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Highlights:
- Improved Revenue and Profitability: GB Group posted a 3.4% revenue increase to £136.9 million and a 21% jump in adjusted operating profit to £29 million for the half-year ended 30 September.
- Identity and Location Drive Growth: Identity and Location divisions saw growth of 6% and 8.6% respectively, offsetting challenges in the Fraud division.
- Optimistic Outlook Maintained: The company reaffirmed guidance for mid-single-digit revenue growth and high-single-digit profit growth for the full year
GB Group PLC (LSE:GBG), a leader in identity fraud and location software, delivered a strong set of half-year results, driving its shares to their highest level since early 2023. The company, which counts global brands like Santander, Revolut, and Racing Stars among its clients, demonstrated a clear improvement in growth across key segments.
For the six months ending 30 September, GB Group reported revenues of £136.9 million, marking a 3.4% year-on-year increase (4.5% at constant currency). Adjusted operating profit surged by 21% to £29 million, buoyed by growth in its Identity and Location divisions.
Division Performance: Identity and Location Shine
The Identity division led the charge with a 6% growth rate, while the Location segment outpaced expectations with an 8.6% rise. These gains offset a 9.2% decline in the Fraud division, attributed to the timing of license renewals. Despite the dip, the Fraud segment remains a vital component of the company's portfolio.
CEO Dev Dhiman, overseeing his first full results since his January appointment, expressed optimism about the progress made so far. “We have made positive strides in simplifying operations, aligning globally, fostering a performance-driven culture, and innovating to differentiate,” Dhiman said, adding, “There is still more to be done to accelerate organic growth, but I’m encouraged by the results.”
Outlook: Growth Momentum to Continue
The company maintained its full-year outlook for mid-single-digit revenue growth on a constant currency basis, paired with high-single-digit growth in adjusted operating profit. With the strong performance already banked in the first half, GB Group appears well-positioned to meet these targets.
Broker Jefferies noted the solid outlook, stating, “Flat EBIT in the second half would be sufficient to underpin FY EBIT growth of 8.5%, effectively de-risking the year and supporting our positive view on the shares.”
Market Reaction and Future Potential
GB Group’s shares rose by over 7% in early trade to 368p, reflecting renewed investor confidence in the company’s growth trajectory. While still significantly below the highs of 2021, this marks a steady recovery for the company. Analysts suggest that continued progress in driving organic growth, coupled with a strong focus on innovation and global alignment, could further boost shareholder value.
With Identity and Location segments leading the charge and an optimistic outlook for the full year, GB Group is well-positioned to capitalize on its momentum in the rapidly evolving digital identity and fraud prevention markets.
