GB Group PLC shares surged on Thursday after it reported ‘excellent progress’ during its first half due to increased efficiency, although it expects revenue and operating profit to be lower than last year.

GB Group shares were up 11% at 239.80 pence in London on Thursday morning.

The Chester, England-based software company expects to report about £132.4 million in revenue for the six months ended September 30, down from £133.8 million the prior year. GB said this represented 1.8% growth in constant currency, and noted the impact of declining revenue from cryptocurrecy customers.

GB, which specialises in digital location, identity verification and fraud prevention software, said its Fraud division achieved low double-digit revenue growth thanks to new business wins and important contract renewals.

Location meanwhile delivered constant currency revenue growth in the high single digits due to new partnerships, customer wins and upsell activity.

Identity revenue decreased by approximately 3% in constant currency, although it was ‘broadly flat’ excluding the above-mentioned decline in cryptocurrency business. However, GB said monthly transaction volumes have stabilised as expected, and that it anticipates revenue growth ‘in the latter part’ of the year ending March 31.

GB said its gross margin decreased to about 69.2% from 71.1%, although its adjusted operating margin excluding foreign exchange gains increased to 17.7% from 16.4%.

Excluding FX gains, adjusted operating profit increased to about £23.4 million from £21.9 million. However, total adjusted operating profit decreased to approximately £23.7 million from £28.1 million.

GB said it made ‘excellent progress’ in the period to ‘drive simplification’, with operating costs decreasing by around £6 million ‘despite inflationary pressure’.

‘The ongoing focus on simplicity and efficiency underpins the board’s confidence that GBG will deliver its FY24 profit expectations,’ the company explained.

Copyright 2023 Alliance News Ltd. All Rights Reserved.