GB Group guides lower half-year profit amid Americas Identity charge

GB Group PLC on Monday retained recently lowered full-year guidance but said it will take accounting charges in its financial first half related to performance in its Americas Identity business.

The Chester, England-based identity verification and fraud prevention company expects to report revenue of £139.5 million for the six months that ended September 30, up 1.4% on-year on a constant currency basis.

Location and Identity - which together represent 95% of total revenue - delivered constant currency revenue growth ahead of the group results at 4.5%.

Revenue growth in Location was 8.9%, driven by a strong performance in enterprise channel partnerships and the Asia Pacific region.

Identity revenue growth of 2.4% was driven by double-digit growth outside Americas, primarily driven by a strong Europe, Middle East & Africa performance.

However, performance in Americas Identity was hurt by attrition in a small number of material direct customers, GB Group had previously said.

GB Group on Tuesday said it has accelerated cost cuts to mitigate the impact of the Americas Identity setbacks, with around £4.5 million of exceptional cost incurred during the first half. It expects to take a non-cash goodwill impairment charge related to the Americas Identity business in its interim results.

The non-core Global Fraud Solutions business, around 5% of total revenue, declined "more significantly" than expected, GB Group said, reflecting timing of license renewals, increased customer churn and fewer new wins.

"We continue to assess the strategic options for this business which remains profitable and cash generative," the firm said.

First half adjusted operating profit is expected to be £27.0 million, down from £29.5 million a year prior, reflecting the previously announced additional investment into accelerating GBG Go. This work is on track, and the extra spend is still expected to conclude by the end of financial 2027, GB Group said.

The outlook for the financial year ending March 31, 2027 is in line with recently revised market expectations, with revenue growth expected to be 1% to 3%, the firm said, from £285.0 million the year prior. It expects to deliver adjusted operating profit in line with current market expectations of £61 million. This would be down 9.6% from £67.5 million in financial 2026.

In August, GB Group lowered revenue growth guidance from mid-single-digit percentage growth previously.

Shares in GB Group were down 3.8% at 152.00 pence each in London on Tuesday morning and have fallen 36% in the past 12 months.

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