GB Group plc

Hello everyone, and thank you for joining us today for the GBG first half results for fiscal year 2026. My name is Sammy and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad to remove yourself from the question queue. I'll now hand over to your host, Dev Demon, to begin. CEO to begin. Please go ahead, Dev.

Good morning everyone and welcome to the GBG results announcement for the first half of fiscal year 26. We're pleased with the progress that we've delivered in the first half of the year. We're on track to meet our financial plan for FY26 and we're confident in the acceleration that we'll see in the top line growth as we enter H2 and beyond. Whilst today is a chance for us to take you through the financial results, it's also a chance for us to remind you of the impact GBG has on the world at large in how we enable safe and rewarding digital lives for genuine people everywhere. The slide on the screen here speaks to that impact and the scale at which GBG operates, and I'm really proud at the mission that drives every one of Team GBG to show up and give more every day of the week. The statistics on this slide also serve to remind us all that the majority of the GBG business continues to perform strongly. However, we are very clear as to where the acceleration will come from from here. 18 months ago, you heard me talk about the need for us to focus on four foundational areas. I'm really pleased with the progress we've made on each of these, whether that's in the way we've come together as a single global brand to remove complexity, Whether that's how we've now recently signed to migrate our entire cloud to AWS to make sure we are globally aligned. Whether that's the launch of GBG Go in April, driving our innovation agenda. Or whether that's the way we've rebalanced and reworked our entire performance frameworks for our people. We feel like a lot of the heavy lifting on these four areas are done and therefore our attention is now firmly turning towards driving shareholder value, in particular through accelerating the top line. So how will we focus on creating shareholder value? We'll focus on four key areas. The first is around protecting and growing our amazing customer base. The second is about winning more new logos, more customers that need to work with GBG. Thirdly, we will unlock synergies in the GBG operating model. We've made some good progress on being globally aligned and removing complexity, but we think there's even more we can do, not just to drive efficiencies, but also to drive top-line growth. And lastly, following a period of really hard work to get our balance sheet into a much stronger position, we'll talk about how we will optimise capital allocation. In my section, I'm going to focus on how we will drive revenue and unlock synergies. David will come back to talk about how we'll optimise capital allocation in his section. The good news is, underneath those key pillars, there are really only three things that matter. The first is how we complete the turnaround of our America's business. The second is how we transition to the GBG Go platform. And the third is how we evolve our operating model to better serve customers, to innovate more quickly, and to drive efficiencies that we can then redeploy into go to market. So let's start with I'm sure what's on all of your minds, the Americas, and where we're at with the turnaround. When I spoke to you six months ago, I talked about how we needed to strengthen the leadership team, Execute the turnaround by driving productivity and focusing on metrics. Evolve our commercial model away from pay as you go towards subscriptions and commitments. To lead with the GBG brand and to focus our teams on long-term growth and not distract them with short-term headaches. So where are we up to? So when it comes to our leadership team, in the first half of this year, we have appointed six new leaders. And it's important to stress those leaders come with deep industry experience. These are not people figuring out how to do this for the first time. Some of the measures that give us confidence that we're on pace for the turnaround. In the first half of this year, we've driven four times more new business than we did in the first half of last year. And we're activating that new business more quickly. We're 28% faster in taking a deal from signature to go live and ultimately when we start to earn revenue. In terms of our commercial model, standout progress with eight renewals in the second quarter signed with a minimum commitment. Almost the first time we've done that as a business. More encouragingly, as we look ahead, 74% of our upcoming renewal pipeline contains minimum commitment that's already been socialised with the customer. In terms of leading with the brand of GBG, you can see on the page a screenshot of the team at Money 2020 where we showed up as one team. That wasn't just America's Identity, it was also the GBG Locate business showing up alongside our America's Identity colleagues, really turning up as one business, as GBG. And then lastly, as we focus on long-term growth, we took the decision this year to sunset a legacy platform, one that was creating significant distraction for the team and one that was never going to get our business to be a stronger underlying one, which is our complete intent as to how we focus on making decisions that drive the America's business forward. Turning now to GBG Go and our transition to a platform business. At the end of FY25 in our results presentation, you saw me demonstrate the benefits of Go for our customers, but today I want to focus on the benefits of Go for GBG. We are confident that Go will increase the pace of our growth through the ability to win new customers. That momentum will build confidence in our teams and accelerate the opportunity to upgrade existing customers, driving cross-sell and up-sell. Go is an adaptive platform. It's built for what's to come. It will meet evolving customer needs and drive advocacy and also improve NRR. From a technology perspective, Go enables us to rapidly innovate, build wants and scale globally, releasing new capability to customers at the flick of a switch. The outcomes of our focus on Go will be accelerated growth, sustainable differentiation and a platform that unlocks efficiencies at GBG as we focus on one and not 16. And lastly, let me talk about how we will evolve and transform the GBG operating model. Really, there are three flavors to this initiative. The first is how we move to a functional organizational structure. Again, we've talked about the need for GBG to be simple and to align globally. And this is about taking that and ensuring it's embedded in our DNA. It enables us to ensure that we prioritize the key initiatives because we're now prioritizing across the whole portfolio and not by business unit or segment. And obviously it reduces costs and duplication, which enables us to reinvest into our key initiatives, largely our go-to-market function. The second flavour of this initiative is how we innovate at a scale that we've not done before. By investing in a GBG-wide innovation system, we will deliver on the opportunity to combine all of the assets that we have in the GBG shop to create powerful new solutions for our customers. And lastly, this is also about driving improvements in our go-to-market. As a business, the majority of our revenue comes from about 15% of our customers and we need to focus on those customers differently and treat them as GBG customers, not as identity or location or fraud. We believe our focus in this area is a meaningful revenue accelerator, and by increasing singular ownership of our largest accounts, we'll be hardwiring CrossSell into pay plans and the targets that we set to our salespeople, no longer relying on collaboration and lead sharing across teams. So what does all of that mean? It means that we are really clear on the three priorities that will make our boat go faster. And this is already turning into tangible benefits in the first half with more to come in H2 and beyond. So let's just give some of the key highlights. So driving the America's turnaround. Year to date, we are on pace. We've got encouraging early proof points. I've spoken about those just now. And in the second half, you should expect the America's business to return to growth by our continued focus on driving go-to-market execution and further improving some of the metrics I've spoken about. GBG Go and our transition to the platform. We launched the platform in April. We've had 18 new customer wins in the first half and we've also integrated 200 digital identity schemes into the platform which those 18 customers now have access to. In terms of what's ahead, we have a very strong sales pipeline which we will execute in the second half. From a capability standpoint, next on the roadmap is our no-code release, and also really excitingly, our AI-driven insights module. Unlocking synergies in the GBG operating model. In the first half, we have signposted a move to a global functional operating model. We have already combined our product and technology teams under single leadership, and we have created and funded the GBG Innovation Lab. In the second half, we'll continue the move to a functional model. The next phase is really focused on our go-to-market teams, and we'll continue to find efficiencies to reinvest in our key priorities. And lastly, how we'll optimise capital allocation. After a period of really hard work in getting our balance sheet into a much stronger place, GBG is now returning to optionality in how it deploys its free cash flow. In the first half of the year, we executed £35 million in share buybacks and we completed the first acquisition of this management team with the integration of Data Tools in Australia, a business that we've worked closely with for a number of years and made huge sense strategically and financially. And as we look ahead to H2, this morning we've announced a further £10 million buyback as we continue to deploy our free cash flow to drive growth and shareholder returns. With that, I'm going to pass to David to take us through the financial results.

Thank you, Dave, and hello and good morning, everyone. Thank you for joining us. I will now take you through a more detailed review of GBG's financial results for the six-month period to 30 September 2025. We are pleased that the results we delivered in the first half of this financial year are in line with the plan that we built for this year and represent the operational progress that we are making towards an accelerating top line. We delivered revenue of £135.5 million, which represents growth of 1.8% in constant currency terms. Setting aside two short-term impacts that were fully anticipated and which I will explain more shortly, constant currency growth on an underlying basis was 4.4%. This illustrates the improving momentum that we have already generated and which underpins our confidence in delivering a similar level of revenue growth in the second half of this year. Adjusted operating profit, also on a constant currency basis, increased 4.6% to £29.5 million, reflecting our continuing cost control and profit margin control. Cash conversion remained strong at 85.8%, leading to a net debt to EBITDA ratio that remained below one times at £66.6 million. And demonstrating the Board's confidence in our plan, we have in FY26 already before today committed a total of £46 million in shareholder returns. And as Dev has already outlined, we have today announced a further £10 million of share buyback. I can confirm that we are today reiterating our financial outlook for the full year, which is in line with consensus. So now let me provide an overview of the income statement, here presented on an adjusted basis, with the statutory format included as an appendix to this presentation. The headline is that we have maintained our strong control of margin, while at the same time we have recycled cost savings from our ongoing transformation to a single global platform business into our growth-focused priorities, specifically for our largest segment of identity. On a reported basis, revenue declined by 1% to £135.5 million, but in constant currency terms increased by 1.8%. Our gross profit margin improved by 40 basis points over the prior year as we continue to focus on pricing as well as disciplined management of our data and cloud hosting costs. Adjusted operating expenses reduced by 1.5% This too was impacted by FX translation and on a constant currency basis operating expenses increased by just 1.1%. That led to an adjusted operating profit of £29.5 million which represents an increase over the prior year of 4.6% in constant currency terms. As expected our net finance cost decreased over the prior year as a result of the lower average level of net debt. And on tax, our effective adjusted tax rate for the period was 23%, which is a little lower than the 25% that we still expect for the full year due to accounting timing differences. As a result of the combination of the growth in adjusted operating profit, the reducing finance costs and tax charge, adjusted diluted earnings per share increased by 12.6% over the same period last year. As I said in my last presentation of our FY25 full year results, we planned to continue with our business transformation initiatives, and the costs associated with a few of the larger discrete items have been recognised as exceptional costs. These included the costs incurred in the period on our business systems unification and data insights projects, as well as the costs of our move from AIM to the main market. The total cost recognised in the first half was £3.6 million. Across the next two slides, I have more detail and analysis to explain the key dynamics behind our revenue performance. As I have already said, on a reported basis, revenue declined by 1% to £135.5 million, but in constant currency terms increased by 1.8%. That 1.8% was impacted by two short-term factors that we feel has somewhat masked the progress we have made in building greater momentum. The first of those two factors is the fully expected impact of high project-driven transaction volumes for Santander UK in the first half of FY25. And the second is a decision we have taken to retire one of our legacy technology platforms as part of the Americas turnaround. As you can see from the bridge chart on this slide, without those impacts that both relate to our identity segment, the underlying growth in the period was 4.4%. We feel it is important to share this sign that we have generated improved revenue momentum, and also, most importantly, because delivery of our plan for the full year assumes that we will continue to grow at approximately this same rate in H2, when there is no headwind from the Santander volumes and the headwind from the platform retirement is much smaller. My last comment on this slide is that we continue to enjoy a high proportion of repeatable revenue at 95% of our total, and we have a clear focus, as you have already heard from Dev, on increasing the 54% of that which comprises subscription revenues. We now move to our rolling 12-month metrics, and a reminder that these cover our two core segments of identity and location, covering 93% of the total group revenue. Global Fraud Solutions, our smallest segment, is excluded. It's pleasing to see the strong growth from new logo wins, with this increasing to 4.1% for the last 12 months. This was assisted by a couple of larger wins with enterprise customers in the location segment. We continue to see opportunity for us to maintain a growth rate of 3-4% from this vector, particularly as we make progress in closing the strong sales pipeline we have for GBG Go. Net revenue retention at 30th September was a little lower at 97.8%, but this was impacted by the short-term factors that I have already mentioned and which affected our identity growth rate. Excluding these, the trend for net revenue retention has been holding quite steady at around 100%. We continue to see improvement in net revenue retention as our largest opportunity for driving an overall growth rate improvement. And Dev has already outlined a number of initiatives that we are prioritising to get net revenue retention back sustainably above 100%. Moving on to how each of our reporting segments performed. Identity, which represents 63% of total group revenue, grew 0.4% in constant currency terms and broadly maintained a consistent contribution margin. We generated strong growth in APAC and EMEA, although of course the EMEA growth was impacted by the unusually high Santander volumes in the prior year. While we had a small decline in revenue in Americas, we have been pleased with how the business is generally much more stabilised and gross retention has improved. The turnaround project has the highest level of focus and the momentum we carry into H2, together with the improved sales pipeline, we have confidence that this important component of our business will return to growth in the second half of the year. And Dev has already mentioned the encouraging early signs for GBG Go. Setting aside the two short-term factors that affected the first half, and the comparative period from the last financial year, there is a trend for an improving growth rate in identity. Location, which represents 30% of total group revenue, continues to be the main growth engine for the group, with constant currency revenue growth of 4.8% in H1. That was despite some tariff-related softness in Q1. In terms of notable customer activity, we were pleased with our wins at Urban Outfitters and Alibaba, and our scaled-up renewals at Shein and TalkTalk. Growth via our partner channel continues to be strong with customers like Oracle, and similarly large enterprises like Microsoft are also recognising the value of GBG's market-leading global addressing data for use in their own data quality processes. And finally, our smallest reporting segment of Global Fraud Solutions, which represents 7% of Group. In this business, we are continuing to see very strong customer retention and subscription renewals, including the logos included on this slide. New business and the related implementation services has been a little bit weaker than a couple of years ago, and overall we are reporting 1.4% growth. The contribution margin from the segment has expanded considerably as a result of the strategic review undertaken last year, and which has led to some material cost reduction, which allowed investment to be redirected to our highest priorities of America's go-to-market and the continued advancement of GBG Go. And then finally, and before I hand back to Dev for some closing remarks, a few comments on the balance sheet and capital allocation. As I said in our last year end presentation back in June, with our debts leverage coming into this year comfortably below one times EBITDA, we did feel that for the first time in a while we had a greater degree of optionality on capital allocation. And so we have been proactive in utilising that optionality to drive improved shareholder value. Firstly, of course, we paid the final dividend declared in respect of the previous financial year. And we have been continuing with our investments via exceptional items into our transformation initiatives and the costs of our move up from AIM to the main market. We are confident that these initiatives will achieve strong returns for shareholders. We have also announced two share repurchase programmes prior to today, the first ever in GBG's history. Those totalled £35 million. Including the £10 million that we have announced today, we have committed to share repurchases totalling £45 million. With £17 million of this completed in the first half of the year and a further £28 million now committed to be completed by the end of the financial year. Given the share prices that we have been executing these programmes at, we expect that in total we will have repurchased approximately 7% of our issued share capital, and this should drive EPS accretion on a fully annualised basis of close to 4%. And finally, we were very pleased that we were able to add the data tools business and team into the group. This was a financially attractive bolt-on opportunity to acquire a business that was known to us and which will add additional scale in a market where we are already seeing strong growth. Based on these capital allocation decisions that we have taken so far this year, we still currently expect to be able to exit this financial year with a net debt to EBITDA ratio of approximately 1x. With that, that concludes my section. Now back to you Dev for some closing remarks.