CPP shares dive after fall in profits
Wednesday 28 March 2012
Shares in CPP Group dropped by a third yesterday as they returned from a five-week suspension following a year-long inquiry into the mis-selling of credit-card insurance and identity-theft protection by the Financial Services Authority.
CPP shares, which were suspended at 103p on 20 February, dropped 37.25p to 65.75p. A year ago, just before the FSA inquiry was made public, they stood at 280p.
The FSA last month ordered CPP to change how it handles renewals of policies, giving customers more chances to opt out, and to review past sales going back to 2005. The company said yesterday this will cost it £16.9m. That knocked pre-tax profits for last year by 29 per cent to £28.3m, which its chief executive Paul Stobart described as a "robust performance".
CPP has lost one major customer in Barclaycard and also a chunk of business with HSBC in the UK.
Mr Stobart said his first priority "is to work closely and co-operatively with the FSA to resolve matters to the complete satisfaction of the regulator". He added CPP had to "shift our culture and operating model", develop new products and focus on its emerging markets operations.
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