LONDON, UK: CPP Group (AIM: CPP), a provider of real-time, digitally delivered assistance products that alleviate disruptions to everyday life for millions worldwide, announced its annual financial results for the year ending December 31, 2023. The company has seen a commendable increase in group revenue, which rose by 14% to £193.0 million, up from £169.8 million in the previous year. However, EBITDA decreased to £4.8 million from £6.9 million in 2022.

The company’s core business units experienced a revenue boost of 17%, amounting to £181.0 million, compared to £154.3 million in 2022. EBITDA from these core business units was reported at £7.4 million, a slight decrease from the previous year’s £8.3 million.

Exceptional items totaled £8.4 million, primarily due to the planned closure of legacy businesses, leading to a loss before tax of £6.1 million, contrasting with the £2.4 million profit in 2022. The cash balance stood at £19.0 million at the end of 2023, a slight dip from £21.0 million the previous year.

On the operational front, CPP Group has streamlined its focus to three core businesses: Blink Parametric, CPP India, and CPP Turkey, shifting its proposition from “insurance” to “digital assurance” services. These core businesses are performing well, with Blink Parametric securing seven new business partners and achieving a 100% renewal rate.

CPP India and CPP Turkey have also shown strong growth. The Change Management Programme is proceeding as planned, with Phase 1 of the new Indian IT platform delivered. The exit from legacy operations is progressing as expected and swiftly.

Additionally, the planned divestment of Globiva was announced in November 2023, expected to occur over three years for approximately £5.1 million. The disposal of a minority interest in KYND Limited was announced post-period for £2.6 million. Following regulatory changes in India, a subset of the LivCare business with Bajaj Finance Limited has been transferred out of the group. These strategic moves are indicative of CPP Group’s commitment to its growth and focus on digital assurance services.

Simon Pyper, CEO of CPP Group, commented: “That we have been able to implement and execute the Change Management Programme (“CMP”), to divest non-core businesses such as Globiva and KYND, and at the same time, to deliver growth from our core business, is I believe, a testament to the quality of the people that I have the privilege to work with.

From a trading perspective the Group’s key Indian and Turkish markets, despite currency headwinds, performed well. Both businesses added new partners and new products and are well positioned to make further progress in 2024. Blink, the Group’s parametric business primarily focused on the global travel market, also made good progress, securing seven new business partners, and achieving a 100% renewal rate of its existing client base, both of which are further proof points of the value our services provide to both the Insurer and end customer.

Despite the good revenue growth, EBITDA from our core business units was lower than prior year at £7.4 million reflecting the planned investment in Blink, a mix change in CPP India product sales, and £0.8 million adverse currency movements.

From an operational perspective, the Group is now at the implementation stage of its CMP which, at its conclusion, will see the Group exit from its Legacy businesses and focus on growing its core Blink, Indian, and Turkish operations. 

The Group achieved the majority of the objectives that it set for itself for 2023, having over the past year delivered a new IT platform for its business in India, exited from its legacy operations in Spain, and commenced the closure process for its legacy UK businesses. As expected, the legacy closure activity has led to substantial exceptional provisions in our financial statements and moreover, is expected to consume cash as the businesses are wound down over the medium-term.

Whilst much has been achieved, there remains much to be done before we fully realise our ambition to transform CPP into a digitally led parametric business. Progress may never be as fast as I would like, but I am confident that we are travelling in the right direction and at an appropriate speed.”