Identity theft and credit card insurer CPP saw its shares tumble after admitting that the suspension of Identity Protection sales in the group's UK voice channels is continuing to have a material impact on the group's ability to sell its full range of products in the UK.
As a result, next year's underlying group operating profit is set to be significantly lower than 2011 and weighted towards the second half of the year.
The firm is currently the subject of an FSA investigation into the sale of the group's Card Protection and Identity Protection products. The duration and outcome of the FSA investigation continues to be uncertain.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The group also said that its new, non-insured service product, Identity Safe, will not be adopted by business partners until after the investigation is concluded.
"Despite these factors and the impact of the worsening economic situation in Southern Europe, overall trading has been robust and the group expects to deliver 2011 organic revenue growth of around 6% which is broadly in line with market expectations. The group's KPIs continue to be resilient, with renewal rates, and underlying operating profit margin both in line with our recent interim management statement," the firm said.
Total new assistance income for the year ended 31 December is expected to be as much as 4% lower than 2010. New assistance income derived from the sale of retail products has, however, declined compared to 2010 as a result of the suspension of Identity Protection in the UK and the economic situation in Southern Europe. This has been partially offset by the growth in new assistance income from the group's packaged accounts and wholesale activities.
The share price fell 21.04% to 109.75p by 12:38.
NR
