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GB Group — Benefiting from the shift to online transactions

GB Group (AIM: GBG)

Last close As at 21/12/2024

324.60

▲ 9.80 (3.11%)

Market capitalisation

GBP813m

More on this equity

Research: TMT

GB Group — Benefiting from the shift to online transactions

GB Group (GBG) reported FY21 results substantially in line with our recently upgraded forecasts. In a difficult year, GBG managed to grow revenue by 9% (12% on an organic basis) and EPS by 21% while repaying all debt. Management has returned to a growth footing, investing in product development and sales capacity while continuing to seek acquisitions that could expand product or market coverage. We have upgraded our normalised diluted EPS forecasts by 3.1% for FY22 and 2.0% for FY23 and introduce a forecast for EPS growth of 9.3% in FY24.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

GB Group

Benefiting from the shift to online transactions

FY21 results

Software & comp services

15 June 2021

Price

925.5p

Market cap

£1,817m

Net cash (£m) at 31 March 2021

21.1

Shares in issue

196.3m

Free float

98%

Code

GBG

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

5.6

12.9

40.9

Rel (local)

4.0

6.7

16.9

52-week high/low

954p

645p

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 employees and are used across a range of fraud, risk management, compliance and customer on-boarding services. With headquarters in the UK, GB operates across 16 countries, has customers in more than 70 countries and generates more than 64% of revenues internationally.

Next events

AGM

29 July 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

GB Group is a research client of Edison Investment Research Limited

GB Group (GBG) reported FY21 results substantially in line with our recently upgraded forecasts. In a difficult year, GBG managed to grow revenue by 9% (12% on an organic basis) and EPS by 21% while repaying all debt. Management has returned to a growth footing, investing in product development and sales capacity while continuing to seek acquisitions that could expand product or market coverage. We have upgraded our normalised diluted EPS forecasts by 3.1% for FY22 and 2.0% for FY23 and introduce a forecast for EPS growth of 9.3% in FY24.

Year end

Revenue (£m)

Adj. operating profit* (£m)

PBT*
(£m)

Diluted EPS*
(p)

DPS
(p)

P/E
(x)

03/20

199.1

47.9

45.7

17.9

0.0

51.7

03/21

217.7

57.9

56.7

21.7

6.4

42.7

03/22e

209.6

47.1

46.5

17.7

3.5

52.4

03/23e

233.0

52.7

52.1

19.6

3.6

47.1

03/24e

259.1

59.5

58.9

21.5

3.7

43.1

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

Growing through the pandemic

GBG took early action to prepare the business to cope with COVID-19 disruption, cutting costs and not paying a dividend for FY20. While certain customers and end markets saw lower demand, the acceleration in transactions moving online created stronger demand in other markets such as online retail and food distribution. The Identity business won a contract to support the rollout of emergency funds in the US, which contributed materially to revenue growth and profitability during FY21. GBG repaid the remaining £62.5m of debt and ended FY21 with a net cash position of £21.1m. The company announced a final dividend of 3.4p, taking the full year dividend to 6.4p.

Forecasts reflect recent disposals; EPS upgraded

In H221, GBG sold two businesses that no longer fit its longer-term growth strategy. We forecast a small revenue decline of 3.7% in FY22, reflecting the non-recurrence of the US stimulus programme in FY22 and the effect of the disposals, before a return to revenue growth of 11.1% in FY23. We upgrade our normalised EPS forecasts by 3.1% in FY22 and 2.0% in FY23.

Valuation: Premium rating reflects growth potential

GBG trades at a premium to the UK software and IT services sectors and its global ID management peer group on a P/E basis, reflecting its strong growth outlook (post COVID-19), high recurring revenues and strong balance sheet. Our reverse DCF analysis estimates the share price is factoring in operating margins of 23.5% and revenue growth of c 11% per year from FY25, similar to our FY23/24 forecasts. Outside of faster than expected COVID-19 recovery, triggers for upside could include successful cross-selling, adoption of GBG’s combined solutions and, in the medium term, accretive acquisitions.

Review of FY21 results

Exhibit 1: FY21 results highlights

£m

 FY21e

FY21a 

Diff

y-o-y

Revenues

217.2

217.7

0.2%

9.3%

Gross profit

156.3

152.6

(2.4%)

5.8%

Gross margin

72.0%

70.1%

(1.9%)

(2.3%)

EBITDA

61.9

61.4

(0.8%)

18.7%

EBITDA margin

28.5%

28.2%

(0.3%)

2.2%

Adjusted operating profit

57.9

57.9

(0.1%)

20.8%

Adjusted operating margin

26.7%

26.6%

(0.1%)

2.5%

PBT

56.3

56.7

0.6%

23.9%

EPS - normalised, diluted (p)

21.7

21.7

0.1%

21.2%

EPS - reported (p)

12.6

13.8

9.6%

56.2%

DPS (p)

6.0

6.4

6.7%

N/A

Net debt/(cash)

(20.8)

(21.1)

2.4%

(161.5%)

Divisional performance

Revenue

Identity

130.3

128.1

(1.7%)

21.5%

Location

54.1

59.7

10.4%

15.9%

Fraud

30.1

26.5

(12.1%)

-25.4%

Group

217.2

217.7

0.2%

9.3%

Adjusted operating profit

Identity

47.3

47.7

0.9%

42.0%

Location

16.8

19.5

16.0%

30.3%

Fraud

6.9

5.3

(22.4%)

-60.3%

Group

57.9

57.9

(0.1%)

20.8%

Adjusted operating margin

Identity

36.3%

37.3%

Location

31.0%

32.6%

Fraud

22.8%

20.1%

Group

26.7%

26.6%

Source: GB Group, Edison Investment Research

We upgraded our forecasts when GBG issued its year-end trading update in April. FY21 results were in line with these revised forecasts. Reported revenue grew 9.3% y-o-y. Excluding the two businesses sold in FY21 (Marketing Services and Employ & Comply) and the acquisition of HooYuu (which contributed revenue of £245k), the group saw organic constant currency revenue growth of 12.1%. In early H121, the company put in place measures to protect the business from the risk of the pandemic, including pay freezes and the deferral of non-essential recruitment. Combined with the strong revenue growth, operating profit increased 20.8% y-o-y and the margin expanded by 2.5pp to 26.6%. Net finance costs were lower than forecast, benefiting from the repayment of debt in the year. On a reported basis, the company incurred a tax rate of 21.6%. Overall, this resulted in a 21.2% y-o-y increase in normalised diluted EPS.

The final dividend for the year of 3.4p was ahead of our 3.0p forecast (GBG paid an interim dividend of 3.0p to compensate for not paying a dividend for FY20). The company reported gross and net cash of £21.1m at year-end, having repaid all outstanding debt. In January the company extended its £110m revolving credit facility (RCF) by a year; the facility now expires in February 2023.

Divisional analysis

While the pandemic had a negative effect on certain of GBG’s customers (hospitality, travel, leisure) the group also saw stronger trading for other customers who benefited from the accelerated shift to transacting online.

As we have previously written, the US Identity business benefited from a one-off contract to support the stimulus programme – this contributed a significant proportion of the Identity division’s growth and we do not expect it to recur in FY22. Even without the benefit of this contract, management noted that underlying growth for the group was ahead of its expectations at the start of the year, when uncertainty about the pandemic was at its peak.

GBG also noted it had changed three aspects of reporting in FY21 and had not restated FY20 results.

■

VIX Verify: since acquisition, this has been wholly included in the Identity division. It provides some location services and in FY21 these were recorded in the Location division. The company estimates this would have equated to a c £2.7m transfer of revenue from Identity to Location in FY20.

■

Location revenues by type: certain revenues have been reclassified from services to licences and transactions (c £1m effect in FY20).

■

Fraud: certain licences are deemed to include an element of services revenue. If FY20 had been reported in a similar way, this would have shifted c £5.4m of revenue from licences to services.

The table below shows how this would have affected divisional revenues in FY20.

Exhibit 2: Restated divisional performance (Edison adjustments)

Revenue (£m)

FY20a

FY21a

y-o-y

Identity

Licence

5.435

4.653

-14.4%

Transaction

94.514

121.130

28.2%

Services

2.759

2.302

-16.6%

Total

102.708

128.085

24.7%

Location

Licence

33.135

37.088

11.9%

Transaction

17.950

20.015

11.5%

Services

3.095

2.567

-17.1%

Total

54.180

59.670

10.1%

Fraud

Licence

28.163

19.609

-30.4%

Transaction

0.000

0.133

N/A

Services

7.343

6.749

-8.1%

Total

35.506

26.491

-25.4%

Source: GB Group, Edison Investment Research

After making these adjustments, Identity revenue growth was 24.7% for FY21, with growth in transactions helped by the US stimulus programme. The Location business grew 10.1% y-o-y, with strong growth in both licences and transactions, whereas service revenue declined. The Fraud business saw a 30.4% decline in licence revenue and a smaller 8.1% decline in services revenue.

Exhibit 3: Geographic revenue split

£m

FY20

FY21

y-o-y

US

52.4

79.0

51%

UK

87.8

77.3

-12%

EU

20.8

25.0

20%

ANZ

21.5

23.6

10%

APAC

11.9

8.1

-32%

Other

4.7

4.7

0%

Source: GB Group

International revenue has increased from 56% of group revenue in FY20 to 64% in FY21. In the US, the Identity business grew revenues in financial services and online gaming and won customers in insurance and healthcare. Revenue in the UK declined 12% y-o-y; this region has a higher proportion of customers in the COVID-19-challenged category (which made up 14% of pre-COVID-19 revenue). The EU saw strong demand from online retail and food distribution in the Location business. In APAC, revenue declined 32% y-o-y. Despite difficulty in selling new fraud licences (as these tend to need on-site installation services), the region saw new business and upsells, including a major project in the Philippines and new sales in China.

Strategy update

GBG recently refreshed its vision and purpose to take advantage of the opportunity presented by the acceleration of digital business.

■

New purpose: to help build trust in a digital world.

■

New vision: create a world where everyone can transact online with confidence.

Management is focused on growing the business on an organic and inorganic basis to drive product and market expansion. GBG has to balance broadening its data assets while ensuring data are processed securely and consumer privacy is respected. Management expects to see increasing convergence of products and services across its three divisions as innovative new services are developed for customers.

Having repaid all debt, the group now has a cash position of £21m, and we forecast cash generation of at least £30m per year for the next three years. Combined with access to a £110m RCF, GBG has more than adequate funding for further acquisitions.

Outlook and changes to forecasts

GBG confirmed trading is off to a good start this year and was in line with board expectations, with strong transaction volumes in the Identity business partly due to elevated levels of cryptocurrency trading.

We have revised our forecasts to reflect FY21 results and introduce forecasts for FY24, resulting in small upgrades to our FY22 and FY23 normalised diluted EPS forecasts.

Exhibit 4: Changes to forecasts

£m

FY22e

FY22e

 

 

FY23e

FY23e

 

 

FY24e

 

old

new

change

y-o-y

old

new

change

y-o-y

new

y-o-y

Revenues

206.3

209.6

1.6%

(3.7%)

229.1

233.0

1.7%

11.1%

259.1

11.2%

Gross profit

149

151

1.6%

(1.1%)

165.0

167.8

1.7%

11.1%

186.5

11.2%

Gross margin

72.0%

72.0%

0.0%

1.9%

72.0%

72.0%

0.0%

0.0%

72.0%

0.0%

EBITDA

50.1

50.8

1.3%

(17.3%)

56.0

56.6

1.0%

11.4%

63.6

12.4%

EBITDA margin

24.3%

24.2%

(0.1%)

(4.0%)

24.4%

24.3%

(0.2%)

0.1%

24.5%

0.3%

Adjusted operating profit

46.0

47.1

2.4%

(18.7%)

51.7

52.7

2.0%

11.9%

59.5

13.0%

Adjusted operating margin

22.3%

22.5%

0.2%

(4.1%)

22.5%

22.6%

0.1%

0.2%

23.0%

0.4%

PBT

44.9

46.5

3.6%

(17.9%)

50.8

52.1

2.6%

12.1%

58.9

13.1%

EPS - normalised, diluted (p)

17.1

17.7

3.1%

(18.6%)

19.3

19.6

2.0%

11.2%

21.5

9.3%

EPS - reported (p)

7.9

8.9

12.4%

(35.5%)

10.3

10.8

5.1%

21.7%

13.2

21.8%

DPS (p)

3.3

3.5

6.1%

(45.3%)

3.6

3.6

0.0%

2.9%

3.7

2.8%

Net debt/(cash)

(52.1)

(51.7)

(0.8%)

144.5%

(86.9)

(85.8)

(1.2%)

66.0%

(123.8)

44.2%

Divisional forecasts

Revenue

Identity

115.9

114.8

(0.9%)

-10.4%

128.8

127.6

(0.9%)

11.2%

141.9

11.2%

Location

58.0

66.2

14.2%

11.0%

65.0

74.2

14.2%

12.0%

83.1

12.0%

Fraud

32.5

28.6

(12.0%)

7.9%

35.3

31.2

(11.7%)

9.1%

34.1

9.2%

Group

206.3

209.6

1.6%

-3.7%

229.1

233.0

1.7%

11.1%

259.1

11.2%

Adjusted operating profit

Identity

35.1

35.0

(0.3%)

-26.6%

39.0

38.9

(0.3%)

11.2%

43.3

11.2%

Location

16.2

19.9

22.4%

2.0%

18.2

22.3

22.4%

12.0%

24.9

12.0%

Fraud

8.4

6.0

(28.9%)

12.6%

9.5

7.0

(26.4%)

16.9%

7.8

11.6%

Group

46.0

47.1

2.4%

-18.7%

51.7

52.7

2.0%

11.9%

59.5

13.0%

Adjusted operating margin

Identity

30.3%

30.5%

30.3%

30.5%

30.5%

Location

28.0%

30.0%

28.0%

30.0%

30.0%

Fraud

26.0%

21.0%

27.0%

22.5%

23.0%

Group

22.3%

22.5%

22.5%

22.6%

23.0%

Source: Edison Investment Research

Valuation

The table below shows how GBG is trading versus three peer groups: identity management global peers, UK software and UK IT services companies. GBG trades at a premium to all three groups on all metrics, reflecting its track record of double-digit revenue growth and operating margins consistently above 20%.

Exhibit 5: Peer group valuation metrics

Rev growth (%)

EBIT margin (%)

EV/Sales

EV/EBIT

P/E

Div. yield (%)

CY

NY

CY

NY

CY

NY

CY

NY

CY

NY

CY

NY

GBG

-3.7

11.1

22.5

22.6

8.6

7.7

38.1

34.1

52.4

47.1

0.4

0.4

Ave ID management

8.8

9.1

27.1

28.3

7.1

6.5

26.8

23.0

32.8

27.5

0.8

0.9

Median ID management

9.5

7.8

28.2

27.2

6.6

6.1

26.4

23.5

32.4

27.5

0.5

0.6

Ave UK software

26.0

16.4

2.9

9.5

5.6

4.8

13.9

16.2

N/A

N/A

0.6

0.7

Median UK Software

9.5

12.7

13.1

14.6

4.5

3.8

18.9

19.9

21.5

25.6

0.0

0.0

Ave UK IT Services

15.1

12.3

6.4

10.2

4.0

3.5

32.3

22.7

30.0

37.0

1.0

1.1

Median UK IT Services

9.0

9.5

12.2

15.0

3.5

3.2

28.1

26.2

33.7

30.5

0.8

0.9

Source: Edison Investment Research, Refinitiv. Note: Priced at 14 June.

Our reverse DCF analysis, which uses a WACC of 6.5%, long-term growth of 3% and our forecasts to FY24, estimates the current share price is factoring in operating margins of 23.5% and revenue growth of c 11% per year from FY25, not dissimilar to our forecasts for FY23/24. Triggers for upside from the current level, apart from faster than expected recovery as COVID-19 restrictions are reduced, could include accretive acquisitions, successful cross-selling and adoption of converged solutions.

Exhibit 6: Financial summary

£'000s

2017

2018

2019

2020

2021

2022e

2023e

2024e

March

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

87,468

119,702

143,504

199,101

217,659

209,638

233,011

259,051

Cost of Sales

(20,302)

(27,092)

(36,060)

(54,914)

(65,096)

(58,699)

(65,243)

(72,534)

Gross Profit

67,166

92,610

107,444

144,187

152,563

150,940

167,768

186,517

EBITDA

 

 

18,734

28,741

34,080

51,739

61,410

50,778

56,559

63,578

Operating Profit (before amort. and except.)

17,006

26,311

32,031

47,945

57,896

47,094

52,703

59,541

Acquired intangible amortisation

(4,022)

(7,885)

(10,316)

(19,008)

(17,671)

(18,500)

(18,500)

(18,500)

Exceptionals

(1,410)

(2,143)

(4,003)

(1,552)

448

0

0

0

Share of associate

0

0

0

0

0

0

0

0

Share based payments

(994)

(2,375)

(2,287)

(4,541)

(5,170)

(5,687)

(6,256)

(6,881)

Operating Profit

10,580

13,908

15,425

22,844

35,503

22,907

27,947

34,160

Net Interest

(498)

(508)

(689)

(2,218)

(1,240)

(600)

(600)

(600)

Profit Before Tax (norm)

 

 

16,508

25,803

31,342

45,727

56,656

46,494

52,103

58,941

Profit Before Tax (FRS 3)

 

 

10,082

13,400

14,736

20,626

34,263

22,307

27,347

33,560

Tax

668

(2,746)

(2,583)

(3,562)

(7,385)

(4,808)

(5,894)

(7,233)

Profit After Tax (norm)

13,206

20,642

24,760

35,210

43,059

35,335

39,598

43,616

Profit After Tax (FRS 3)

10,750

10,654

12,153

17,064

26,878

17,499

21,453

26,326

Ave. Number of Shares Outstanding (m)

131.6

150.6

158.1

193.6

195.2

197.1

198.6

200.1

EPS - normalised (p)

 

 

10.0

13.7

15.7

18.2

22.1

17.9

19.9

21.8

EPS - normalised and fully diluted (p)

 

9.9

13.5

15.4

17.9

21.7

17.7

19.6

21.5

EPS - (IFRS) (p)

 

 

8.2

7.1

7.7

8.8

13.8

8.9

10.8

13.2

Dividend per share (p)

2.4

2.7

3.0

0.0

6.4

3.5

3.6

3.7

Gross Margin (%)

76.8

77.4

74.9

72.4

70.1

72.0

72.0

72.0

EBITDA Margin (%)

21.4

24.0

23.7

26.0

28.2

24.2

24.3

24.5

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

19.4

22.0

22.3

24.1

26.6

22.5

22.6

23.0

BALANCE SHEET

Fixed Assets

 

 

105,653

170,284

438,683

430,219

394,564

377,731

360,877

343,993

Intangible Assets

98,753

161,372

425,646

414,505

377,663

359,113

340,613

322,163

Tangible Assets

2,856

4,700

4,815

9,420

6,937

8,654

10,300

11,866

Other fixed assets

4,044

4,212

8,222

6,294

9,964

9,964

9,964

9,964

Current Assets

 

 

48,914

61,121

76,522

95,984

85,653

114,040

154,455

199,430

Debtors

30,569

37,969

54,992

66,554

58,617

56,457

62,751

69,764

Cash

17,618

22,753

21,189

27,499

21,135

51,682

85,802

123,765

Other

727

399

341

1,931

5,901

5,901

5,901

5,901

Current Liabilities

 

 

(44,444)

(56,942)

(77,030)

(86,459)

(90,000)

(91,393)

(100,779)

(110,928)

Creditors

(36,436)

(56,100)

(70,302)

(80,280)

(86,338)

(87,731)

(97,117)

(107,266)

Contingent consideration

(7,122)

(45)

(5,287)

(6,179)

(3,662)

(3,662)

(3,662)

(3,662)

Short term borrowings

(886)

(797)

(1,441)

0

0

0

0

0

Long Term Liabilities

 

 

(15,940)

(16,711)

(116,707)

(94,810)

(25,961)

(19,610)

(13,000)

(4,909)

Long term borrowings

(11,499)

(8,451)

(85,447)

(62,139)

0

0

0

0

Contingent consideration

0

0

0

0

0

0

0

0

Other long term liabilities

(4,441)

(8,260)

(31,260)

(32,671)

(25,961)

(19,610)

(13,000)

(4,909)

Net Assets

 

 

94,183

157,752

321,468

344,934

364,256

380,767

401,553

427,586

CASH FLOW

Operating Cash Flow

 

 

16,305

31,620

27,779

48,498

72,631

54,331

59,651

66,714

Net Interest

(498)

(545)

(689)

(1,768)

(1,211)

(600)

(600)

(600)

Tax

(2,193)

(3,247)

(2,930)

(6,386)

(14,205)

(11,158)

(12,505)

(15,325)

Capex

(2,227)

(2,018)

(1,625)

(1,339)

(738)

(3,100)

(3,250)

(3,400)

Acquisitions/disposals

(36,840)

(70,363)

(255,101)

(81)

2,545

0

0

0

Financing

24,755

56,668

157,339

(1,553)

3,476

(2,252)

(2,252)

(2,252)

Dividends

(2,775)

(3,582)

(4,049)

(5,761)

(5,883)

(6,674)

(6,923)

(7,175)

Net Cash Flow

(3,473)

8,533

(79,276)

31,610

56,615

30,547

34,121

37,962

Opening net debt/(cash)

 

 

(8,673)

(5,233)

(13,505)

65,699

34,640

(21,135)

(51,682)

(85,802)

HP finance leases initiated

0

0

0

0

0

0

0

0

Other

33

(261)

72

(551)

(840)

0

(0)

(0)

Closing net debt/(cash)

 

 

(5,233)

(13,505)

65,699

34,640

(21,135)

(51,682)

(85,802)

(123,765)

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 £49,500 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 2021 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 £49,500 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 2021 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

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