Trading Update, Proposed Acquisition of DecTech Solutions Pty Ltd

 Published: Thursday April 24, 2014

 Written by GBG News on Investor News

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Trading Update, Proposed Acquisition of DecTech
Conditional Placing of 8,000,000 Ordinary Shares at 137.5 pence to raise £11 million

GB Group, the identity intelligence specialist, is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of DecTech Solutions Pty Ltd, an Australian provider of fraud detection, credit risk management and customer management solutions for a total consideration of £20.5 million1.

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Trading update

  • In an update to the Pre-Close Trading Statement issued on 7th April the Board is pleased to report that GBGroup has achieved a stronger set of results than was estimated at that time, which will be ahead of market consensus. The Board now expects to show an adjusted operating profit† of approximately £7.2 million (2013: £5.5 million) representing a year on year increase of approximately 30%

Acquisition highlights

    • DecTech is a provider of established fraud detection and prevention solutions across multiple languages, clients and geographies where GBG does not currently operate
    • DecTech's software and solutions are used by many Tier 1, 2 & 3 banks around the world as well as powering the Korean fraud bureau
    • The acquired technology complements existing GBG solutions with real time analytics extending GBG's capabilities to new areas such as credit application support and ongoing transaction monitoring. It will also enable GBG to offer additional products and services to existing customers
    • DecTech has strong recurring revenues at circa 70%, high margins and is cash generative
    • The Acquisition is expected to be earnings accretive in the first full year post acquisition
    • The Acquisition is conditional upon Admission

Placing highlights

      • GBG intends to raise approximately £11.0 million before expenses through a placing by Peel Hunt of 8,000,000 new ordinary shares of the Company of 2.5 pence each at a price of 137.5 pence per share 
      • The Placing Price represents a premium of approximately 3.4 per cent. to the closing mid-market price of GBG's existing ordinary shares of 2.5 pence each on 23 April 2014, being the last practicable date before this announcement
      • The Placing Shares represent approximately 6.8 per cent. of the Company's issued share capital following Admission
      • Directors and senior management have subscribed for Placing Shares in total for approximately £505k
      • The Placing is conditional upon Admission

1 At an exchange rate of 1 GBP: 1.85 AUD

† Adjusted operating profit means profits before share of results from associates, interest, tax, share based payment charges, amortisation of acquired intangibles and exceptional items.

†† Adjusted Revenue

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During the previous financial year, GBG restructured its commercial relationship with BT which meant that ID Verification margins under the revised agreement are higher in absolute terms but revenues are reduced in the current financial year.   For ease of comparison, the revenue for the comparative period has been adjusted to show the true underlying growth.

Richard Law, GBGroup's CEO, commented, 

"We believe the acquisition and integration of DecTech into the Group will considerably enhance our ability to serve our clients globally by augmenting and broadening our product suite with highly complementary technology that is in demand in both established and developing markets.  This acquisition extends our capability and geographic reach and enables us to further address the growing requirements for highly customisable electronic identity verification and fraud detection services across both our customer bases and the wider market.

GBG's products and services are increasingly being used to enable some of the world's leading e-commerce businesses to trade online seamlessly and safely with their customers and this acquisition will help us to advance our strategy in this area.

I'm delighted to welcome the very talented DecTech team to GBG and I look forward to an exciting future for us all."
For further information, please contact:


GB Group plc
Richard Law, Chief Executive
Dave Wilson, Group Finance and Operations Director
01244 657333


Peel Hunt LLP (Nominated Adviser and Broker)
Richard Kauffer
Daniel Harris
Elliot Thomas
020 7418 8900


Newgate Threadneedle
Caroline Forde
Josh Royston
Heather Armstrong
 020 7653 9850

About GBGroup
The most profitable and successful organisations recognise the value of understanding the individual identity of their customers and employees. GBG combines this concept of identity with technology to create an environment of trust, so that organisations can employ people and connect, communicate and transact with consumers, safely and responsibly. 

We call this Identity Intelligence.

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Visit DecTech Solutions website >>