After turbulent year and CEO change, FY Results guided to be "materially ahead of expectations"
CPP Group (AIM: CPP) has experienced a turbulent year after one of its key shareholders, Schroders, ousted the previous Management back in May. The new executive team, led by Jason Walsh, has today announced that Full Year underlying operating profit is expected:
"to be materially ahead of the expectations detailed in the Interim Results"
This good news has led the share price to rally strongly of its lows, as detailed below.
One caveat I need to raise however is the mention of the expectations detailed in the Interims. Maybe I've missed it, but looking back at the announcement last August, I'm struggling to find any detail about expectations for the full year results. Perhaps these expectations were detailed in a previous announcement but it would have been helpful to reiterate what these expectations were. Otherwise, it makes quantifying the change and the possible impact of valuations a lot more tricky.
Today's announcement goes on to mention that "CPP continues to negotiate an agreement with SSP Limited and will provide an update on the final outcome in due course". This follows its announcement back in September that it will be ending its agreement with it IT partner (SSP) and instead building an in-house team. The continuing negotiation appears to be concerning the size of the "cash payment that is currently being finalised with SSP". It is worth flagging that until the agreement has been reached, this is a source of uncertainty for the Group.
Shares had fallen 66% over the previous 12 months but this morning rallied 38% from its lows as the market welcomed the first signs of positive change.