GB Group (LON:GBGP) H119 update confirmed that the business is trading in line with expectations, with underlying organic revenue growth of 11% and underlying operating profit growth of 7% compared to H118. While our underlying forecasts are unchanged, we have upgraded our estimates to reflect the recent Vix Verify Global acquisition, which results in a 2.7% increase in our normalised FY20 EPS forecast.
H1 trading update in line with expectations
GBG’s trading update confirmed revenues of £57.2m for H119, up 9% on a reported basis but up 11% on an underlying organic basis after adjusting for the £3.5m one-off perpetual licence signed in H118. Expected adjusted operating profit of £8.7m was 16% lower than a year ago, but after adjusting for the perpetual licence in H118, was 7% higher on an underlying organic basis. Planned investments in technology and marketing are expected to have a disproportionate effect on profitability in H119 versus H219. Net cash at the end of H119 stood at £18.6m, up from the £13.5m at the end of FY18 and £4.1m at the end of H118. The company expects to meet consensus FY19 forecasts for revenue and profit.
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