. These estimates are reviewed at every reporting date;
however, there are a number of factors which could influence the amount
required for these provisions, including policy cancellations and staff costs.
4. Segmental analysis
IFRS 8 Operating Segments requires operating segments to be identified on the
basis of internal reports about components of the Group that are regularly
reviewed by the Board of Directors to allocate resources to the segments and
to assess their performance.
The Group is managed on the basis of five broad business units:
• India(1);
• Turkey;
• Blink;
• Central functions - central cost base required to provide expertise
and operate a listed group. Central functions is stated after the recharge of
certain central costs that are appropriate to transfer to the relevant
geographies for statutory purposes; and
• Legacy (UK MGA and UK Legacy)(2).
1. Previously this segment included Globiva. Following its
disposal this has been reclassified as discontinued and the prior year
restated.
2. Previously this segment included Spain and Italy. On
abandonment and sale respectively they were reclassified as discontinued and
the prior year restated.
Segment revenue and performance for the current and comparative periods are
presented below:
Year ended 31 December 2024 India Turkey Blink Central functions Legacy Total
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Revenue - external sales 145,401 8,610 1,065 - 1,350 156,426
Cost of sales (130,198) (5,037) (253) - (130) (135,618)
Gross profit 15,203 3,573 812 - 1,220 20,808
Administrative expenses excluding depreciation, amortisation and exceptional (8,573) (2,167) (3,518) (3,534) (1,588) (19,380)
items
EBITDA 6,630 1,406 (2,706) (3,534) (368) 1,428
Depreciation and amortisation (1,883) (215) (145) (191) (1) (2,435)
Exceptional items (note 5) - - (78) (1,469) (245) (1,792)
Operating profit/(loss) 4,747 1,191 (2,929) (5,194) (614) (2,799)
Investment revenues 330
Finance costs (277)
Loss before taxation (2,746)
Taxation (1,928)
Loss for the year from continuing operations (4,674)
Discontinued operations
Profit for the year from discontinued operations 1,062
Loss for the year (3,612)
Year ended 31 December 2023 (restated*) India Turkey Blink Central Total
£'000 £'000 £'000 Functions Legacy £'000
£'000 £'000
Continuing operations
Revenue - external sales 160,972 4,675 816 - 6,970 173,433
Cost of sales (145,991) (1,834) (79) - (1,499) (149,403)
Gross profit 14,981 2,841 737 - 5,471 24,030
Administrative expenses excluding depreciation, amortisation and exceptional (9,133) (1,689) (2,529) (4,672) (4,667) (22,690)
items
EBITDA 5,848 1,152 (1,792) (4,672) 804 1,340
Depreciation and amortisation (705) (139) (162) (255) (176) (1,437)
Exceptional items (note 5) - (223) - (1,142) (4,615) (5,980)
Operating profit/(loss) 5,143 790 (1,954) (6,069) (3,987) (6,077)
Investment revenues 500
Finance costs (110)
Loss before taxation (5,687)
Taxation (2,157)
Loss for the year from continuing operations (7,844)
Discontinued operations
Loss for the year from discontinued operations (255)
Loss for the year (8,099)
Revenues from major products
Major product streams are disclosed on the basis monitored by senior
management.
2024 2023 (restated*)
£'000
£'000
Continuing operations
My Finances 34,777 39,393
My Tech 56,420 49,837
My Health 43,295 59,225
My Home 16,170 18,567
My Digital 4,880 5,852
My Travel 884 559
Revenue from continuing operations 156,426 173,433
Revenue from discontinued operations 11,530 19,603
Total revenue 167,956 193,036
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
The Group derives its revenue from contracts with customers for the transfer
of goods and services which is consistent with the revenue information that is
disclosed for each reportable segment under IFRS 8.
Geographical information
The Group operates across a number of territories, of which India and Turkey
are considered individually material. Revenue from external customers and
non-current assets (excluding deferred tax) by geographical location are
detailed below:
External revenues Non-current assets
2024 2023 (restated*) 2024 2023 (restated*)
£'000
£'000 £'000 £'000
India 145,401 160,972 5,671 6,380
Turkey 8,610 4,675 1,084 584
Other 2,415 7,786 916 419
156,426 173,433 7,671 7,383
Discontinued operations 11,530 19,603 - 4,011
167,956 193,036 7,671 11,394
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
Information about major customers
Revenue from the customers of one business partner in the Group's Indian
segment represented approximately £122,988,000 (2023: £134,637,000) of the
Group's total revenue.
5. Exceptional items
Exceptional items included in the table below details all exceptional items,
which are included in operating profit and discontinued operations, as well as
the associated taxation.
2024 2023 (restated*)
Note Core Legacy Total Core Legacy Total
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Restructuring and closure costs 973 270 1,243 299 1,197 1,496
Onerous contract provision - (25) (25) - 3,240 3,240
DBP charges 10 574 - 574 1,066 - 1,066
IT asset impairment - - - - 178 178
Exceptional charge included in loss before tax 1,547 245 1,792 1,365 4,615 5,980
Tax on exceptional items (6) - (6) (56) - (56)
Exceptional charge after tax for continuing operations 7 1,541 245 1,786 1,309 4,615 5,924
Discontinued operations
Exceptional charge/(gain) from discontinued operations 7 861 (1,895) (1,034) - 2,240 2,240
2,402 (1,650) 752 1,309 6,855 8,164
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
Exceptional costs in the year relate to the Group's strategy to exit its
Legacy markets, focus on its Core operations and simplify its Central
Functions.
Restructuring and closure costs total £1,243,000 (2023 restated: £1,496,000)
and relate to Legacy closure activities and Group restructuring, including
simplification of Central Functions. Redundancy and associated costs have been
recognised in UK Legacy, UK MGA and Central Functions. Restructuring costs
include necessary retention provisions as part of the closure process.
The onerous contract provisions credit of £25,000 (2023 restated: £3,240,000
charge) reflects a reassessment of onerous contract provisions, based on
latest cost and revenue estimates for UK Legacy and UK MGA. These provisions
were initially recognised in the prior year or earlier. All onerous contract
provisions recognised relate to the costs required to fulfil and exit
contractual commitments above the associated revenue receivable. This includes
costs to 2027 and is held as a provision at the balance sheet date.
DBP charges of £574,000 (2023: £1,066,000) relate to a share-based retention
plan for the EMC whereby participants agreed to defer a portion of their 2022
annual bonus in return for share options. The plan was established to
recognise the importance of having a settled and aligned EMC that is engaged
and retained for the duration of the CMP.
6. Taxation
2024 2023 (restated*)
£'000 £'000
Continuing operations
Current tax charge:
UK corporation tax - -
Foreign tax 2,322 2,396
Adjustments in respect of prior years 24 26
Current tax relating to continuing operations 2,346 2,422
Deferred tax credit:
Origination and reversal of timing differences (376) (70)
Impact of change in tax rates - (35)
Adjustments in respect of prior years (42) (160)
Deferred tax relating to continuing operations (418) (265)
Tax charge relating to continuing operations 1,928 2,157
Discontinued operations
Tax charge/(credit) relating to discontinued operations 707 (197)
Total tax charge 2,635 1,960
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
The following is a segmental review of the tax charge, in which withholding
taxes arising on distributions are attributed to the country paying the
distribution:
2024 2023 (restated*)
£'000 £'000
Continuing operations
Core:
India 1,750 1,773
Turkey 195 370
Blink 41 (94)
Central Functions - -
Total Core 1,986 2,049
Legacy (58) 108
Tax charge for continuing operations 1,928 2,157
Discontinued operations
Tax charge/(credit) for discontinued operations 707 (197)
2,635 1,960
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
Overall, UK profits chargeable to corporation tax are offset by Group relief
surrendered from fellow UK entities.
UK corporation tax is calculated at 25.0% (2023: 23.5%) of the estimated
assessable profit for the year. Deferred tax is provided at the rate at which
it is expected to reverse.
Taxation for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions - India 25.2% inclusive of surcharges (2023: 25.2%)
and Turkey 25.0% (2023: 25.0%). Non-UK deferred tax is provided at the local
prevailing tax rate which is expected to apply to the reversal of the timing
difference.
The charge for the year can be reconciled to the loss per the consolidated
income statement as follows:
2024 2023 (restated*)
£'000 £'000
Loss before tax from continuing operations (2,746) (5,687)
Effects of:
Tax at the UK corporation tax rate of 25.0% (2023: 23.5%) (686) (1,336)
Unprovided deferred tax arising on losses(1) 2,046 2,470
Recurring expenses not deductible for tax (14) 76
Provision for withholding tax on future distributions(2) 489 655
Other expense not chargeable for tax purposes - (85)
Higher tax rates on overseas earnings(3) 223 81
Adjustments in respect of prior years 23 64
Impact of change in future tax rates on deferred tax - (35)
Deficit of share option charge compared to tax allowable amount 51 267
Tax on disposal of operations (204) -
Tax charged to income statement for continuing operations 1,928 2,157
Tax charged/(credited) to the income statement for discontinued operations 707 (197)
2,635 1,960
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
Effective tax charge
The net tax charge of £1,928,000 on a loss before tax of £2,746,000 gives an
effective tax rate (ETR) of negative 70% (2023: negative 38%), which is lower
than the standard rate of 25%. The loss-making Legacy, Central functions and
Blink businesses have contributed to an overall loss before tax; however, tax
is still payable in our profitable Indian and Turkish markets, resulting in a
negative ETR.
Additional information is provided below:
1. Deferred tax has not been recognised on the losses arising in the
Legacy UK market, Blink or Central functions, as the short-term profit
expectations do not support the recognition of deferred tax assets in these
areas.
2. There is a withholding tax burden arising on repatriation of funds
from overseas countries which is included in the tax charge.
3. Tax is chargeable at the local statutory rates in our profitable
countries, which are higher or in line with the UK corporate income tax rate
of 25%.
The Group's ETR is expected to be higher than the UK statutory tax rate in
future years as withholding taxes are provided on overseas distributions and
deferred tax credits are not taken on losses in markets that are not
profitable. The withdrawal from the Legacy markets, the simplification of
Central Functions and Blink moving into profitability is expected to improve
the ETR in the medium term. The Group maintains appropriate provisions in
respect of tax uncertainties arising from operating in multiple overseas
jurisdictions.
There was no income tax charged to reserves during the current or prior year.
7. (Loss)/earnings per share
Basic and diluted (loss)/earnings per share have been calculated in accordance
with IAS 33 Earnings per Share. Underlying (loss)/earnings per share have also
been presented in order to provide a better understanding of the performance
of the business. In accordance with IAS 33, potential ordinary shares are only
considered dilutive when their conversion would decrease the earnings per
share or increase the loss per share attributable to equity holders.
(Loss)/profit
Continuing operations Discontinued operations Total
2024 2023 (restated*) 2024 2023 (restated*) 2024 2023
£'000
£'000
£'000
£'000
£'000 £'000
(Loss)/profit for the purposes of basic and diluted (loss)/earnings per share (4,674) (7,844) 1,084 (811) (3,590) (8,655)
Exceptional items (net of tax) 1,786 5,924 (1,034) 2,240 2,820 8,164
(Loss)/profit for the purposes of underlying basic and diluted (loss)/earnings (2,888) (1,920) 50 1,429 (2,838) (491)
per share
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
(Loss)/profit attributable to Core and Legacy
2024 2023 (restated*)
Core Continuing operations Legacy Continuing operations
£'000
£'000
£'000 £'000
Legacy Core
£'000
£'000
(Loss)/profit for the purposes of basic and diluted (loss)/earnings per share (3,618) (1,056) (4,674) (3,976) (3,868) (7,844)
Exceptional items (net of tax) 1,541 245 1,786 1,309 4,615 5,924
(Loss)/profit for the purposes of underlying basic and diluted (loss)/earnings (2,077) (811) (2,888) (2,667) 747 (1,920)
per share
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
The table above does not include discontinued operations.
Number of shares
2024 2023
Number Number
(thousands) (thousands)
Weighted average number of ordinary shares for the purposes of basic 9,005 8,846
(loss)/earnings per share and basic underlying (loss)/earnings per share
Effect of dilutive ordinary shares: share options 1,369 295
Weighted average number of ordinary shares for the purposes of diluted 10,374 9,141
(loss)/earnings per share and diluted underlying (loss)/earnings per share
Continuing operations Discontinued operations Total
2024 2023 (restated*) 2024 2023 (restated*) 2024 2023
pence pence pence pence pence pence
Basic and diluted (loss)/earnings per share (51.90) (88.67) 12.04 (9.17) (39.86) (97.84)
Basic and diluted underlying (loss)/earnings per share (32.07) (21.70) 0.56 16.14 (31.51) (5.56)
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
2024 2023 (restated*)
Core Legacy Continuing operations Core Legacy Continuing operations
pence pence pence pence pence pence
Basic and diluted (loss)/earnings per share (40.18) (11.72) (51.90) (44.95) (43.72) (88.67)
Basic and diluted underlying (loss)/earnings per share (23.06) (9.01) (32.07) (30.15) 8.45 (21.70)
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
The Group has 171,650,000 (2022: 171,650,000) deferred shares which have no
rights to receive dividends and only very limited rights on a return of
capital. The deferred shares have not been admitted to trading on AIM or any
other stock exchange. Accordingly, these shares have not been considered in
the calculation of loss/earnings per share.
8. Discontinued operations
On 14 June 2024, the Group completed the sale of its 100% shareholding in CPP
Italia Srl (Italy). Consideration on disposal was £433,000 (€512,000).
On 15 July 2024, the Group wound up the operations of its 100% shareholding in
CPP Proteccion Y Servicios de Asistencia SAU (Spain).
On 21 August 2024, there was a share buy back by Globiva Services Private
Limited reducing the Group's holding in the company from 51% to 35% which
re-classified the holding to a fair value equity investment from a
consolidated joint venture. The equity investment was sold on 9 September
2024. Total consideration for both parts of the disposal was £3,804,000 (INR
415.4 million).
Operating results for the year ended 31 December 2024 reflect the trading
performance of Spain, Italy and Globiva up to the respective dates of disposal
or closure. The comparative information reflects a full year for the
companies. Spain and Italy were part of the Legacy segment, while Globiva was
part of the Core segment.
Other discontinued operations includes Portugal, Malaysia and Bangladesh which
have all been wound up and were part of the Legacy segment.
(i) Income statement
2024
Globiva Italy Spain Other Total
£'000 £'000 £'000 £'000 £'000
Revenue 10,790 687 53 - 11,530
Cost of sales (8,446) (309) (2) - (8,757)
Gross profit 2,344 378 51 - 2,773
Administrative expenses (2,305) 63 (653) - (2,895)
Operating profit/(loss) 39 441 (602) - (122)
Analysed as:
EBITDA 1,211 98 (135) - 1,174
Depreciation and amortisation (661) (37) - (698)
Exceptional items (511) 380 (467) - (598)
Investment revenues 117 - - - 117
Finance costs (205) - (3) - (208)
Other gains and losses - - 1,949 33 1,982
Profit/(loss) before taxation (49) 441 1,344 33 1,769
Taxation (674) - (33) - (707)
Profit/(loss) for the year (723) 441 1,311 33 1,062
2023 (restated*)
Globiva Italy Spain Other Total
£'000 £'000 £'000 £'000 £'000
Revenue 14,547 1,806 3,117 133 19,603
Cost of sales (11,127) (798) (708) (55) (12,688)
Gross profit 3,420 1,008 2,409 78 6,915
Administrative expenses (2,362) (752) (4,012) (98) (7,224)
Operating profit/(loss) 1,058 256 (1,603) (20) (309)
Analysed as:
EBITDA 2,205 322 933 (16) 3,444
Depreciation and amortisation (1,147) (66) (116) (4) (1,333)
Exceptional items - - (2,420) - (2,420)
Investment revenues 249 - - - 249
Finance costs (362) (3) (11) - (376)
Other gains and losses - - - (16) (16)
Profit/(loss) before taxation 945 253 (1,614) (36) (452)
Taxation 288 (45) (46) - 197
Profit/(loss) for the year 1,233 208 (1,660) (36) (255)
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
(ii) Exceptional items
2024
Globiva Italy Spain Other Total
£'000 £'000 £'000 £'000 £'000
Loss/(profit) on disposal 511 (380) - - 131
Write down of assets on wind up of discontinued operation - - 414 - 414
Restructuring costs - - 53 - 53
Exceptional items included in operating (profit)/loss 511 (380) 467 - 598
Other gains and losses - - (1,949) (33) (1,982)
Tax on exceptional items 350 - - - 350
Total exceptional items after tax 861 (380) (1,482) (33) (1,034)
2023 (restated*)
Globiva Italy Spain Other Total
£'000 £'000 £'000 £'000 £'000
Restructuring costs - - 2,420 - 2,420
Exceptional items included in operating (profit)/loss - - 2,420 - 2,420
Other gains and losses 16 16
Tax on exceptional items - - (196) - (196)
Total exceptional items after tax - - 2,224 16 2,240
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
(iii) (Loss)/profit on disposal
The Group has recognised a (loss)/profit on disposal as follows:
2024
Globiva Italy Total
£'000 £'000 £'000
Proceeds 3,804 433 4,237
Net (assets)/liabilities sold (6,103) (5) (6,108)
Non-controlling interests differences on disposal 2,134 - 2,134
Costs associated with disposal - (72) (72)
Currency translation differences on disposal (346) 24 (322)
(Loss)/profit on disposal (511) 380 (131)
There were no disposals in 2023.
(iv) Summary of cash flows
2024
Globiva Italy Spain Total
£'000 £'000 £'000 £'000
Net cash flows from operating activity 952 (48) (742) 162
Net cash flows from investing activity (1,009) 228 (5) (786)
Net cash flows from financing activity (625) - - (625)
Net cash (outflow)/inflow (682) 180 (747) (1,249)
2023 (restated*)
Globiva Italy Spain Total
£'000 £'000 £'000 £'000
Net cash flows from operating activity 2,124 173 (118) 2,179
Net cash flows from investing activity 7 (184) - (177)
Net cash flows from financing activity (974) - - (974)
Net cash inflow/(outflow) 1,157 (11) (118) 1,028
* Restated to reclassify Globiva, Italy and Spain as discontinued on sale or
closure of operations.
9. Share capital
Ordinary Deferred Total
shares of shares of (thousands)
£1 each 9 pence
(thousands) each
(thousands)
Called-up and allotted
At 1 January 2024 8,847 171,650 180,497
Issue of shares in connection with:
Exercise of share options 317 - 317
At 31 December 2024 9,164 171,650 180,814
Ordinary Deferred Total
shares of shares of £'000
£1 each 9 pence
£'000 each
£'000
Called-up and allotted
At 1 January 2024 8,844 15,413 24,257
Issue of shares in connection with:
Exercise of share options 317 - 317
At 31 December 2024 9,161 15,413 24,574
Share capital at 31 December 2024 is £24,574,000 (2023: £24,257,000).
Of the 9,164,804 (2023: 8,847,145) ordinary shares in issue at 31 December
2024, 9,159,804 are fully paid (2023: 8,842,145) and 5,000 (2023: 5,000) are
partly paid.
On 2 July 2024, the CPP Employee Benefit Trust (EBT) purchased 149,405 shares
for a total cash consideration of £248,000. The total amount paid to acquire
the shares has been deducted from the ESOP reserve. As at 31 December 2024,
the total number of shares held by the EBT was 149,405 (2023: nil).
During the year, the Company issued 317,659 shares to option holders for total
consideration of £nil.
The ordinary shares are entitled to the profits of the Company which it may
from time to time determine to distribute in respect of any financial year or
period.
All holders of ordinary shares shall have the right to attend and vote at all
general meetings of the Company. On a return of assets on liquidation, the
assets (if any) remaining, after the debts and liabilities of the Company and
the costs of winding up have been paid or allowed for, shall belong to, and be
distributed amongst, the holders of all the ordinary shares in proportion to
the number of such ordinary shares held by them respectively.
Deferred shares have no voting rights, no rights to receive dividends and only
very limited rights on a return of capital. The deferred shares have not been
listed for trading in any market and are not freely transferable.
10. Reconciliation of operating cash flows
2024 2023
£'000 £'000
Loss for the year (3,612) (8,099)
Adjustments for:
Depreciation and amortisation 3,133 2,770
Share-based payment charge 709 1,134
Impairment loss on intangible assets - 178
Impairment loss on property, plant and equipment - 40
Loss on disposal of property, plant and equipment 54 24
Loss on disposal of intangible assets - 31
Loss on disposal of discontinued operations 131 -
Other gains and losses (1,982) -
Effects of hyperinflation (70) (82)
Investment revenues (447) (749)
Finance costs 485 486
Income tax charge 2,635 1,960
Operating cash flows before movements in working capital 1,036 (2,307)
(Increase)/decrease in inventories (3) 78
Decrease/(increase) in contract assets 1,044 (1,259)
Decrease in receivables 3,232 4,270
(Decrease)/increase in payables (8,157) 832
(Decrease)/increase in contract liabilities (1,974) 833
Decrease in insurance liabilities (62) (6)
(Decrease)/increase in provisions (1,824) 3,096
Cash from operations (6,708) 5,537
Income taxes paid (3,030) (1,927)
Net cash (used in)/from operating activities (9,738) 3,610
Reconciliation of net funds
At Cash flow Foreign exchange and other non-cash movements At
1 January £'000 £'000 31 December
2024 2024
£'000 £'000
Net cash per cash flow statement 19,001 (9,100) (251) 9,650
Financing activities:
Lease liabilities (3,799) 966 1,805 (1,028)
Borrowings due outside of one year:
- Unamortised issue costs 105 - (39) 66
Total movement from financing activities (3,694) 966 1,766 (962)
Total net funds 15,307 (8,134) 1,515 8,688
11. Related party transactions
Transactions with associated parties
In the year, up to the date of disposal, the Group incurred fees of £1,000
plus VAT (2023: £10,000) for services rendered from KYND, which were payable
under 14-day credit terms.
Transactions with related parties
There have been no transactions with related parties in the current year which
have not already been disclosed.
Remuneration of key management personnel
The remuneration of the Directors and senior management team, who are the key
management personnel of the Group and Company, is set out below:
2024 2023
£'000 £'000
Short-term employee benefits 1,275 1,412
Post-employment benefits 22 20
Share-based payments 399 593
1,696 2,025
Cautionary statement
This announcement has been prepared solely to provide additional information
to shareholders as a body to meet the relevant requirements of the UK Listing
Authority. The announcement should not be relied on by any other party or for
any other purpose.
The announcement contains certain forward-looking statements. These statements
are made by the Directors in good faith based on the information available to
them up to the time of approval of the announcement but such statements should
be treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such forward-looking
information. Subject to the requirements of the UK Listing Authority, CPP
undertakes no obligation to update these forward-looking statements and it
will not publicly release any revisions it may make to these forward-looking
statements that may result from events or circumstances arising after the date
of this announcement.
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