CPP hit by FSA probe

The York-based group’s shares have plunged in recent weeks after it revealed it is being probed by the Financial Services Authority. Barclays has already dropped it as a partner, and analysts have warned that others may follow.

CPP said that revenues have been hit since the FSA launched its investigation at the end of March, resulting in its identity theft protection products being suspended.

“Group margins will be impacted by the lost sales, particularly in the first half of 2011,” said CPP in a statement.

CPP said group sales rose 12 per cent in the year to end-April.

The company’s shares bounced back in early trade on Thursday, after losing more than half their value since the FSA investigation was announced.

Shares in the company, which raised £150m through a London listing last year, were up 4.7 per cent this morning.

Analyst Hugo Mills at Citi said: “This was a solid statement considering the circumstances but until we have some certainty on the impact of the FSA investigation, it is hard to see a catalyst.”

The company, which operates in 14 countries, said sales in Northern Europe grew by 14 per cent in the four-month period to the end of April, and rose 12 per cent in the UK, offset by a six per cent decline in Southern Europe.

Last month, the company warned on profits after its major business partner Barclaycard halted sales of some CPP products.