GB Group PLC (LSE:GBG), the Chester-based digital identity verification company, is expanding its reach Down Under with the purchase of DataTools, an Australian provider of address validation and data quality software.
The £7.9 million acquisition will be funded from the group’s existing credit facility and adds scale in a market where GBG is already growing strongly.
DataTools has been a long-term partner of the company for more than a decade, supplying address verification technology to a customer base of more than 700 organisations across sectors.
Deutsche Bank’s Tintin Stormont, who rates the shares a “buy” with a 490p target, said the deal should strengthen GBG’s position in Australia and New Zealand and provide fresh opportunities to sell more of its identity products to DataTools’ existing clients.
The target business generates more than 90% of its revenue from recurring subscriptions and delivered around £2.4 million of sales in the year to June with strong profitability.
GB Group steady at half-time, momentum improving
Half-year results from GB Group are broadly in line with expectations, according to Deutsche Bank, with revenue set to reach about £135.5 million, up 1.8% on a constant-currency basis.
The modest growth reflects two factors flagged in advance: a tough comparison with last year’s one-off boost from Santander’s UK identity work, and the planned winding down of an older compliance product.
Excluding those effects, underlying growth was closer to 4%, suggesting progress is building after a quieter spell. GBG’s most recent full-year results showed 3% constant-currency growth, with the first half stronger than the second.
Stormont said the company’s simplification strategy and focus on recurring revenue should help sustain the improvement as trading conditions stabilise.