CPP Group to Focus on Blink InsurTech Platform After Disposals
Why we think this is good
The RNS announcement outlines CPP Group's strategic transformation to focus solely on its Blink InsurTech platform, which is seen as having stronger long-term growth potential compared to the group's legacy operations. The disposal of CPP Turkey for £4.6 million and the potential disposal of CPP India are positive steps in this direction, as they will allow the company to reinvest in Blink and reduce central costs. The appointment of a new CEO for Blink is also a positive development. While the disposal of CPP Turkey will impact the group's financial performance, the strategic rationale appears justified, and the consideration received seems reasonable compared to the company's market cap.
Key Points
- Disposal of CPP Turkey for £4.6 million
- Blink has entered a £1.5 million, three-year licence agreement
- Potential disposal of CPP India under evaluation
- Strategic focus on scaling Blink, a high-margin InsurTech platform
- Appointment of new CEO, Brian Barter, to lead Blink's growth
Summary
CPP Group announces a revised strategy to focus solely on its Blink InsurTech platform and dispose of its remaining legacy assets. The company has completed the disposal of CPP Turkey for £4.6 million and is in advanced discussions regarding the potential disposal of CPP India. The proceeds will be used to fund investment in Blink, meet working capital requirements, and repay the group's RCF facility. Blink has evolved into an established, high-margin platform with realisable long-term growth prospects, and the company believes it is well positioned in a favourable market environment for technology-led parametric providers.