CPP Group warns over sales growth as probe by watchdog continues

The York-based group said its decision to suspend sales of identity protection in the UK as a result of the investigation, plus Barclaycard’s termination of its contract, will hit margins for the six months to the end of June.

CPP, headed by chief executive Eric Woolley, revealed the as-yet unresolved probe by the Financial Services Authority in March.

It said half-year sales growth will be lower than the rate experienced in the first four months of the year because of the lost sales.

“We continue to work closely with the FSA in relation to its ongoing investigation, however the timeframe to the conclusion of such discussions remains unclear,” said the group.

“The board continues to believe in the ongoing relevance and consumer appeal of our products and services and we remain focused on developing our business in the UK and internationally.”

Despite the FSA probe, it still expects to report overall year-on-year growth for the half year, driven by sustained expansion in Northern Europe, North America and Asia Pacific, but dented by Southern Europe’s economic woes.

Shares in the group lifted 2p to close at 138.5p, a 1.5 per cent rise.

Charles Stanley analyst Andy Smith said an investment in CPP is “binary”.

“The share price could double returning to its pre-investigation levels or continue to trade around its current level depending upon the result of the investigation,” he said.