CPPGroup Plc Disposal of German card protection legacy business (9082Y)
May 18 2021 - 1:00AM
UK Regulatory
TIDMCPP
RNS Number : 9082Y
CPPGroup Plc
18 May 2021
18 May 2021
CPPGroup plc
("CPP" or "the Group")
Disposal of German card protection legacy business
CPP Group (AIM:CPP), the multinational product and services
company which specialises in the financial services and insurance
markets, is pleased to announce that it has completed the sale of
CPP Creating Profitable Partnerships GmbH ("CPP Germany"), the
Group's German card protection legacy business, to Deutsche
Schutzbriefgesellschaft GmbH ("Mehrwerk"), the value-adding
specialist in German-speaking banking, retail, leisure and other
sectors ("the Disposal"). Total consideration in respect of the
Disposal has been agreed at GBP2.3 million(1) which, after
adjustment for working capital, will result in the Group receiving
cash proceeds of approximately GBP2.2 million(1) before transaction
costs.
Rationale and use of proceeds
The Disposal is in line with the Group's commitment to
maximising value from its assets and focusing on the areas of the
business that have the strongest prospects for delivering
sustainable and profitable medium to long-term growth.
In line with the Group's capital allocation priorities, the
proceeds will be used to strengthen the Group's working capital
base, provide additional financial flexibility to deliver its
growth strategy, and ultimately enhance returns for
shareholders.
CPP will retain a presence in the German market managed through
its UK operation, continuing to offer innovative, digital-led
products to meet demand from its business partners in the market.
This includes the potential for further distribution arrangements
via Mehrwerk.
Background
CPP Germany is a non-core book of card protection business that
was placed in runoff, which included closure of the company's
operation in Hamburg, following a strategic decision to restructure
the Group's EU markets in 2018.
CPP Germany accounted for GBP1.1 million of the GBP8.1 million
contribution to Group EBITDA from the Group's Ongoing Operations in
2020. The impact of the Disposal will therefore be to reduce the
revenue and profit contribution of that operating segment in the
future. As at the date of the sale, the unaudited net liabilities
being disposed of are approximately GBP0.8 million.
Terms
The sale and purchase agreement contains warranties and
indemnities by the Group usual for a transaction of this nature and
an agreement that the Group will refrain from any activity in the
card protection market that places it in competition with Mehrwerk
in Germany and Austria for a period of two years. The Group has
granted Mehrwerk a five-year licence to use the CPP name for
marketing and the provision of CPP Germany's existing services.
(1) Approximate as subject to currency exchange movements
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the
publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Enquiries:
CPP Group plc via Alma PR
Jason Walsh, CEO
Oliver Laird, CFO
Sarah Atherton, Group Company Secretary
Liberum Capital (Nominated Adviser & Sole Broker) +44 (0)20 3100 2000
Richard Lindley
Lauren Kettle
Kane Collings
Christopher Whitaker
Alma PR (Financial PR Adviser) +44 (0)20 3405 0205
Josh Royston cpp@almapr.co.uk
David Ison
Kieran Breheny
About CPP Group:
CPP Group takes away many of the stresses and strains of daily
life for millions of people across the globe. In collaboration with
selected partners in each country in which the Group operates, it
develops, aggregates, offers and supports a range of personal
protection and insurance products, which are sold alongside, or
packaged with, the core product offerings of the Group's partners.
CPP is listed on AIM, operated by the London Stock Exchange.
For more information on CPP visit
https://international.cppgroup.com/
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