GB Group plc (GBG) Earnings Call Transcript & Summary

Good morning and welcome to GBG's 2022 Annual General Meeting. I'm David Rasche, Chairman of GBG's Board, and I've been appointed as Chair of this year's AGM. It is now 10:00 a.m., and I can report that a quorum is present. So I will open the meeting. I'm pleased to be able to welcome shareholders who are participating electronically as well as those present here in person today. Please may I ask those present in the room to switch off your mobile phones or to silent them to minimize interference during the meeting. Thank you. The AGM today is held as a hybrid AGM. My fellow directors, Chris Clark, Nick Brown, David Ward, Liz Catchpole, Natalie Gammon and Bhav Singh are in attendance at GBG's registered office in Chester. Our Company Secretary, Annabelle Burton; and [ Jemma McCloskey ], representing GBG's registrar, Equiniti, are also present. In a moment, I will read our trading statement, which was released this morning after which there will be an opportunity for shareholders to put questions to the Board. To allow maximum time to cast your vote today, voting on all resolutions will open now and will remain open for the duration of the meeting. The Board considers that the resolutions to be put to the meeting are in the best interest of the company and its shareholders as a whole. The directors unanimously recommend that you vote in favor of the resolutions as they intend to do so in respect to their own beneficial holdings. Voting today will be conducted on a poll and not on the show of hands. For those of you present in person, you can vote by completing the poll card provided a registration. Please ensure that you sign it and return it to the registrar. For those of you attending this meeting electronically, the voting options should now have appeared on your screen. For each resolution, would you please select the option corresponding with the way you wish to vote. Once you have voted, you will see a message on your screen below the resolution text confirming that your vote has been received and confirming how you have voted. If you have made the wrong choice or if you wish to change your mind, simply press the correct choice prior to the poll closing. If you wish to cancel your live vote, please select the Cancel option. For all shareholders present today, if you have already submitted your votes by proxy, you do not need to vote again today, unless, of course, you wish to change your previous instruction. The poll will remain open for the duration of the meeting and for 5 minutes following the conclusion of the meeting to allow sufficient time to vote. I will now read our trading statement. As reported in GBG's annual results announcement on the 16th of June 2022, GBG achieved strong financial results for the year ended 31st of March 2022. The group delivered record revenue and adjusted operating profit ahead of original market expectations. We also made important strategic progress organically through -- and through the acquisitions of Acuant and Cloudcheck. GBG addresses large and expanding markets, all of which are adapting to structural drivers such as digitalization and an ever-increasing need to protect against fraud. These are enduring trends, which give GBG a long runway of sustainable growth opportunities. The wide-ranging capabilities we've developed and acquired over recent years gives us a leadership position in the identity verification and fraud markets and reinforces our position as one of the largest pure-play identity software solution providers globally. The business is well placed to successfully achieve its strategic and financial objectives in financial year '23 and beyond. The benefits of our diversity in geography, sector and solution set are evident in our performance so far this year. As previously indicated, our identity business in the Americas faced tough comparatives from the first quarter of last year when we benefited from exceptional transaction volumes driven by amongst other items, the U.S. stimulus projects and cryptocurrency. The current year-to-date has benefited from favorable U.S. dollar translation, which on an underlying basis, largely offsets the impact of the more challenging macroeconomic conditions. Elsewhere, our location and fraud segments achieved solid underlying growth as did our EMEA and APAC regions. The breadth of our geographic coverage and the relevance of our identity and fraud solutions in different sectors and economic cycles means that despite current economic uncertainty, our Board continues to expect results for the full year to be in line with our expectations. The integration of Acuant into our Americas business has continued and the board is pleased that at least GBP 3 million of our planned synergy benefits for financial year '23 have already been implemented. We look forward to providing a further update to shareholders on our trading performance at the time of our pre-close statement -- sorry, pre-close trading statement in October 2022. Thank you. I would now like to invite questions in respect of all resolutions. Please note that only shareholders, their proxies or duly authorized corporate representatives are entitled to speak. For those of you present in person, if you wish to ask a question, please raise your hand. For those of you presently electronically, you can submit your question by clicking on the Question icon on the navigation bar within the Lumi platform. Type your question and click the Submit arrow. If you require further guidance, a copy of the user guide was made available in the notice of the meeting. I will now take any questions from those of you in the room that have them and revert to our Company Secretary, Annabelle Burton, to raise any questions that have been submitted by the virtual platform. Do we have any questions, ladies and gentlemen.

We have 2 questions via platform. The benefit -- in the virtual platform, I'm talking to the mic so we can hear. So the first question is, "I note that not all directors are up for reelection. Why is this not normal practice for public companies." Would you like me to answer that one?

I think that's you're the expert on that, Annabelle.

So whilst it is normal practice for main less companies that follow the U.K. Corporate Governance Code, GBG is an [ A-listed ] company, doesn't have the same level of requirements. That being said, we do have high standards of corporate governance. And this year, you will have noticed that we also have put up for election our new Chair who will be starting until September and we will continue to monitor our corporate evidence requirements in line with best practice. The second question that's come up on the part is, "what are or will be the performance conditions attached to the PSP awards", and there's a comment of being able to judge the merits of the proposals based on those awards. So I'll revert to Natalie.

Yes. Natalie is our Chair of [indiscernible].

We've worked extensively this year when developing our PSP with a number of remuneration consultants, including Deloitte and H2glenfern to ensure that we've followed best market practice. As with previous years, we've used the same framework for the performance conditions for the PSP. So 75% of the award is based off EPS performance and 25% of the award is based off TSR performance.

There are not further questions.

So I hope that answers the question. I suppose we can give a minute or so, Annabelle, if there's any other that come in or any clarification required. Okay. All right. Well, Natalie, thanks for helping out on that one. So now for the business of the meeting. Each of the resolutions are detailed in the notice of meeting dated the 29th of June 2022, and the accompanying explanatory notes. As such, I will take the notice of the meeting as read. Our 15 separate resolutions are set out in the notice of the meeting. As Chair of this meeting, I give formal notice that voting on each of the 15 resolutions will be conducted by a poll. Our registrar is Equiniti, have been appointed to conduct the poll. As Chair of the meeting, a number of shareholders have appointed me to vote their shares and directed me how to vote their shares when a poll is conducted. I now formally put each of the resolutions to the meeting. The detailed results of the poll will be announced to the London Stock Exchange later today and will also be published by the -- on the company's website. That concludes the formal business of the meeting, and I declare the formal meeting closed and to those online, thank you very much for joining. As we said at the beginning of the meeting, it remains open for 5 minutes for any further votes, and thank you very much for joining us. Goodbye.