Interim Management Statement


 

TIDMCPP 
 
RNS Number : 1332M 
CPPGroup Plc 
19 May 2010 
 

CPPGROUP PLC 
INTERIM MANAGEMENT STATEMENT 
19 MAY 2010 
CPPGroup Plc ("CPP" or the "Group") today publishes its first Interim Management 
Statement ("IMS") since its recent listing on the London Stock Exchange, for the 
period from 1st January 2010 to the date of publication. Comparative references 
are to the same period in 2009. 
CPP is a fast-growing and leading international life assistance business with 
operations in 15 countries in both developed and emerging markets. CPP's 
products and services are designed to meet consumer needs across a range of 
requirements, in particular relating to credit and debit card ownership, 
personal identity, mobile telephones, travel and the home. The Group primarily 
focuses on providing customer assistance during stressful life events such as 
losing or having a wallet, purse, mobile telephone or keys stolen, as well as 
support in the event of identity theft. 
Strategy execution and market update 
In line with our strategy of product, channel and international expansion, we 
have continued to grow our business through the development of existing and new 
business partner relationships during the period. 
As part of our initiative to develop our packaged current account business, we 
started providing mobile phone insurance for a range of RBS and NatWest packaged 
current account customers in the UK in March. This has the added benefit of 
diversifying the business partner base for our mobile phone insurance business. 
In North America we commenced sales of Identity Protection from our new 
exclusive relationship with Sovereign Bank, a Santander Group subsidiary, in 
January. 
The introduction of EMV "chip and pin" cards in Spain is underway, and we have 
started implementing card activation campaigns with existing business partners 
to take advantage of this opportunity. This initiative is expected to deliver 
growth in the medium term, however has a short term adverse impact on margins in 
our Southern Europe region. 
Our recently launched markets continue to develop and grow. Following launch in 
2008, our business in India has signed contracts with a further 3 business 
partners this year, taking our total number of business partners in India to 9. 
Indian revenues in 2010 now include renewals from existing customers. Card 
Protection sales in Mexico, where we commenced selling to HSBC customers in 2009 
are growing well. In an important first small step in establishing CPP in China, 
we have signed a contract with Guangdong Development Bank for the wholesale 
provision of Card Protection within their new premium card offering. 
The fundamental market drivers of our business continue to be favourable. In the 
UK for example, the growth of fraud and in particular identity fraud, shows no 
sign of slowing. In the first three months of 2010, CIFAS - the UK's Fraud 
Prevention Service - reported identity fraud had increased by 20%. In this 
environment, our Identity Protection Alert product offers our customers a 
comprehensive solution to help them prevent, detect and if necessary resolve 
identity theft. 
Financial performance 
Group revenue has grown year on year in line with expectations. We have grown 
new assistance income year on year, despite the uncertain economic environment. 
The Group annual renewal rate has remained in line with prior years at 
approximately 77%. 
Northern Europe has grown revenue through the continued expansion of Identity 
Protection, the continued roll out of higher priced product variants of Card 
Protection and Identity Protection and the ongoing development of the packaged 
accounts channel. We have successfully integrated the Leapfrog business acquired 
in 2009 and are growing revenues from the Airport Angel product. 
The UK budget on 24 March 2010 delayed by three months from December 2009 the 
change in Insurance Premium Tax, which has become payable on the full price of 
UK sales of our Card Protection and Identity Protection products as disclosed in 
our IPO prospectus. We have already implemented measures jointly with our 
business partners to ensure that minimal margin erosion has been suffered as a 
result of this change in legislation. 
Revenue in our Southern Europe region has been stable despite being impacted by 
the ongoing difficult economic conditions in that area, particularly in Spain. 
As a result of the continued development of Card Protection sales in India, Asia 
Pacific achieved year on year revenue growth despite the impact of a new credit 
card tax in Malaysia. North America revenues are in line with expectations. 
Group operating margins have continued to show some expansion mainly due to 
changes in product mix and the continued roll out of higher priced variants of 
existing products. As a result of consistent revenue growth and this margin 
expansion, underlying Group Operating Profit has grown in line with our 
expectations. 
Following the refinancing of our borrowings, the remaining unamortised issue 
costs of GBP3 million on our previous facilities have been charged as financing 
costs in the period, as outlined in our IPO prospectus. 
Financial position 
On 24 March we successfully completed our listing on the London Stock Exchange, 
raising net proceeds of GBP26 million. The Group reconstruction and refinancing 
of our bank debt outlined in our IPO prospectus are now complete. 
Since IPO, cash flows have remained strong and net debt has been subsequently 
reduced to GBP14 million at 30 April 2010 compared to GBP49 million at 31 
December 2009, further strengthening our financial position. 
Eric Woolley, Group Chief Executive commented, 
 "We are delighted to announce our first trading statement as a publicly listed 
company. In an uncertain economic environment we have grown income from new 
policies and maintained the Group annual renewal rate in line with previous 
years, demonstrating the strength of our business model and the global demand 
for our products. The year is progressing in line with expectations and we 
continue to grow our business through the development of existing and new 
business partner relationships. I am pleased with the progress we have made and 
look forward to the coming year with confidence." 
A conference call for analysts will be held on 19 May 2010 at 8am, dial-in 
details for which are as follows: 
Dial in: +44 (0) 1452 568 051 
Participants ID: 74499574 
 
For enquiries contact: 
Eric Woolley, Group Chief Executive 
Shaun Parker, Chief Financial Officer 
Tel. +44 (0)1904 544702 
Tulchan Communications 
John Sunnucks 
David Allchurch 
Tel. +44 (0)20 7353 4200 
 
Cautionary statement 
This IMS has been prepared solely to provide additional information to 
shareholders as a body to meet the relevant requirements of the UK Listing 
Authority's Disclosure and Transparency Rules. The IMS should not be relied on 
by any other party or for any other purpose. 
The IMS contains certain forward-looking statements. These statements are made 
by the directors in good faith based on the information available to then up to 
the time of approval of the IMS 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 UK Listing Authority's Disclosure and Transparency Rules and 
Listing Rules, 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 IMS. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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