The AIM-listed firm is expecting a 27% increase in adj operating profit and 19% rev growth
Companies: GB Group PLC
Identity management specialist GB Group upgraded its earnings forecast on Wednesday, saying it was now expecting adjusted operating profit to be ahead of market consensus in its full-year results in June.
The Chester-based small-cap told investors that adj operating profit is likely to be £17m, a 27% increase on the £13.4m reported last year, ahead of market consensus, with revenue up 19% overall and 12% organically, slightly lower than expected.
Broker finnCap said the firm had delivered a strong H2 margin performance, which was assisted by acquisition, to see FY 2017 earnings come in ahead of market consensus:
"FY adj. operating profit will be £17.0m compared with just £5.2m in H1, leading us to upgrade our adj. PBT and FD EPS forecasts from £16.0m and 9.8p, respectively, to £16.5m and 10.2p. EPS is based on a nominal tax rate; the actual tax rate is likely to be lower."
Speaking about the Company's valuation, analyst Lorne Daniel said:
"The share price has stalled at around 300p since the concerns arose over the UK government verification service, and the market waited for the change of CEO. However, earnings and cash generated have continued to grow and the group looks undervalued given the growth rate."
CEO Chris Clark said he was looking forward to the new year, working to deliver sustainable growth and shareholder value creation:
"I would like to congratulate and thank the team at GBG, our customers and partners for helping us achieve this result. I look forward with confidence to the new year; working with our great team and customers to continue to deliver sustainable growth and shareholder value creation."
Shares in GB Group rose c.4% early on Wednesday, continuing the 16% rally since the beginning of April.
