StockMarketWire.com - CPPGroup reports a robust first half performance with an underlying operating profit of £2.2m (H1 2014: breakeven) partly reflecting the on-going control of the cost base.

Group revenue from continuing operations fell to £45.2 million (H1 2014: £58.7 million) but it said the annual renewal rate has improved to 73.2% (31 December 2014: 71.4%), reflecting the value customers continue to place on its products.

The group said underlying operating profit, which excludes exceptional items and Matching Share Plan (MSP) charges, has improved largely as a result of the actions taken in 2014 to reduce the cost base and one-off benefits relating to Airport Angel, which offset the profit impact of declining revenue. The underlying operating profit margin has therefore increased to 4.8% (H1 2014: breakeven). Exceptional items are a credit of £18.9 million (H1 2014: charge £0.3 million) which comprises; a gain from the compromise of the commission deferral agreement, net of associated costs, of £19.4 million; and restructuring activities, mainly in Spain, of £0.5 million.

The exceptional items, along with the MSP charges of £0.3 million contribute to a reported operating profit of £20.7 million (H1 2014: loss £0.3 million). Profit after tax from continuing operations is £17.1 million (H1 2014: loss £1.9 million) and underlying profit after tax, which excludes exceptional items and MSP charges, is £0.4 million (H1 2014: loss £1.7 million).

Chief executive Stephen Callaghan said: "CPP has made significant progress in the first half of 2015. Securing new equity funding and restructuring of the Group's debt has provided the business with a stable financial platform, and the business has delivered an improved profit performance underpinned by our on-going focus on costs.

"There is much work to do for the Group to realise its growth ambitions, however we are seeing encouraging progress from the actions we are taking to improve our financial performance. We expect to make further progress during the remainder of 2015 and, looking to next year, our current view is that the Group's underlying operating profit will be materially higher than the previous expectations set for 2016.

"CPP is going through a significant transition. We are in the early stages of the Group's transformation plan and the team at CPP has clarity of purpose, a focused approach, and well-defined accountability. As the Group looks to the future, we know what we have to do and understand the importance of maintaining momentum in the delivery of our plans to ensure we achieve a strong, sustainable and profitable future."







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