GB Group — FY25 focuses on fundamentals over growth

GB Group (AIM: GBG)

Last close As at 11/06/2025

GBP2.48

1.50 (0.61%)

Market capitalisation

GBP617m

More on this equity

Research: TMT

GB Group — FY25 focuses on fundamentals over growth

GB Group’s CEO Dev Dhiman’s first full year has seen initiatives addressing the company’s foundations rather than its short-term growth. This is a necessary step if management are to optimise longer-term shareholder value. Accordingly, any share price disappointment regarding H225 and H126 growth rates needs to be set against the group’s increasing optionality around capital allocation and the reassurance of an unchanged FY26 financial outlook.

Written by

Dan Ridsdale

Head of Technology

Software

QuickView

10 June 2025

Price 271.00p
Market cap £687m
Price Performance
Share details
Code GBG
Listing LSE

Shares in issue

248.9m

Net cash/(debt) as at March 2025

£(48.5)m

Business description

GB Group is a UK company providing data intelligence products and services, including document, data and identity verification often used in Know-Your-Customer and anti-money laundering applications.

Bull points

  • Structural market growth due to increasing relevance of identity and location verification in an increasingly digital world.
  • Attractive revenue model, with c 95% repeatable revenues from transaction and subscription activity.
  • Global reach as the company has services in over 20,000 organisations in more than 70 countries.

Bear points

  • Macroeconomic uncertainty affecting transaction levels.
  • Challenging trading in the fraud prevention software business.
  • Growth headwinds from current exchange rates.

Analysts

Dan Ridsdale
+44 (0)20 3077 5700
Ross Jobber
+44 (0)20 3077 5700

EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.

Financials

FY25 revenues grew by 3.0% in constant currency (cc), or 1.9% on a reported basis to £282.7m. The Identity division (56% total) grew 3.1% (cc) to £159.0m, Location (30% total) grew 6.2% (cc) to £85.6m and Fraud (14% total) saw revenues fall 4.0% (cc) to £38.1m. Group revenue growth from new customers decreased from 4.6% to 3.7%, following large contracts in FY24. Subscription and consumption-based activity generated 94.5% of revenues (FY24: 94.8%), of which 55.7% (FY24: 57.5%) was generated from subscription contracts. FY25 gross margin was 70.0% (FY24: 70.1%) and adjusted operating profits rose 9.5% to £67.0m (FY24: £61.2m), a margin of 23.7% (FY24: 22.1%). Adjusted diluted EPS increased 14.9% y-o-y to 17.4p. Operating cash flow was £52.7m (FY24: £43.5m) and net debt as at end FY25 was £48.5m (end FY24: £80.9m).

Strategy

A focus on global alignment, performance culture, reducing complexity and further innovation is preparing GB Group as a future platform for growth, which is expected to accelerate over the coming years. The transformation is not complete but the steps taken, combined with efforts to convert customers from consumption to subscription models, should improve not only the quantity but most importantly, the quality of the group’s future growth profile. Such initiatives require investment and it is encouraging that the progress made to date now gives management optionality regarding capital allocation.

Valuation

Volatile financial performance and a lack of peers makes analysis challenging and valuation levels look full. It is true that on conventional multiples GB Group might seem to have limited upside in the short term. That said, such approaches work less well in times of rebuilding. Instead, longer-term investors should look for value in the quality of earnings that arise from GB Group’s improving cash generation and strengthening capital base.

Source: LSEG Data Analytics. Note: EBITDA and EPS stated after adjustment for restructuring charges, share-based payments, impairments and amortisation of acquired goodwill.

Consensus estimates

Year end Revenue (£m) EBITDA (£m) EPS (p) DPS (p) EV/EBITDA (x) P/E (x) Yield (%)
3/24 277.3 63.8 15.10 4.20 11.5 17.9 1.5
3/25 282.7 68.9 17.40 4.40 10.7 15.6 1.6
3/26e 284.5 69.0 18.80 4.60 10.7 14.4 1.7
3/27e 297.9 74.0 21.00 4.80 9.9 12.9 1.8

General disclaimer and copyright

This report has been prepared and issued by Edison. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright 2025 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or sol icitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on GB Group

View All

Latest from the TMT sector

View All TMT content

Research: Industrials

PORR Group — The niche high-end contractor that delivers

PORR Group is domiciled in Austria with a business focused on solid-margin, niche markets such as data centres, infrastructure and specialist applications. Geographically, it targets markets with strong contractor protections, reliable customers and local resources that enable it to complete projects on time and to the highest standards. Over the past 20 years, PORR has delivered a stable EBIT margin of 2.0–3.3% in all but four years and a top-line CAGR of 7.2%.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free