GB Group plc (GBG.L) | Investment Case

1. Company Snapshot

1.a. Company Description

GB Group plc, together with its subsidiaries, provides identity data intelligence products and services in the United Kingdom, the United States, Australia, and internationally.The company operates through three segments: Location, Identity, and Fraud.Its solutions help organizations recognize and verify identities of their customers in their business processes.

The company offers location intelligence services, including address capture and verification, digital identity verification, geocodes, and data maintenance services; and identity, document, and age verification solutions.It also provides fraud and compliance management solutions, such as fraud risk assessment and decisioning, transaction monitoring, know your customer risk management, and anti-money laundering solutions.The company serves retail and eCommerce, fintech, financial services, insurance, telecommunication, gaming, banking, vehicle hire, and pension industries, as well as public sector, and nightclubs and venues.

The company was incorporated in 1989 and is based in Chester, the United Kingdom.

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1.b. Last Insights on GBG

GB Group's recent struggles stem from modest revenue gains and intense competitive pressures. The company's strategic initiatives for growth are underway, but the challenging UK market, influenced by weak trade data from China, poses significant headwinds. Additionally, the firm's selection of AWS as its preferred cloud provider may accelerate growth, but the current economic uncertainty and global trade concerns hinder its progress, making it essential to scrutinize its fundamentals and resilience.

1.c. Company Highlights

Last Price	192.2
Change Percentage	-3.90%
Open	200
Previous Close	200
Market Cap ( Millions)	453
Volume	1100727
Year High	349
Year Low	190.6
M A 50	235.69
M A 200	238.06

FCF Yield	8.26%
Dividend Yield	2.29%
ROE	1.53%
Debt / Equity	16.35%
Net Debt / EBIDTA	123.50%
Price To Book	0.85
Price Earnings Ratio	53.16
Price To FCF	12.11
Price To sales	1.61
EV / EBITDA	9.31

2. GBG's H1 FY'26 Earnings: A Turnaround Story Unfolds

GBG reported revenue of GBP 135.5 million, representing 1.8% growth in constant currency terms, with adjusted operating profit increasing 4.6% to GBP 29.5 million. The company's EPS came in at 0.082, beating analyst estimates of 0.0776. Gross profit margin improved by 40 basis points, while adjusted operating expenses reduced by 1.5%. Cash conversion remained strong at 85.8%, underscoring the company's ability to maintain margin while investing in growth priorities.

Publication Date: Nov -26

                                    📋 Highlights
                                    Revenue Growth:
                                                GBP 135.5 million in H1 FY'26, reflecting 1.8% constant currency growth.
Adjusted Operating Profit:
                                                GBP 29.5 million, up 4.6% YoY, with strong cash conversion at 85.8%.
Americas Turnaround:
                                                4x new business growth YoY and 28% faster activation, supported by 6 new industry-leader appointments.
GBG Go Impact:
                                                18 new customer wins and 200 integrated digital identity schemes, driving innovation and efficiency.
Shareholder Returns:
                                                GBP 45 million in buybacks (including GBP 10 million additional buyback), targeting 4% EPS accretion annually.

                                

Segmental Performance

The Identity segment, representing 63% of total group revenue, grew 0.4% in constant currency terms, with the company confident of returning to growth in H2. Location, accounting for 30% of total group revenue, continued to drive growth with a 4.8% constant currency revenue increase. Notable customer wins include Urban Outfitters and Alibaba. The Global Fraud Solutions segment saw strong customer retention and subscription renewals, but weaker new business and implementation services.

Operational Highlights

GBG made progress on its foundational areas, including migrating its cloud to AWS, launching GBG Go, and rebalancing performance frameworks. The company is confident that GBG Go will increase growth pace, drive advocacy, and improve net revenue retention. 18 new customer wins were recorded, with 200 digital identity schemes integrated into the platform. The operating model is being evolved to be more functional, innovative, and efficient, with the product and technology teams combined and the GBG innovation lab created.

Valuation and Outlook

With a P/E Ratio of 75.09 and EV/EBITDA of 11.12, the market appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 0.3%, suggesting a potential slowdown. However, GBG's confidence in improving growth rates, driven by effective capital allocation, is expected to start in H2. The company's focus on shareholder returns, including share buybacks, is expected to drive EPS accretion. As Dev Dhiman stated, "We're confident in the acceleration of top-line growth as we enter H2 and beyond."

Capital Allocation

GBG has been proactive in utilizing its debt leverage to drive shareholder value, with two share repurchase programs announced, totaling GBP 35 million, and an additional GBP 10 million announced. The company's net debt-to-EBITDA ratio is expected to exit the financial year at approximately 1x, providing more optionality for capital allocation. The expected 4% accretion to EPS on a fully annualized basis makes share buybacks attractive.

3. NewsRoom

3 UK Stocks Estimated To Be Trading At Discounts Ranging From 17.2% To 33%

Feb -12

Source:

UK's February 2026 Stocks Possibly Priced Below Estimated Value

Feb -10

Source:

UK Stock Market's February 2026 Value Picks For Savvy Investors

Feb -06

Source:

UK Stocks Trading Below Estimated Value This January 2026

Jan -30

Source:

UK Stocks Including GB Group That May Be Priced Below Intrinsic Estimates

Jan -27

Source:

3 UK Stocks Estimated To Be Trading Below Intrinsic Value By Up To 49.3%

Jan -23

Source:

UK Stocks Trading Below Estimated Value In January 2026

Jan -22

Source:

Portfolio Update

Jan -09

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.68%)

6. Segments

Identity

Expected Growth: 4.5%

GB Group plc's 4.5% growth is driven by increasing demand for identity verification and fraud prevention solutions, expansion into new markets, and strategic acquisitions. The company's strong track record of innovation, coupled with growing regulatory requirements for identity verification, has positioned it for continued growth.

Location

Expected Growth: 4.8%

GB Group plc's 4.8% growth is driven by increasing demand for identity verification and fraud prevention solutions, expansion into new markets, and strategic acquisitions. The company's location-based services, including its Loqate and PCA Predict offerings, are also contributing to growth, as businesses seek to improve customer experience and reduce friction in online transactions.

Fraud

Expected Growth: 5.2%

GB Group plc's 5.2% growth driven by increasing demand for identity verification and fraud prevention solutions, expansion into new markets, strategic acquisitions, and investments in technology and innovation, enabling the company to capitalize on the growing need for secure online transactions and digital identity management.

7. Detailed Products

Identity Verification

GBG's Identity Verification solution helps organizations verify the identity of their customers, ensuring compliance with regulations and reducing fraud.

Location Intelligence

GBG's Location Intelligence solution provides accurate location data to help businesses understand their customers' behavior and preferences.

Fraud Prevention

GBG's Fraud Prevention solution helps detect and prevent fraudulent activities, protecting businesses from financial losses.

Customer Due Diligence

GBG's Customer Due Diligence solution helps organizations comply with anti-money laundering regulations and assess customer risk.

Data Quality

GBG's Data Quality solution helps organizations cleanse, validate, and enrich their customer data, improving data accuracy and decision-making.

Tracing and Investigation

GBG's Tracing and Investigation solution helps organizations locate and investigate individuals, assets, and entities.

8. GB Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

GB Group plc operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the increasing demand for digital identity verification and fraud prevention services.

Bargaining Power Of Customers

GB Group plc has a diverse customer base, and no single customer accounts for a significant portion of its revenue, reducing the bargaining power of customers.

Bargaining Power Of Suppliers

GB Group plc has a diversified supplier base, and the company is not heavily dependent on a single supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including the need for significant investment in technology and expertise, as well as the requirement for regulatory approvals.

Intensity Of Rivalry

The identity verification and fraud prevention market is highly competitive, with several established players, but GB Group plc's strong brand reputation and diversified product offerings help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	15.59%
Debt Cost	4.91%
Equity Weight	84.41%
Equity Cost	4.91%
WACC	4.91%
Leverage	18.47%

11. Quality Control: GB Group plc passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Kainos

A-Score: 4.9/10

Value: 1.3

Growth: 6.8

Quality: 7.6

Yield: 3.8

Momentum: 7.5

Volatility: 2.3

1-Year Total Return ->

dotdigital

A-Score: 4.5/10

Value: 5.5

Growth: 6.6

Quality: 8.5

Yield: 1.9

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

Sidetrade

A-Score: 4.2/10

Value: 0.5

Growth: 8.0

Quality: 7.0

Yield: 0.0

Momentum: 6.0

Volatility: 4.0

1-Year Total Return ->

GB Group

A-Score: 3.2/10

Value: 4.2

Growth: 3.6

Quality: 6.2

Yield: 1.9

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

IQGeo

A-Score: 3.1/10

Value: 0.2

Growth: 7.8

Quality: 4.6

Yield: 0.0

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

Trustpilot

A-Score: 2.3/10

Value: 0.6

Growth: 7.1

Quality: 4.6

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-7.16%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

4.91%

GB Group plc - GB0006870611

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on GBG

1.c. Company Highlights

Lower Growth

Average Quality

Average Yield

Revenues Miss

Strong Momentum

Earnings Miss

Stable Momentum

Fairly Valued

Weak Momentum

Medium Volatility

Earnings Beats

Average Growth

2. GBG's H1 FY'26 Earnings: A Turnaround Story Unfolds

Segmental Performance

Operational Highlights

Valuation and Outlook

Capital Allocation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.68%)

6. Segments

Identity

Expected Growth: 4.5%

Location

Expected Growth: 4.8%

Fraud

Expected Growth: 5.2%

7. Detailed Products

Identity Verification

Location Intelligence

Fraud Prevention

Customer Due Diligence

Data Quality

Tracing and Investigation

8. GB Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: GB Group plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.92$

Current Price

1.92$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA