CPP reports on ‘challenging’ year

YORK-based CPP today revealed that it had experienced a “challenging year” which led to a modest operating performance.

In the year ended April 30, CPP’s group revenue, from continuing and discontinued operations, fell to £319.7m from £346.1m.

Paul Stobart, the chief executive officer, said today: “As expected, revenue declined in the UK, impacting on the profitability of the group. In the year, the FCA investigation was concluded and there is a substantial fine to pay.

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“Within the business, we have effected a great deal of change to enhance customer experience, product propositions and our governance framework. In addition, a strategic review resulted in the proposed disposal of the North American business alongside a short term extension to the revolving credit facility in April 2013.

“Looking ahead, we will continue to face significant financial challenges in the short to medium term. We need to secure our longer term financing, manage the redress programme, reposition the business and reshape our business model to reflect our changed circumstances. We do not underestimate the scale of the challenges ahead. In the longer term, I believe that the actions we are taking to rebuild our business and reputation, combined with the enhancements to governance and risk management we have put in place, will provide us with a stronger, more stable platform from which to move the business forward.”

CPP, which employs about 1,400 staff, sells products such as wallet and card protection through banks and building societies. It was brought to its knees by a mis-selling scandal between 2005 and 2011, during which time it sold 4.4 million policies and renewed almost 19 million.

The Financial Services Authority last year slammed it for treating customers unfairly, selling them insurance they did not need, automatically renewing policies and exaggerating the risks of not taking out its insurance.

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Hamish Ogston, the founder of CPP Group, has until May 31 to decide whether to make a firm offer for the business after the Takeover Panel extended the deadline.

Mr Ogston, who is York-based CPP’s majority shareholder and founded the business more than 30 years ago, has offered to buy the company for an indicative 1p per share, or £1.7m.

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