CPP tanks after losing Barclaycard contract
Shares in identity theft and credit card insurer CPP hit a 52-week low of 105p on Wednesday after Barclaycard said that it will not renew its contract which is set to expire on March 31st.
Shares in identity theft and credit card insurer CPP hit a 52-week low of 105p on Wednesday after Barclaycard said that it will not renew its contract which is set to expire on March 31st.
Back in March, Barclaycard stopped sales using CPP's 'call-to-confirm' services after it was announced that the Financial Services Association (FSA) had raised sales-related issues with its certain products. The move saw CPP's shares tank from the now-current 52-week high of 310.8p to the 150p mark.
The loss of this contract means that new sales of the group's Card Protection and Identity Protection policies to Barclaycard's customers will cease. These policies equate to less than 1% of group revenue and there will be no material change in underlying operating profit this or next year.
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
"Whilst disappointed at Barclaycard's decision, the board remains positive about the group's prospects in the UK as the new business pipeline continues to build, the consumer appeal of the group's products remains strong, and relationships with business partners remain good," CPP said.
According to Peel Hunt analyst Henry Carver, "Barclaycard's decision not to renew its contract with CPP confirms our concerns over the risk of the loss of business partners in wake of the FSA investigation, the duration and outcome of which remain uncertain."
"The risk of further business partners ceasing their relationship with CPP remains very high, overshadowing forecasts," he said.
By 15:00, shares were trading at 105p, down 11.58% on yesterday's close of 118.75p.
BC/NR
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Review: The Hut, Colwell Bay – a seafood lunch with a holiday feel
Travel Getting to The Hut in Colwell Bay on the Isle of Wight is almost as rewarding as actually eating there
-
What is the 7 year inheritance tax rule and how does it help cut your bill?
Speculation is rife chancellor Rachel Reeves has plans to target inheritance tax once again in her upcoming Budget. But the 7 year inheritance tax rule can save you thousands - here’s how it works.