CPP Group, an identity theft and credit card insurer, saw its shares plunge as trading in its shares resumed after a five-week gap.
The company's stock exchange listing was temporarily suspended on February 20th because the Financial Services Authority (FSA) had launched an investigation into the sale of the group's card protection and identity protection products in the UK, throwing the company's business into turmoil. CPP declared it was no longer able to accurately assess its financial position and asked for trading in its shares to be suspended.
The firm said discussions are continuing as to how the group will address the issues with the FSA, but in the meantime, it has published its results for 2011. These showed a 6% rise in revenue to £346.1m, but a 29% dive in reported profit before tax, from £39.8m to £28.3m. Underlying profit fell just 1% to £46.4m.
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Reported basic earnings per share (EPS) fell 35% from 16.33p to 10.64p (underlying EPS lost 2% to 18.9p). Net debt of £2.2m turned to funds of £11.9m.
The dividend was reduced from 7.54p to 2.42p per share.
Paul Stobart, Group Chief Executive Officer, said: "In the short-term, 2012 is a very important year for us, particularly in the UK, and my first priority is to work closely and co-operatively with the FSA to resolve matters to the complete satisfaction of the regulator.
"Going forward, the group's UK business will undergo a period of significant adjustment as a result of the impact of the FSA investigation. Lower retail new assistance income in 2011 will lead to a significant reduction in profitable renewal revenue in 2012. There may be some adverse impact on renewal rates from changes to the renewals process for Card Protection and Identity Protection in the UK. The planned closure of the call to confirm channel in the UK will adversely [have an] impact [on] new assistance income and revenue and profit growth in 2012 and beyond, unless replaced by revenue from alternative channels."
The share price fell 28.64% to 73.50p. It has fallen over 70% in the past year, equivalent to 197p.
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