CPP increases profits despite FSA probe

In March, York-based CPP revealed that the FSA was investigating “alleged failings” in its sales calls for its credit card and identity theft products. CPP has suspended sales of its ID theft products but insisted it has not misled customers. CPP, which employs around 1,000 staff in York, raised £150m through a London listing last year. In the six months ended June 30, the company’s profit after tax grew by 35 per cent to £15.9m. Underlying profit after tax, which excludes legacy scheme share based payments and accelerated amortisation of capitalised issue costs on refinancing of bank debt at the time of the company’s flotation, has grown by six per cent to £16.5m. Group revenue has grown by 10 per cent for the half year to 172.1m. Eric Woolley, the chief executive, said: “The group delivered another good revenue performance in the first half of 2011, albeit that costs and lost revenues as a result of the ongoing FSA investigation in the UK have impacted profitability. “Our international businesses continue to develop well, and it has been particularly pleasing to see such a strong performance in the US during the first half as we deepen important business partner relationships with the successful delivery of new campaigns. Our newer markets, which offer significant longer term potential for the group, are also progressing very well and plans are well advanced for our launch in Brazil, a large and developing market that we believe holds substantial growth opportunities for CPP’s life assistance products. “While the continuing uncertainty resulting from the FSA investigation is unwelcome and the timeframe to conclusion remains unclear, I remain confident that we have excellent life assistance products, which fulfil a significant and growing need in our society, and a sound business model around which we aim to continue to grow both in the UK and internationally.” In a statement regarding the FSA probe, the company said: “As previously announced on March 28 2011, we decided to suspend new sales of identity protection through our UK voice channels in response to discussions with the FSA, and one of our business partners, Barclaycard, also suspended new sales to their customers through the call to confirm channel. Operating margins have also been adversely impacted by the associated costs and lost sales.”