GB Group — H123 performance masks strategic progress

GB Group (AIM: GBG)

Last close As at 18/06/2024

324.60

9.80 (3.11%)

Market capitalisation

GBP813m

More on this equity

Research: TMT

GB Group — H123 performance masks strategic progress

GB Group (GBG) reported a mixed performance in H123: strong growth in its Fraud and Location businesses was offset by weaker performance in the Identity business resulting in pro forma constant currency revenue growth of 3.4% y-o-y. Cryptocurrency headwinds and slowing economic growth drive downgrades to our Identity revenues and normalised EPS forecasts. Integration of Acuant is now complete and GBG is showing early signs of leveraging Acuant’s products and technology across the group.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

GB Group

H123 performance masks strategic progress

H123 results

Software and comp services

1 December 2022

Price

324.2p

Market cap

£817m

$1.20:£1

Net debt (£m) at 30 September 2022

132.6

Shares in issue

252.0m

Free float

94%

Code

GBG

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(14.7)

(27.5)

(57.9)

Rel (local)

(20.2)

(29.8)

(59.1)

52-week high/low

749.5p

324.2p

Business description

GB Group is a specialist in identity data intelligence. Its products and services enable its customers to better understand and verify their customers and are used across a range of fraud, risk management, compliance and customer on-boarding services. With headquarters in the UK, GB operates across 17 countries, has customers in more than 70 countries and generates more than 64% of revenues internationally.

Next events

Capital Markets event

19 January 2023

Analyst

Katherine Thompson

+44 (0)20 3077 5730

GB Group is a research client of Edison Investment Research Limited

GB Group (GBG) reported a mixed performance in H123: strong growth in its Fraud and Location businesses was offset by weaker performance in the Identity business resulting in pro forma constant currency revenue growth of 3.4% y-o-y. Cryptocurrency headwinds and slowing economic growth drive downgrades to our Identity revenues and normalised EPS forecasts. Integration of Acuant is now complete and GBG is showing early signs of leveraging Acuant’s products and technology across the group.

Year

end

Revenue
(£m)

Adj. op. profit* (£m)

PBT*
(£m)

Diluted EPS*
(p)

DPS
(p)

P/E
(x)

03/21

217.7

57.9

56.7

22.4

6.4

14.5

03/22

242.5

58.8

57.1

20.2

3.8

16.1

03/23e

292.9

67.3

60.6

18.0

4.0

18.0

03/24e

320.3

74.6

68.6

19.9

4.3

16.3

03/25e

352.8

82.3

77.7

22.4

4.6

14.5

Note: *Adjusted operating profit, PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Mixed performance in H123

For the Identity business, cryptocurrency and internet economy customer weakness weighed on H123 pro forma constant currency revenue growth, whereas Location and Fraud generated double-digit constant currency growth. Adjusted operating profitability was held back by higher operating cost growth due to wage inflation, H222 investments, currency translation and the addition of Acuant and Cloudcheck cost bases. Acuant integration was completed during H123 and the company is now looking to drive growth back up to the levels originally targeted when it was acquired. Initial positive indications include cross-selling into EMEA and APAC and the use of Acuant’s orchestration technology in GBG GO.

Estimates revised down

Management expects mid-single digit pro forma constant currency revenue growth and a higher operating margin in H223. We have revised our forecasts to reflect H123 divisional performance, the weakening of the US dollar since the end of H123, and higher interest and tax rates. We have also taken a more conservative approach to growth in FY24 and FY25 due to current macroeconomic uncertainty, reducing our normalised EPS forecasts by 10.2% in FY23, 11.6% in FY24 and 12.5% in FY25.

Valuation: Long-term growth the driver

On our revised forecasts, GBG is trading on a P/E of 18.0x FY23e and 16.3x FY24e, the lowest level for more than five years. As GBG trades through H223 and gets better visibility over underlying growth and Acuant revenue synergies, it should be able to provide confidence that FY23 estimates are achievable and that Acuant is delivering on its promise. Our reverse discounted cash flow (DCF) implies that the share price is discounting revenue growth of c 4.3% from FY26, well below the double-digit growth rate GBG consistently achieved up to FY22.

Review of H123 results

GB Group reported H123 revenue and adjusted operating profit in line with its October trading update. Revenue growth of 22.6% benefited from the Acuant and Cloudcheck acquisitions and favourable currency translation from US dollar to sterling. Pro forma underlying revenue growth was 10.4% y-o-y (treating acquisitions made in FY22 as if they were owned for the full year and excluding several one-off sources of revenues last year) and pro forma underlying constant currency revenue growth was 3.4%. Exhibit 1 shows how these growth measures have been calculated.

Exhibit 1: Revenue bridge H122 to H123

Source: GB Group

Gross margin benefited from a favourable product mix. Adjusted operating profit increased only 1% y-o-y: operating expenses were 52% higher y-o-y because of acquisitions (+28%), wage increases (c 6.5%), the impact of translating dollar-based expenses to sterling (+8%) and the effect of investments made in H222. Headcount was flat at end-H123 versus end-FY22. Reported operating profit included amortisation of acquired intangibles (£21.3m), share-based payments (£2.7m) and exceptional costs relating to acquisitions and restructuring (£1.5m). Net finance costs increased due to the loan taken out to acquire Acuant a year ago. The effective tax rate of 26.4% was higher than the FY23 guided range of 23–24% due to US tax charges related to R&D investments. End- H123 net debt (including unamortised loan arrangement fees) of £132.6m increased from £107.0m at the end of FY22, with £22.3m of the difference due to translation of US dollar-denominated debt to sterling (rate end-FY22: $1.31:£1, rate end-H123: $1.12:£1).

Exhibit 2: H1 results highlights

£m

H123

H122

y-o-y

Revenues

133.8

109.2

22.6%

Gross profit

95.1

76.9

23.6%

Gross margin

71.1%

70.5%

0.6%

Adjusted operating profit

28.1

27.8

1.0%

Adjusted operating margin

21.0%

25.5%

-4.5%

Reported operating profit

2.5

14.8

-83.0%

Reported operating margin

1.9%

13.6%

-11.7%

Normalised dil. EPS (p)

7.3

10.9

-33.0%

Reported basic EPS (p)

(0.3)

5.7

-105.3%

Net cash/(debt)

(132.6)*

39.5

-435.7%

Source: GB Group. Note: *Includes £857k of unamortised loan arrangement fees.

Exhibit 3: Divisional H1 performance

£m

H123

H122

y-o-y

Constant currency pro forma growth

Revenues

Fraud

18.3

15.5

17.9%

14.4%

Identity

81.2

63.7

27.4%

-1.4%

Location

34.4

29.9

14.9%

10.4%

Total revenues

133.8

109.1

22.6%

3.4%

Adjusted operating profit

Fraud

4.1

4.9

(15.1%)

Identity

23.3

28.1

(17.1%)

Location

12.0

10.7

12.4%

Unallocated

-11.4

-15.9

(28.3%)

Total adjusted operating profit

28.1

27.8

1.0%

Adjusted operating margin

Fraud

22.7%

31.5%

-8.8%

Identity

28.7%

44.2%

-15.4%

Location

34.9%

35.7%

-0.8%

Total adjusted operating margin

21.0%

25.5%

-4.5%

Source: GB Group

Location: reported revenue growth of 14.9% y-o-y or 10.4% in constant currency. The adjusted operating margin was marginally lower than a year ago at 34.9%. While some e-commerce customers generated lower volumes than last year, this was compensated for by successful upselling and selective price increases (with more to come in H223 as customers renew their contracts). New customer wins during H123 included Klarna and Wise (both already Identity customers), Sonos, Pepsi, New Balance and Shoplazza. The company noted that the latest version of its location intelligence product uses an artificial intelligence parsing engine that can improve match rates by up to 20%. In a recent competitive tender for a buy now, pay later company, GBG beat the incumbent with 23% better match rates.

Fraud: reported revenue growth of 17.9% or 14.4% in constant currency. Adjusted operating margin declined 8.8% to 22.7%. The division saw new customer wins (Union Bank of the Philippines, PNB Malaysia, Banque Marocaine and the UK Department for Work and Pensions) and important renewals with financial services customers in APAC and EMEA. The business developed a fraud data sharing consortium in APAC, using experience from the Americas bureau.

Identity: reported revenue growth of 27.4% and a pro forma constant currency revenue decline of 1.4%. Adjusted operating margin declined 15.4pp y-o-y reflecting the addition of Acuant as well as cost inflation. Cryptocurrency and internet economy customers, who are predominantly in the United States, were affected by the macroeconomic slowdown and cryptocurrency volumes normalised at lower levels than expected. Management expects cryptocurrency volumes to remain at this lower level. Despite this, GBG saw good customer retention. IDology’s performance was weaker than Acuant’s, which has broader sector diversification. Excluding cryptocurrency, Acuant’s underlying subscription revenue was up 20.8% y-o-y. Identity’s EMEA and APAC regions grew 6.2% pro forma constant currency. New customer wins in the Americas included Makes Cents and Bally’s Canada; in the UK, Broadway Gaming and Slater & Gordon Lawyers; and in Australia, Spirit Super.

Cryptocurrency headwinds

In recent years, GBG’s Identity business has benefited from increasing volumes of transactions from cryptocurrency customers. Cryptocurrency-related revenues increased from 1.7% of group revenue in FY18 to 3.7% by FY21. In FY22 GBG saw an even bigger increase to 5.8% of revenue (excluding Acuant) and management estimates that roughly a third of FY22 revenue was exceptional and unlikely to be repeated. As the sector has had its well-publicised issues and the main cryptocurrencies have declined in value since the end of 2021, the contribution has declined. Including Acuant, in H123, cryptocurrency generated £3.6m of revenue, down from £10.3m in H122 and £10.0m in H222, and the company estimates it will decline further to more like £2.0m in H223. This would be c 2% of FY23e revenue and would represent a c 3% headwind to pro forma growth in FY23.

Acuant integration completed

The company completed the integration of the Acuant acquisition during H123, with the sales teams combined in September. They now have the ability and incentive to cross-sell the entire GBG product suite. The company has made good progress combining GBG and Acuant’s document and biometric capabilities, with document-powered identity solutions up 30.4% y-o-y. Cost synergies of £3m have already been achieved and revenue synergies are now being sought to reach the total of £5m in targeted synergies. There are already 30 IDology customers who are now also using Acuant solutions and GBG’s EMEA and APAC teams have made the first cross-sells of Acuant services.

Product development accelerated

As hoped for when Acuant was acquired, GBG has accelerated product development. This includes the launch of GBG GO (based on Acuant’s orchestration technology), a low code/no code solution that supports customers who want to build their own consumer journey incorporating identity and fraud services on one platform. In EMEA, Mobile Fraud intelligence and Multi Credit Bureau services have been launched and are already generating revenue. The ExpectID platform in the US launched the latest version of Flex API, which makes it easier for customers to consume its services, as well as launching a ‘Know your business’ service and enhanced its fraud consortium.

Outlook and changes to forecasts

The start of trading in H223 has been in line with company expectations. Management expects to deliver mid-single digit pro forma constant currency revenue growth in H223, in line with expectations. In H1, currency translation provided a 7% benefit to reported revenue. Since the end of H123, the dollar has weakened against sterling (from $1.12 to $1.20), so at prevailing rates, the company expects currency translation will provide a c 6% benefit to H223 growth. Management expects the adjusted operating margin to improve in H223 due to H2-weighted revenues and cost control. With interest rates higher than when SONIA-linked debt was originally taken out, the company expects a net interest expense of £6.5–7m for FY23. Since the end of H123, the company has paid down $6m of debt and expects to pay down more by year-end.

Taking into account H123 divisional performance and the moves in the US dollar versus sterling since the October trading update (when £1 bought US$1.12), we have revised our revenue forecasts for FY23. For FY24 and FY25 we are taking a more cautious approach to growth, particularly in the Identity business, due to the current macroeconomic uncertainty.

While our Fraud and Location revenues are higher in all years, we have cut our Identity forecasts to reflect lower growth (a combination of lower underlying growth and a weaker translation effect). As group revenue is lower than previously forecast, we have also trimmed our operating margin assumptions. Lower operating profits combined with higher net interest expenses and slightly higher tax rates result in cuts to our normalised EPS estimates.

Exhibit 4: Changes to forecasts

£m

FY23e

FY23e

 

 

FY24e

FY24e

 

 

FY25e

FY25e

 

 

old

new

change

y-o-y

old

new

change

y-o-y

old

new

change

y-o-y

Revenues

298.1

292.9

(1.7%)

20.8%

334.4

320.3

(4.2%)

9.3%

375.3

352.8

(6.0%)

10.1%

Gross profit

211.7

208.0

(1.7%)

21.0%

237.5

227.4

(4.2%)

9.3%

266.4

250.5

(6.0%)

10.1%

Gross margin

71.0%

71.0%

0.0%

0.1%

71.0%

71.0%

0.0%

0.0%

71.0%

71.0%

0.0%

0.0%

EBITDA

74.6

70.9

(5.0%)

14.0%

84.6

78.3

(7.4%)

10.4%

95.1

86.2

(9.3%)

10.1%

EBITDA margin

25.0%

24.2%

(0.8%)

(1.4%)

25.3%

24.5%

(0.8%)

0.2%

25.3%

24.4%

(0.9%)

(0.0%)

EBITA

71.1

67.3

(5.2%)

14.5%

80.8

74.6

(7.7%)

10.8%

91.2

82.3

(9.7%)

10.3%

EBITA margin

23.8%

23.0%

(0.8%)

(1.3%)

24.2%

23.3%

(0.9%)

0.3%

24.3%

23.3%

(1.0%)

0.0%

PBT

66.5

60.6

(9.0%)

6.1%

77.1

68.6

(11.1%)

13.3%

88.3

77.7

(12.0%)

13.3%

EPS - normalised, diluted (p)

20.0

18.0

(10.2%)

(10.8%)

22.5

19.9

(11.6%)

10.5%

25.6

22.4

(12.5%)

12.6%

EPS - reported (p)

10.7

2.9

(72.8%)

(58.8%)

13.6

5.4

(60.0%)

87.2%

16.7

7.9

(52.9%)

44.3%

DPS (p)

4.0

4.0

0.0%

5.0%

4.3

4.3

0.0%

7.5%

4.6

4.6

0.0%

7.0%

Net debt/(cash)

89.5

102.2

14.3%

(3.5%)

41.0

60.5

47.5%

(40.8%)

(15.8)

12.7

(181%)

(79.0%)

Net debt/EBITDA

1.2

1.4

0.5

0.8

N/A

0.1

Divisional forecasts

Revenue

Identity

190.6

180.6

(5.2%)

26.5%

216.7

198.0

(8.6%)

9.6%

246.3

219.6

(10.8%)

10.9%

Location

72.0

75.0

4.1%

13.0%

79.2

81.7

3.2%

9.0%

87.1

89.1

2.3%

9.0%

Fraud

35.6

37.4

5.1%

12.2%

38.6

40.6

5.2%

8.6%

41.9

44.1

5.2%

8.6%

Group

298.1

292.9

(1.7%)

20.8%

334.4

320.3

(4.2%)

9.3%

375.3

352.8

(6.0%)

10.1%

Adjusted operating profit

Identity

69.0

63.8

(7.6%)

11.9%

78.0

70.3

(9.8%)

10.3%

87.7

77.6

(11.5%)

10.3%

Location

25.9

27.0

4.1%

9.7%

28.5

29.4

3.2%

9.0%

31.3

32.1

2.3%

9.0%

Fraud

8.5

9.0

5.1%

11.8%

9.3

9.7

5.2%

8.6%

10.1

10.6

5.2%

8.6%

Central costs

-32.4

-32.4

0.0%

-34.9

-34.9

0.0%

-37.9

-37.9

0.0%

Group

71.1

67.3

(5.2%)

14.5%

80.8

74.6

(7.7%)

10.8%

91.2

82.3

(9.7%)

10.3%

Adjusted operating margin

Identity

36.2%

35.3%

-0.90%

36.0%

35.5%

-0.46%

35.6%

35.3%

-0.28%

Location

36.0%

36.0%

0.00%

36.0%

36.0%

0.00%

36.0%

36.0%

0.00%

Fraud

24.0%

24.0%

0.00%

24.0%

24.0%

0.00%

24.0%

24.0%

0.00%

Group

23.8%

23.0%

-0.85%

24.2%

23.3%

-0.88%

24.3%

23.3%

-0.96%

Source: Edison Investment Research

Valuation

The table below shows GBG’s valuation versus three peer groups: identity management, UK software and UK IT services.

Exhibit 5: Peer financial and valuation metrics

Rev growth (%)

EBIT margin (%)

EV/Sales (x)

EV/EBIT (x)

P/E (x)

Div yield (%)

Yr1

Yr2

Yr1

Yr2

Yr1

Yr2

Yr1

Yr2

Yr1

Yr2

Yr1

Yr2

GBG

20.8

9.3

23.0

23.3

3.2

3.0

14.1

12.7

18.0

16.3

1.2

1.3

Ave ID Management

13.4

7.7

32.6

30.7

6.2

5.7

18.7

18.4

22.5

20.9

1.3

1.4

Median ID Management

12.3

7.4

29.3

26.5

5.7

5.4

20.2

18.4

24.7

22.5

0.8

0.8

Ave UK Software

24.8

18.7

(6.1)

7.2

3.5

2.8

44.3

43.1

31.9

34.5

0.9

0.9

Median UK Software

13.9

11.8

7.3

11.4

2.4

2.1

16.9

17.3

16.8

22.7

0.0

0.0

Ave UK IT Services

16.1

12.8

14.8

16.2

2.6

2.4

17.0

16.3

22.2

20.6

1.8

2.0

Median UK IT Services

14.7

11.4

14.6

14.8

2.1

2.0

15.1

13.9

21.0

18.9

1.5

1.7

Source: Edison Investment Research, Refinitiv (as at 28 November)

After a period of trading at a premium to all three groups, the stock is now trading at a discount on a P/E basis for FY23 and FY24. In our view, the rate of sustainable revenue growth is the key determinant for valuation. As Acuant has not yet shown the rates of growth anticipated at the time of acquisition, and the economy in general has slowed over the last year, double-digit underlying revenue growth is looking less achievable in the shorter-term. In the current economic environment, the next 12 months are likely to be a period of softer growth but we would expect growth to accelerate after this as the economy improves and the company leverages Acuant’s products and technology across the group.

We performed a reverse DCF using a WACC of 9%, long-term growth of 3% and using explicit forecasts to FY25. We estimate that the share price is factoring in revenue growth of only 4.3% from FY26–32 at an EBIT margin of 23.4%, which in our view appears conservative.

Exhibit 6: Financial summary

£'000s

2020

2021

2022

2023e

2024e

2025e

March

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

199,101

217,659

242,480

292,932

320,276

352,771

Cost of Sales

(54,914)

(65,096)

(70,549)

(84,950)

(92,880)

(102,304)

Gross Profit

144,187

152,563

171,931

207,981

227,396

250,468

EBITDA

 

 

51,739

61,410

62,196

70,904

78,311

86,201

Operating Profit (before amort. and except.)

47,945

57,896

58,839

67,342

74,584

82,300

Acquired intangible amortisation

(19,008)

(17,671)

(24,735)

(42,592)

(42,592)

(42,592)

Exceptionals

(1,552)

448

(4,526)

(1,513)

0

0

Share of associate

0

0

0

0

0

0

Share based payments

(4,541)

(5,170)

(6,171)

(6,788)

(7,467)

(8,214)

Operating Profit

22,844

35,503

23,407

16,449

24,525

31,494

Net Interest

(2,218)

(1,240)

(1,754)

(6,786)

(5,982)

(4,578)

Profit Before Tax (norm)

 

 

45,727

56,656

57,085

60,556

68,602

77,722

Profit Before Tax (FRS 3)

 

 

20,626

34,263

21,653

9,663

18,543

26,916

Tax

(3,562)

(7,385)

(6,390)

(2,319)

(4,729)

(6,864)

Profit After Tax (norm)

35,210

44,481

44,498

46,023

51,109

57,903

Profit After Tax (FRS 3)

17,064

26,878

15,263

7,344

13,815

20,053

Ave. Number of Shares Outstanding (m)

193.6

195.2

216.2

252.7

253.9

255.4

EPS - normalised (p)

 

 

18.2

22.8

20.6

18.2

20.1

22.7

EPS - normalised and fully diluted (p)

 

17.9

22.4

20.2

18.0

19.9

22.4

EPS - (IFRS) (p)

 

 

8.8

13.8

7.1

2.9

5.4

7.9

Dividend per share (p)

0.0

6.4

3.8

4.0

4.3

4.6

Gross Margin (%)

72.4

70.1

70.9

71.0

71.0

71.0

EBITDA Margin (%)

26.0

28.2

25.6

24.2

24.5

24.4

Operating Margin (before GW and except.) (%)

24.1

26.6

24.3

23.0

23.3

23.3

BALANCE SHEET

Fixed Assets

 

 

430,219

394,564

1,001,222

960,536

919,938

889,424

Intangible Assets

414,505

377,663

969,693

927,151

884,659

842,217

Tangible Assets

9,420

6,937

7,343

9,199

11,093

13,021

Other fixed assets

6,294

9,964

24,186

24,186

24,186

34,186

Current Assets

 

 

95,984

85,653

100,928

114,779

134,833

163,363

Debtors

66,554

58,617

69,626

87,880

96,083

105,831

Cash

27,499

21,135

22,302

16,900

27,750

45,532

Other

1,931

5,901

9,000

10,000

11,000

12,000

Current Liabilities

 

 

(86,459)

(90,000)

(115,838)

(132,430)

(143,495)

(157,152)

Creditors

(80,280)

(86,338)

(109,982)

(126,574)

(137,639)

(151,296)

Contingent consideration

(6,179)

(3,662)

(5,856)

(5,856)

(5,856)

(5,856)

Short term borrowings

0

0

0

0

0

0

Long Term Liabilities

 

 

(94,810)

(25,961)

(199,185)

(176,971)

(134,206)

(101,250)

Long term borrowings

(62,139)

0

(128,226)

(118,226)

(88,226)

(58,226)

Contingent consideration

0

0

(1,920)

(1,920)

(1,920)

(1,920)

Other long term liabilities

(32,671)

(25,961)

(69,039)

(56,825)

(44,060)

(41,104)

Net Assets

 

 

344,934

364,256

787,127

765,914

777,070

794,386

CASH FLOW

Operating Cash Flow

 

 

48,498

72,631

56,256

62,021

80,173

89,108

Net Interest

(1,768)

(1,211)

(1,373)

(6,758)

(5,982)

(4,578)

Tax

(6,386)

(14,205)

(11,610)

(14,534)

(17,494)

(19,819)

Capex

(1,339)

(738)

(1,731)

(3,400)

(3,550)

(3,700)

Acquisitions/disposals

(81)

2,545

(460,484)

0

0

0

Financing

(1,553)

3,476

298,219

(4,032)

(2,171)

(2,279)

Dividends

(5,761)

(5,883)

(6,677)

(9,596)

(10,126)

(10,950)

Net Cash Flow

31,610

56,615

(127,400)

23,701

40,850

47,782

Opening net debt/(cash)

 

 

65,699

34,640

(21,135)

105,924

101,326

60,476

HP finance leases initiated

0

0

0

0

0

0

Other

(551)

(840)

341

(20,000)

0

0

Closing net debt/(cash)

 

 

34,640

(21,135)

105,924

102,223

60,476

12,694

Source: GB Group, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by GB Group and prepared and issued by Edison, in consideration of a fee payable by GB Group. 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: Copyright 2022 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 solicitation 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by GB Group and prepared and issued by Edison, in consideration of a fee payable by GB Group. 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: Copyright 2022 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 solicitation 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on GB Group

View All

Latest from the TMT sector

View All TMT content

Research: Investment Companies

The Brunner Investment Trust — An ‘all-weather’ fund for global investors

The Brunner Investment Trust (BUT) has welcomed another experienced manager into its team. Julian Bishop joined Allianz Global Investors (AllianzGI) on 1 November 2022, following the departure of Matthew Tillett. He is working alongside BUT’s lead portfolio manager, Christian Schneider, and deputy portfolio managers Marcus Morris-Eyton and Simon Gergel. Schneider says that the trust has a key focus on quality, with the team aiming to outperform BUT’s global/UK composite benchmark in all market environments. The trust is on track for its 51st consecutive year of higher annual dividends and currently offers a 2.1% yield.

Continue Reading

Subscribe to Edison

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

Sign up for free