Small Talk: GB bulks up tracing business with Data Discoveries deal

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The Independent Online

The commercial opportunities presented by the internet are well documented. More and more of us are clicking to buy goods and services. At the same time, an increasing number of businesses are hurrying to set up virtual stalls to cash in on this boom. But although lucrative, the online rush also presents certain challenges.

Among the most obvious is the question of identity. Companies that operate online need to know their customers are who they say they are. And in addition to identity verification, something that is useful for online retailers such as Asos, there are also instances where the business involved needs to verify the age of its customers – as in the case of the online sports betting company Betfair, for example, whose exchange processes millions of transactions every day.

This is where a company called GB comes in. The Aim-listed software company provides businesses with the tools they need to confirm the identity of their customers. The software takes the information that customers hand over to GB clients such as Asos, and double checks it against a range of external databases to make sure that the customers are really who they say they are.

This gives the business in question the confidence to process transactions without the fear of fraud or money laundering.

The identity verification market is certainly a lucrative one, with figures from Manchester Business School showing that there are about 300 million identity checks each year, about 45 million performed electronically. GB has a market share of about 20 per cent, or 9 million verifications a year.

In terms of the bottom line, the identity verification business brought in £10m in revenues in the 12 months to March. That works out at just over 40 per cent of overall revenues. Other areas of activity include customer registration, which kicks into action after the verification stage and pulls up a profile of the customer to make the registration process easier. This brought in nearly £6m of revenues in the year to March.

Then there's ID tracing, which is used by utilities, financial services companies and others to trace customers, to do things like keeping track of changing addresses.

GB also helps debt collection agencies to find people who have missed payments on loans, and aids the Government and the security services. Crucially, not everyone can see all the data – certain sensitive information is provided only to the Government and other public bodies.

This side of the business was boosted last week with GB's purchase of Data Discoveries (DD) for £610,000. DD provides tracing software for the Government and the debt collection industry, and sits well with GB's ID tracing activities. And although GB is UK-focused, it is extending its international reach by tapping into new country databases.

So, what are the prospects for the road ahead? Peel Hunt analysts reckon the business can deliver annual revenue growth of up to 9 per cent over the next three years.

Their counterparts at Edison Investment Research are also positive and, before the DD deal was announced, pointed out that GB had significant resources to go on the acquisition trail, with more than £6m in net cash at the end of March.

Care operator eyes Aim float

Wuhan Qiaoya Realty will announce plans this morning to float on AIM later this year. The company, which builds and operates care homes for the elderly in China, was founded 10 years ago and today provides services to some 50,000 senior citizens in Hubei province.

The group's first major project – at the South Lake resort in Wuhan's Caidian district – was completed seven years ago and boasts an average annual occupancy rate of 95 per cent. In addition to providing apartments with a total of 1,000 beds for elderly citizens, the care home complex also includes facilities including a hotel, villa and club to accommodate up to 200 visitors.

A second development in Wuhan's Jiangxia district is nearing completion. This will feature 1,500 apartments and a 300-bed hospital. In addition to the care home complexes, the company has also set up a control centre to provide emergency services to senior citizens who live outside its care homes.

The business has already attracted interest from these shores, with five private investors – including Stuart Findlay, who has since become a non-executive director of the company – making an investment through their China Doll vehicle. Mr Findlay said there was ample scope for growth, as the authorities encouraged the development of care homes.

"The Wuhan Qiaoya team are travelling the country identifying suitable sites. They are in negotiation with governors, mayors and other dignitaries, many of whom feel it would be of great benefit to their city's ageing population," he explained. "So keen are they that many are actively helping WQ to find suitable sites."

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