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Annual Report 2008
Delivering an exceptional experience
for our customers, business partners
and employees
1
CPP–trusted partner for CPP is a rapidly growing international
CPP Group Plc Annual Report 2008
businesses worldwide marketing services business that
generates incremental revenue,
reduces costs and enhances customer
loyalty for its business partners by
providing outsourced customer-
management services and annuity-
based Life Assistance products.
04 Introduction
05 A selection of our major business partners
06 2008 highlights
09 Chairman’s statement
11 Group Chief Executive’s review
14 CPP Group board and senior management team
18 Business review – Northern Europe
22 Business review – Southern Europe
26 Business review – North America
30 Business review – Asia Pacific
34 Business review – New international markets
36 Corporate social responsibility
38 Financial review
40 Corporate governance statement
43 Summary Financial Statement
Independent auditors’ statement
45 Summary consolidated profit and
loss account
Front cover image: 47 Summary consolidated balance sheet
At CPP we handle all of our 16 million sales and
49 Consolidated cash flow statement
service calls locally. Pictured on the front cover
is a leading UK agent, activating a customer’s 50 Notes to the accounts
payment card on behalf of a business partner. 56 CPP Group addresses
Our Account Directors provide dedicated
support, ensuring that we maximise customer
engagement, revenue generation and reduced
cost for the benefit of our business partners.
5
Introduction A selection of our major business partners
Since 2000, CPP’s expansion has been focused on CPP’s in-house expertise includes research and
Abbey Fiditalia
CPP Group Plc Annual Report 2008
international growth and new product development, customer insights, which track market trends
alongside consolidation of our presence in the UK and consumer behaviour. Our data-management Accord Italia Findomestic Banca
market. This has delivered consistently strong and analytical expertise delivers accurate customer
business results, generated by established and targeting and campaign effectiveness, alongside Accordfin Fingerhut
new operations across Europe, USA and Asia.
We continue to build our business with recently
multi-channel marketing campaigns, with an
emphasis on telemarketing and contact centre
Allied Irish Bank (GB) First Trust Bank
launched operations in countries including Turkey management. Complementary to this, our award- Agos S.p.A. GE Money
and Malaysia, and have commenced trading in the winning call centre training delivers improved
high-growth market of India. sales skills and overall performance, supported Alliance & Leicester Gruppo Banca Popolare
In addition, CPP can now provide its multi-sector
by excellent customer service and policy
administration capabilities.
Alliance Bank Berhad dell’Emilia Romagna
business partners with a broader portfolio of Life Alliance Data Hang Seng Bank
Assistance products designed to help consumers We currently operate in 13 countries, working with
cope with the complexities and anxieties of modern more than 200 business partners. During 2008 we Banca Popolare di Milano Hong Leong Bank Berhad
living. Our heritage is in the financial services sector,
but we have expanded beyond this to operate in
handled almost 12 million telemarketing calls, more
than four million customer service calls and mailed
Banco Popular HSBC
retail and mobile phone markets. Plans are already over 55 million people worldwide. Banco Santander Intesa Sanpaolo Private Banking
in place to extend our reach further by delivering
products with travel and utility business partners. We continue to invest in the design and deployment Banesto Kotak Mahindra Bank
of our core systems and processes to deliver a
New products were introduced to our portfolio highly secure and robust technology platform in all
Bank Asya Linea
in 2008 to complement Card Protection, Identity operations. In 2008, we enhanced our e-commerce Bank of Ireland M&S Money
Protection, Legal Protection and mobile phone capability, with online sales and service functionality
insurance. These include emergency assistance for our products. We encourage business partners Bank of Scotland (Ireland) MBNA Europe
products, personal possessions cover and a broader to integrate this into their core marketing activity.
range of packaged account and wholesale Our IT platform continues to receive ISO27001
Bankinter Meteor
programmes. More products are in development certification for Information Security. Barclaycard National Australia Group
for commercial test and launch in 2009, including
home and mobile technology related products. CPP is a valuable and trusted partner, offering a Barclays Nationwide
unique combination of managed consumer products,
The sale of our products, through CPP and channel and distribution management and business BBVA Octopus Connect
business partner managed channels, generates
incremental income for our business partners
services. These provide our business partners with Caja Madrid Offi – Te Abla
incremental annuity income, cost reduction benefits
through commissions. Our multi-channel and the ability to exploit new market opportunities. Carrefour S.F Oney – Crediplus
management expertise, high customer engagement
model, effective renewal marketing activity and Cetelem RBS
high-quality customer services combine to deliver
industry-leading renewal rates and sustained
CIMB Berhad Santander Consumer Finance
income and profit. Citibank Santander Totta
Our specialist knowledge and expertise, developed Consum.it – Gruppo Monte Standard Chartered Bank
over almost 30 years, enables us to design and
deliver bespoke marketing programmes to meet
dei Paschi di Siena Telecor
business partner and consumer needs. In many Credial Tesco Personal Finance
cases, business partners are contracting with CPP
to deliver channel marketing activity first, before Crédito Agrícola T-Mobile
selecting a specific product for their customers.
This approach has driven growth in card activation
DenizBank UK Post Office
and safe-receipt inbound telemarketing campaigns Egg Ulster Bank
across CPP operations, sustained by the issue and
re-issue of credit and debit cards. Euphony Wells Fargo
7
2008 highlights
CPP at a glance
In our key international markets payment fraud continues to rise,
affecting consumers and businesses around the world. Our 2,000
employees work with over 200 business partners, handling 16 million
sales and service calls in order to protect our 11 million customers.
Group financial highlights Group operational highlights
CPP Group Plc Annual Report 2008
Revenue Operating profit (before goodwill Total consumer sales and service calls: Customer numbers:
16m 11m
amortisation and exceptional items)
£m £m
259.5 32.5
225.2
26.5
Number of business partners: Employee numbers:
200 2000
198.1
168.1
150.7 19.2
14.4
Employee engagement scores (satisfied): Customer satisfaction
82% 78%
7.8
04 05 06 07 08 04 05 06 07 08
Gross Profit Cash flow from operating activities International fraud figures
£m £m
Region Country 2006 2007 All fraud figures relate
104.9 35.6
to losses through
34.7 Northern Europe UK (£m) 427 535.2 counterfeit card fraud,
90.1 Ireland (Em) – 12.5 lost and stolen cards,
Germany (Em) 56.8 56.3 cardholder not present,
77.9 Turkey (YTLm) 20 11.6 mail non-receipt and
69.2 Southern Europe Spain (Em) 176.2 191.3 card ID theft.
21.8 Italy (Em) 37.3 38 (Source: UK – APACS
61.2 21.3
France (Em) 252 250 data, Ireland – Irish
18.5 Portugal (Em) 141.2 157.4 Payment Services
Organisation. All other
North / Latin America USA ($m) 1,733.0 2,120.3 countries – Euromonitor).
Mexico (MX$) 1,070 1,777
Asia Pacific Hong Kong (HK$m) 33 35.1
Malaysia (RMm) 26 23.1
Singapore (S$m) 5 5.3
India (Rsm) 937 1,188.1
Taiwan (NT$) 258.7 156.2
04 05 06 07 08 04 05 06 07 08 China (RMBm) 221 271.3
9
Chairman’s statement
In a year when worsening economic conditions That is why I take great pride in the many long-term
CPP Group Plc Annual Report 2008
posed a major challenge for businesses around the relationships CPP has been able to forge with some
globe, I’m pleased to report that 2008 was another of the world’s leading blue-chip organisations over
year of growth for CPP. This achievement is the years. Some of these relationships have endured
testament to the resilience of the CPP business for more than 20 years. More than half of our top UK
model and the creativity and unwavering dedication business partner relationships have spanned 12 years
of our leadership team, management and employees. or more, and most contracts we sign are for between
three and five years. Nearly all of the relationships
It was undoubtedly a tough year for businesses we develop are exclusive, so that only CPP products
in most areas of the world, as the credit crunch and services are offered to our partners’ customers.
took hold and one by one economies dipped Such long and loyal relationships demonstrate the
towards recession. GDP growth in countries from quality of service we deliver and the value placed on
the USA to China fell significantly from 2007 levels, our products by some of the leading businesses in
with developed economies the worst hit. All major the world today.
developed economies are now either in or close
to recession, while growth in emerging and Tangible benefits
developing economies is slowing significantly. CPP’s sustained growth over the past 29 years has
been achieved by delivering tangible benefits to
Continued growth our business partners, including revenue growth,
In these challenging circumstances CPP has improved customer loyalty and access to market-
continued its growth trajectory, which is an leading products. The high-quality, reliable and
indication of the strength of our business today. responsive service we deliver helps our partners
Our scale and our diversity, both in terms of to retain customers for longer and builds strong
products and geographical spread, help to protect brand loyalty. We have also invested in technology
the Group as a whole against adverse economic to improve our interactions with business partners,
conditions in different parts of the world. including access to new distribution channels and
to enhance the overall customer experience.
That doesn’t mean that keeping the business
growing hasn’t required hard work and immense Fit for the future
creativity from everyone at CPP. This year our All forecasts for 2009 predict further global
management team focused on increasing our economic slowdown, which will continue to test
understanding of business partner needs and, the ability of our business to endure difficult times.
crucially, the needs of their customers. We recognise that the global recession will make
life tough for our business, with margins under
Long-term business partner relationships pressure across the Group.
Central, as ever, to our success in all markets in 2008
has been our relationships with business partners. However, CPP is a robust business in good shape
Since CPP was launched in 1980, the business has and in a strong position to weather these economic
been built on a business-to-business-to-consumer storms. I have full confidence in the expertise and
model. Our business partners are critical to CPP and capability of our senior management team to
that’s why building deep, loyal, mutually beneficial navigate the business successfully through the
and long-term relationships with them has been key current and expected market challenges. The team
to our success from day one. We believe it is will closely monitor our performance in all markets
fundamental for us to develop strong relationships and industry sectors over the coming months and
with high-quality business partners in order to build years to ensure sustained and profitable growth.
trust and confidence in our professional services,
products and outsourced capability.
Hamish Ogston
As a provider of Life Assistance products and
services our New Product Development team
regularly meets to generate and develop new
and existing products as we seek to satisfy
business partner and consumer needs.
11
Group Chief Executive’s review
Group overview We have signed two major business partners in
CPP Group Plc Annual Report 2008
As I reflect on 2008, CPP’s traditional focus on Turkey: Bank Asya and DenizBank. These are both
relationship building with business partners and brands with strong customer relationships, providing
on developing longer-life renewal income streams a very good opportunity for CPP to promote our
has served us well, particularly given the economic products and services in this exciting market.
turbulence experienced in most regions throughout What’s more, I am delighted to report that at the
the year. It was also another year of characteristically end of 2008 we reached our first 50,000 policy
challenging targets. I am pleased to report that sales in this growing market.
revenue and operating profit increased in all
established regions, and revenue increased in our Southern Europe, in particular Spain and Italy, has
recently launched markets. Overall, Group revenue suffered to some extent from the worldwide credit
increased by 15% and operating profit (pre-goodwill crunch. The final stages of the Insurance Mediation
Eric Woolley, Group Chief Executive, leads amortisation and exceptional items) by 23% on 2007. Directive have been implemented, which means
CPP’s Senior Executive team and has been we now have greater clarity on legal and regulatory
the driving force behind the Group’s strategy This performance represents sustained growth over matters that have inhibited growth over the past
and growth over the past five years. the past decade as the business continues to expand 18 months. In Portugal, negotiations with new
internationally, working with business partners across business partners have progressed well and new
market sectors. We offer an increasingly diversified campaigns will be introduced in 2009. In France,
product portfolio to drive sales and marketing activity revenue was up 30%, resulting in a profitable 2008.
through multiple channels. Strong new income
generation combined with industry-leading customer Our North American business performed well during
renewal rates and prudent, proactive cost the year, generating 7% revenue growth and,
management and innovative solutions have all following effective cost management, operating
contributed significantly. Our overall financial result profit figures that were ahead of budget and
has also benefited from an increasing contribution significantly up on last year. The team has continued
of foreign currency sourced revenue and profit. to grow customer enrolments, while lowering the
cost of acquisition. Fingerhut has recorded strong
Regional overview enrolments each month since introducing our
Our Northern European region has performed well, jointly developed new web channel, and our work
with good growth, achieving an increase in revenue with First Premier is a good example of starting
of 16%. small and building up through a close working
partnership. The US business has made a good
In the UK, we have performed robustly under the recovery and we are expecting to see further
circumstances and have laid strong foundations improvements through 2009.
for future revenue and profit, with new products
scheduled for launch in 2009. We were successful After an exciting five years since our launch in
in signing new business partners for our innovative Asia Pacific, CPP is now well established in Hong
card activation and safe-receipt programmes, which Kong, Singapore and Malaysia. Overall, the region
break the mould of traditional outsourcing models. delivered 36% revenue growth on 2007. Our
It’s a model that sees the outsourcer reduce costs expansion into Malaysia has produced impressive
and generate incremental revenue, while delivering results. After less than two years since launch,
a high-quality customer service and supporting Malaysia is now contributing 34% of Asia’s total
customer loyalty. In most cases it is the cost revenue. We are also successfully developing
reduction benefits that really drive the development partner-managed sales channels.
of these channels.
In Germany, we made significant progress with the
introduction of an in-house telemarketing operation,
which we believe will have a positive impact on our
ability to win new business. New regulations relating
to outbound telemarketing have come into force in
Germany, and CPP’s inbound telemarketing and
safe-receipt campaigns represent an innovative
solution to this regulatory change.
Over the past ten years we have successfully Given the current state of world economies, an
expanded into new international markets and 2008 internal initiative that continues to demand close
marked a significant stage in this growth strategy. scrutiny is ‘Managing for Value’. We continue to
India formally launched in December with four keep our overheads and cost base lean and remain
business partners selling Card Protection via a focused on the effectiveness and allocation of
number of sales channels. Throughout 2008, resources, so that we can return savings to our
a locally appointed management team has been business partners by way of value. This also requires
developing the Mexican market, with commercial an honest and direct dialogue with business partners
launch scheduled for the first half of 2009. And and suppliers to ensure we achieve mutual benefits.
the Asia Pacific management team has been
investigating and planning our launch in China. In recent years, CPP has developed software
Each of these markets offers sustainable high-volume applications to support contact centre and
potential for multiple products and market sectors. e-commerce interaction with current customers
Our capabilities and approach have been well and prospects. This year we extended this capability
received by business partners in these regions and to provide a secure sales portal that can be rapidly
we are investing in local management and resources, deployed at business partner branches. Our
as well as leveraging Group capability and expertise. telephony platform now provides customer-friendly
speech recognition technology which can be used
Group-wide initiatives to automate key services at peak times, without
Throughout the year, improvements have been impacting service levels.
made to customer sales and service and our overall
operating model. Monthly global dashboards were We have completed ahead of schedule a major
introduced to monitor standard KPIs, enabling full programme of activity to meet the new PCI
visibility of operational performance across the (Payment Card Industry) compliance standards,
Group for both in-house and outsourced services. which included a global migration of our database
This was supported by bi-annual Group operations platform. We have also invested in a strategic
workshops, sharing best practice and developing technology platform providing in-house data
strategic initiatives. Extracts from these global cleansing and data-management capabilities,
dashboards are now made available to our business which will improve our analytics capability, flexibility
partners online and off-line, providing a unique and speed to market for acquisition, cross-sell and
perspective on real-time performance. renewal campaigns.
Performance-management processes have been Business outlook
implemented globally. We can now analyse people The external economic climate continues to cause
performance data across countries to identify challenges across the Group. With increased
trends and develop best practice. This is a pressure on the financial services market, we need
continuation of our work to develop coherent to work harder than ever to continue our success
business values and people capabilities to support and growth. We all know that difficult economic
a high-performing culture. conditions cause real pain in the community and
the workplace. However, economic cycles are,
CPP has invested in building an integrated HR unfortunately, a fact of life and we must operate in
system with a phased programme of modules all phases of the cycle with the same professionalism
to ensure the effective management of the full and energy. It is the sign of a robust business that
employee cycle, from recruitment, induction and it can outperform in all weathers.
training through to continuous development and
succession planning. Our range of HR initiatives We have positioned the business in the marketing
ensures that talent management is at the heart services sector, offering end-to-end bespoke
of our business. customer-management solutions to business
partners, underpinned by our Life Assistance product
portfolio. While we will continue to make refinements
to the business model, we believe we have found a
strategic role that is international, durable and offers
substantial growth over the long term.
In-depth analysis of customer behaviour
Eric Woolley and predictive modelling are used to improve
the effectiveness of our customer acquisition
and retention activity.
15
CPP Group board and senior management team
CPP Group Plc Annual Report 2008
1 2 3 4 5 6 7 8 9 10 11 12 13
1 Hamish Ogston 5 Tim Kelly 8 Mike Kneafsey 11 Ignacio Mier
Non-Executive Chairman Non-Executive Director Group Consumer Sales and Services Director Managing Director, Southern Europe
Hamish founded CPP in 1980 and became Tim is Chairman of the Group Remuneration Mike has more than 20 years’ experience of sales Ignacio has extensive knowledge of the finance,
Non-Executive Chairman in 1999. Committee and is a sales and marketing professional and marketing in the financial services industry. tourism and insurance sectors in Spain. Since
with experience in numerous markets around the Before joining CPP he was Regional Managing joining CPP in 1995 Ignacio has further developed
2 Eric Woolley world. He has worked for many leading companies, Director for retail banking at Barclays Plc in the and grown the CPP Spanish operations and has
Group Chief Executive including Unilever, Coca Cola and Diageo. Tim was North of England, Scotland and Northern Ireland, overseen the opening of additional operations in
As Group Chief Executive, Eric is responsible for COO for RHM from 2003 to 2007 and part of the leading a team of 5,000 staff. Prior to this, Mike Italy, Portugal and France. He is responsible for
developing and executing the Group’s business management team that took the company from spent 17 years at HSBC, holding senior-management these countries as Managing Director, Southern
strategy across Europe, North America and Asia. private equity to a successful IPO in 2006. Tim is positions in its branch and contact centre businesses Europe, based in Madrid.
Eric joined CPP in 2003 from an oil services now COO for Premier Foods, the UK’s largest food and with First Direct, before becoming Sales and
company, Expro International Group Plc, where he company, which acquired RHM in 2007 and is Board Service Director for M&S Money. 12 Dave Pearce
was Group Finance Director. Prior to this, Eric was member of Premier Plc. Managing Director, North America
Group Finance Director of Vp Plc. Before working 9 Richard Coates Dave joined CPP in 2005, bringing with him
in industry, Eric spent several years with Credit 6 Shaun Parker Group Marketing Director extensive senior management experience gained
Suisse First Boston. Group Finance Director An experienced marketing professional, Richard in the retail and financial sectors – experience that
Shaun is responsible for the Group’s Finance and has led the marketing function at CPP for the past will aid the development and performance of the
3 Colin Lloyd Legal/Compliance functions. Prior to joining CPP five years. Prior to joining CPP, Richard was Director CPP Group across the North American region.
Non-Executive Director in 2003 Shaun worked for a number of blue-chip of Marketing and Strategic Planning for a major hotel Prior to joining CPP, Dave led marketing, consumer
Colin is current Chairman of the Fundraising organisations, including ICI Plc, Mars Inc. (Pedigree brand, and previously held positions with a number research and strategic planning at Liberty Enterprises
Standards Board, the UK government-funded Petfoods) and Diageo Plc. Here he was CFO of high-profile US-owned marketing agencies. and retail marketing at Wells Fargo Home Mortgage.
self-regulatory body for the charity sector. He is also Guinness North America, prior to leading a cross- Richard’s responsibilities at CPP extend across
past CEO and subsequently the first President of the functional team that completed the integration corporate strategy, business planning, brand strategy, 13 Grace Tsang
Direct Marketing Association (UK), Chairman of the of the Seagram Wines and Spirits business. product portfolio, channel and market development. Managing Director, Asia Pacific
Telephone Preference Service, past President of the Shaun has extensive international experience His qualifications include an MBA from Leeds Grace is responsible for the development and
Institute of Sales Promotion and Non-Executive gained in the UK, Germany and USA. University Business School. performance of CPP across the Asia Pacific region,
Chairman of Motivcom Plc. In 1970, Colin founded including Hong Kong, Singapore, Malaysia, China
KLP Group Plc, which became the largest promotion 7 Neil Hamilton 10 Stephen Kennedy and Taiwan. Prior to joining CPP in 2008, Grace was
marketing services company in the world. Group IT and Business Services Director Managing Director, Northern Europe Regional Director at Prudential Asia Corporation,
Since joining CPP in 2002, Neil has been responsible Stephen is responsible for the performance of the responsible for the direct-marketing channel across
4 Peter Morgan for the definition and implementation of a new IT UK business, as well as the development of the Irish, Asia. Grace brings with her almost 20 years’
Non-Executive Director platform capable of meeting the Group’s ambitious German and Turkish markets. He joined CPP in 2005 experience in marketing and direct distribution from
Peter is a Chartered Accountant and is Chairman growth plans. Prior to joining CPP, Neil was Group from HFC Bank where he was a Director of several the retail financial services sector in Asia, gained at
of the Audit Committee. Until 2003 he was a partner IT Director for the business process outsourcing business units. These ranged from branch networks HSBC, AIG and Prudential.
in Deloitte and Touche, dealing predominantly division of Hays Group Plc. Before Hays, Neil was in the UK and Europe to lending and central sales
with entrepreneurial high-growth businesses, Head of IT Services for Perot Systems and has held operations, which included Hamilton Direct Bank,
many of which were private-equity backed or had a variety of other IT-management positions. Marbles Loans and all group telemarketing activities.
public listings. During his career, Peter was also
responsible for managing the London audit and
assurance department, chairing a committee
overseeing the firm’s technical and training functions
and for developing marketing activity for rapidly
growing companies.
CPP conducts regular mystery shopping
at our business partner’s retail shops in order
to ensure we are fully compliant and treat
customers fairly, in line with the Financial
Services Authority’s regulations.
19
Business review: Northern Europe
Northern
CPP regional summary products, achieving significant revenue growth in
CPP Group Plc Annual Report 2008
Despite the credit crunch and the subsequent 2008 over the previous year. This has been driven
financial crisis, CPP’s Northern European region – by new product variants with Bank of Ireland, Bank
consisting of operations in the UK, Ireland, Germany of Scotland (Ireland) and new contracts with AIB (GB).
and Turkey – collectively delivered £181.1m in revenue, We also launched our first safe-receipt programme
representing a 16% increase on 2007. This was fuelled for Ireland with Ulster Bank. We will be launching
by increased Identity Protection sales in the UK as Identity Protection early 2009 with key business
Europe
the market continued to grow, as well as increased partners in Ireland and investigating the packaged
inbound telemarketing call volumes across the region. accounts market.
To achieve this, we invested heavily in technology
and a new customer contact centre in Chesterfield, Germany
as well as establishing an in-house telemarketing Following revenue growth in 2008, we relocated the
unit in Hamburg. German office from Regensburg to Hamburg. This
not only put CPP Germany at the heart of the financial
UK district, but enabled us to access a broader
CPP UK’s maturity and diversified nature enabled it employment pool – providing the conditions necessary
to resist the worst aspects of the external market to develop an in-house telemarketing capability.
turmoil at the end of 2008. The UK business recorded Existing business partners Barclaycard Germany,
growth across its core financial services sector from Santander and LBB generate the largest volume, with
both retail and wholesale products, while reducing outbound campaigns focusing on the partner product
Stephen Kennedy the cost of outsourcing services to business partners and Card Protection. A new contract with Postbank
Managing Director, and focusing on customer retention. for outsourced telemarketing has already been signed.
Northern Europe Further inbound and outbound telemarketing
Key accomplishments in 2008 included winning new contracts will be confirmed in 2009 as we seek to
card activation and safe-receipt contracts with Tesco take advantage of new marketing legislation.
Personal Finance and National Australia Group, and
new product contracts with ASDA. Packaged current Turkey
account product lines also grew in 2008, including Increased demand from Turkish banks to drive income
Regional economic overview 4 year turnover a major contract win with Abbey. The growth of from cross-sell products, as net interest margins from
The financial crisis across Northern Europe inbound telemarketing activity for business partners credit cards have declined, has led to our partners
reached unexpected proportions in the latter £m
resulted in the opening of CPP’s third UK contact DenizBank and Bank Asya promoting Card Protection
half of 2008. Commodity price increases
boosted headline inflation, depressing
181.1 centre during the summer. We now have more than through inbound and outbound telemarketing
800 sales, service and claims agents over our three channels. The performance through telemarketing,
consumption and damaging consumer UK locations. in particular, has been very positive and by the end
confidence. Growth is expected to stagnate of 2008 we had sold our first 50,000 policies. Based
in the near term in most advanced European Consumer Sales and Service delivered strong on this success, new partners will be announced
economies as house price booms deflate and 156.0
revenue growth while transforming its sales approach throughout 2009. As with most international markets,
banks curb credit availability to steady their from advised to non-advised and strengthening its we are starting to see increased business partner and
reserves. As a knock-on effect, general market senior operations team. consumer concern about identity theft. As a result,
growth is expected to slow down significantly we will investigate and pilot a variant of Identity
in European economies. As a result of the 135.7
Product innovation continued throughout the year. Protection in Turkey during 2009.
economic climate, card issuers have tightened We signed a joint venture agreement with Mapfre
their credit scoring for credit card customers, Asistencia in November 2008 to create Home 3 Outlook
leading to a fall in new card issuance and 117.2 Assistance, a new and differentiated home-assistance There is no question the economic and regulatory
reduced credit limits. Furthermore, consumers service. There were also enhancements to Identity outlook has got tougher in the UK. However, our
are reacting by cutting back on credit card Protection and the launch of One Call, a pure outsourced sales and services channels are growing
use in favour of debit cards and cash. assistance variant of Card Protection designed for very strongly and complement our business partners’
05 06 07 08 non-regulated sales channels. Building on successes ambitions to reduce costs in their own operations.
in Southern Europe and the USA, we also piloted
Your Law in the UK in October. The use of mobile Moreover, there are exciting opportunities through
Bankable Real Debit Debit Credit Credit Mobile
technology as a platform for product sales and service product and technology innovation to leverage our
Population GDP cards cards cards cards phone
2008 2009 2008 2009 2008 2009 subscribers continues to be of significant interest and further business partners’ distribution channels even further.
(Age 15+) forecast forecast developments are planned in 2009.
UK 50.3m -3.2% 75m 74.9m 67.3m 66.5m 76.1m Our business in Turkey is also performing well due to
Ireland new business partner relationships. In Germany the
Ireland 3.3m -4.0% 2.9m 3.1m 2.3m 2.4m 5.4m Eighteen months after opening our new office in provision of outsourced services presents new
Germany 70.9m -2.4% 91.2m 91.7m 3.8m 3.9m 102.4m Dublin, we have steadily grown the Irish business commercial opportunities hitherto untapped. Overall,
Turkey 53.9m -1.5% 58.9m 61.6m 44.3m 49.8m 65.8m across Card Protection and mobile phone insurance the outlook in Northern Europe remains positive.
Source: Economist 2009, APACS 2007/08, Netsize Guide 2009, CIA Factbook 2008, Euromonitor 2008, Datamonitor 2008.
Providing our employees with coaching,
via their line manager ensures they have
the right skills and knowledge to provide
excellent customer service on behalf of
our business partners.
Revenue: CASE STUDY: T-Mobile
£181.1m
T-Mobile’s relationship with CPP goes back over
many years to the days of the Pocket Phone Shop.
Initially, CPP device insurance was sold solely
through the retail stores, but as the relationship has
developed, insurance is now sold through telesales,
customer service (loyalty and retention), business
Increase in revenue: (loyalty and retention) and online channels.
16%
The company’s retail estate is spread across four
territories and consists of 291 stores with
approximately 2,000 staff. Training on insurance
features and benefits is part of the induction process
for new starters. Each individual’s competency is
assessed and verified before they are allowed to sell
UK agents: insurance to customers.
800 To strengthen the commercial relationship CPP
introduced Regional Insurance Managers, who help
T-Mobile’s Territory, Area and Store Managers to
increase the rates of insurance attachment on the
devices sold and ensure that compliance training
is properly executed. CPP also plays a key role at
the T-Mobile contact centres. In this way, CPP goes
beyond the standard delivery of a typical service
provider in this industry.
CASE STUDY: Tesco Personal Finance
CPP has won two major contracts to provide Tesco
Personal Finance with Life Assistance products in
the form of Card Protection and Identity Protection.
These will drive significant policy growth and income
generation for the company.
Tesco Personal Finance and CPP rolled out a
significant call-to-confirm programme, using
professional and motivated agents to drive sales
of both products. CPP and Tesco also launched a
promotion to offer 1,000 Clubcard points to every
customer purchasing an Identity Protection Alert
policy during Q4 2008. These programmes
demonstrate CPP’s ability to coordinate multiple
campaigns as part of a wider, integrated multi-
channel marketing initiative.
Mark Thompson, Head of Insurance Operations
at Tesco Personal Finance, says: “As we are no
longer part of the RBS group, it is more important
than ever to establish and grow within the Tesco
brand. Working with CPP has allowed us to see our
potential within the Life Assistance market and also
quantified the opportunity moving forward. I am
looking forward to working with CPP on a number
of initiatives in the near future.”
23
Business review: Southern Europe
Southern
CPP regional summary The training provided by CPP, combined with
CPP Group Plc Annual Report 2008
The Southern European region reported a 16% our operational expertise, have added real value
increase in revenue to £45.3m. Foreign currency to our business partner relationship.
translation gains helped to boost this figure. This
is a good performance considering the challenges During 2008, Southern Europe significantly
associated with the consumer market generally and reinforced its activity on Legal Protection, with major
also the implementation of the insurance Mediation campaigns for Fiditalia and Barclays. Two emerging
Europe
Directive. This new legislation affected all countries, issues in Italy are mobile payments and identity theft,
particularly Spain and Italy, as CPP and our business both of which are starting to attract consumer and
partners responded to new requirements for the media attention. We will track these with interest
marketing of insurance policies in the financial and consider the feasibility of introducing Identity
services sector. Protection in the near future.
Spain Portugal
Spain recorded a positive year with a 10% increase New contracts were signed with major business
in revenue over 2007. Although growth was not as partners including Santander Totta, Unicre,
strong as in previous years, it was a good Crédito Agrícola and new campaigns were
performance delivered in tough trading conditions. launched with Barclaycard and Oney-Crediplus
We introduced new variants of Card Protection to for Card Protection. As with our other Southern
drive volume, as well as implementing price increases. European businesses, improvements have been
Ignacio Mier made to Card Protection with Plus and Premier
Managing Director, During 2008, the business built on its established variants introduced – both positively received by
Southern Europe outbound welcome call programmes by increasing existing and prospective business partners.
inbound card activation campaigns on behalf of Work is now underway to investigate the potential
several business partners, including Santander and launch of Legal Protection in 2009.
Carrefour. To satisfy the new legal requirements,
we created a new company, Key Line Auxiliar, France
enabling us to expand our in-house inbound Our primary business relationship in France is with
Regional economic overview 4 year turnover campaigns, further leveraging our distribution and Cetelem and, as a result of new Card Protection
Whilst regional economic growth remained sales expertise. What’s more, we recognise that variants being introduced in 2008, France delivered
reasonably strong overall, the main Southern £m
in-house campaigns tend to perform better than a 30% increase in revenue. As with all European
European economies experienced downturns
in their business cycles towards the end of
45.3 those that are outsourced. markets, consumer concern about identity theft and
fraud is increasing, as is media interest. Given CPP’s
2008. Domestic demand softened and labour 39.1
The management team has driven improvements expertise and leadership in UK and North American
conditions became susceptible to this in customer retention by improving process markets, we are currently investigating the feasibility
weakening demand. The outlook for Southern efficiency in relation to customer engagement, of introducing a fraud and identity protection product
Europe is subdued, marked by falling demand 31.2
collections effectiveness and improved data quality. designed specifically to meet the needs of French
in the domestic and external markets and This will benefit what are already high renewal business partners and consumers.
exacerbated by a lack of consumer and rates, generating extended customer lifetimes
business confidence. Growth through 2009 is 21.3 and increased income for business partners. Outlook
expected to slow as tighter lending conditions Operations throughout the region will intensify their
and the high rate of inflation act as a drag on Italy sales activity in the coming year, while building
consumer spending and investment growth. CPP Italy now works with the majority of consumer relationships with the key finance sector associations.
credit brands, providing a strong business base from We plan to maximise the opportunities created by
which to expand into new market sectors. Despite Single Euro Payment Area (SEPA) and Carta Si
declines in the credit card market and total cards migration in Spain and Italy, as well as developing
issued, the business delivered a 36% revenue growth. identity protection products for countries across the
05 06 07 08
region.
The local management team has provided support
to business partners such as Barclaycard and Inbound sales activity will be intensified, and we will
Bankable Real Debit Debit Credit Credit Mobile Consum.it – Gruppo Monte dei Paschi di Siena be exploring new scenarios with business partners to
Population GDP cards cards cards cards phone
2008 2009 2008 2009 2008 2009 subscribers who are selling our products, in particular Card help us develop and refine our products. At the same
(Age 15+) forecast forecast Protection, with inbound customer service functions. time, strict cost controls and the enhancement of our
Spain 38.4m -2.4% 31.4m 31.4m 22.3m 28.6m 51.1m Group Banca Popolare di Milano has introduced processes and technical solutions will help to see us
Card Protection through multiple channels, through the difficult economic conditions.
Italy 50.7m -2.5% 44.5m 48.7m 13.7m 16.3m 89.8m including its branch network, welcome calls
France 50.4m -1.8% 59.7m 61.4m 5.9m 6.0m 57.8m and positive option. Mobile phone insurance
Portugal 8.9m -2.0% 17.2m 17.6m 8.1m 9.2m 14.1m was introduced in 2008 with focused distribution.
Source: Economist 2009, Netsize Guide 2009, Euromonitor 2008.
Increase in revenue: CASE STUDY: Grupo Santander
16%
During our ten-year relationship with Grupo
Santander across Southern Europe, CPP has evolved
from being a provider of card-related protection
products to a strategic supplier of revenue-generating
marketing services.
Revenue growth in Italy: Building on our initial relationship in Spain, we now
36%
partner Santander Consumer Finance in Italy and
Portugal, as well as Santander Totta in Portugal.
We work with the group in the UK via our business
agreements with Abbey, Alliance & Leicester
and GE Money. In Spain, we work with all of the
company’s card-issuing entities – Banco Santander,
Santander Consumer Finance, Accordfin, Banesto
Revenue growth in France: and Openbank. The products we provide are Card
30%
Protection (Plus and Premier), Legal Protection and
mobile phone insurance.
Ignacio Narvarte Ichazo, Director of Payment
Methods at Banco Santander in Spain, says:
“Santander has had a close relationship over ten
years with CPP, with the common aim that is most
profitable for both: that of offering more and better
services to our customers with each passing day.”
Following several successful sales campaigns across
the region, we are now focusing on card activation
programmes. Since these were launched in 2003
CPP has handled almost 7.5 million calls and carried
out six million activations. We have made 1.2 million
outbound calls and sold more than 750,000 Card
Protection, 55,000 Legal Protection and 6,000 mobile
phone insurance policies.
Ines Castrillo, Director of New Business and Card
Activation at Santander Consumer Finance, says:
“Through the collaboration with CPP, we have
transformed a card activation management channel
into a sales activity channel that hinges on our
marketing plan, thereby providing fundamental
backing for all of our card campaigns and added
value from bringing in CPP’s products. All of this is
achieved while taking great care over the quality of
customer service and reducing exposure to fraud.”
CPP’s capacity to offer tailor-made solutions
and our novel portfolio have made us the
international reference point for highly valued
marketing services and product innovations for
the entire Santander group.
As part of CPP’s end-to-end marketing service
to business partners, one of our suppliers designs
branded direct mail acquisition collateral for new
customer acquisition.
27
Business review: North America
North
CPP regional summary Core to CPP’s consumer-focused strategy is a
CPP Group Plc Annual Report 2008
Following 18 months of management focus passionate belief in the warmth and effectiveness
on business partner requirements, new product of the customer experience. We believe this is
innovation, campaign effectiveness and cost an important differentiator and the key to growing
reduction, the North American team has achieved our business.
revenue of £29.7m, up 7% on 2007.
Expertise in managing outsourced marketing
America
Servicing business partners through campaigns on behalf of business partners does
relentless consumer focus not come easily. Our team managers are supported
Our market positioning is based upon a co-operative by a full staff of trainers, a quality-assurance team
business model. CPP operates as an extension of and closed-loop reporting. Each step is continually
each business partner’s team, executing qualitative analysed and fine tuned to improve CPP’s total
and quantitative consumer research, developing value equation.
new products that support consumer needs,
implementing marketing campaigns to drive The introduction of enhanced data analytics and
sales and managing key aspects of the consumer propensity modelling, list quality and customer
experience. A core part of the North American segmentation has increased the return on investment
business approach has been to structure its model for CPP and our business partners. In 2008, our
around fewer, yet more strategic business partners, conversion rates grew 20%, while the cost-to-acquire
including Alliance Data, Fingerhut and Wells Fargo. dropped 21%, in spite of increased handling times.
Dave Pearce
Managing Director, Product development Outlook
North America Understanding consumer “need states” and Despite a very difficult economic environment and
developing new products in co-operation with expected falls in new and re-issued credit cards, our
our partners has led to the introduction of several pipeline and new client prospects remain strong.
successful products. With the Fingerhut
management team, CPP has developed Emergency We are pleased to have secured a new contract
Line and Legal Line, offering consumers protection with HSBC USA, with new products planned for
Regional economic overview 4 year turnover against unforeseen emergencies and legal formal launch in September 2009. We expect to sign
The economic outlook and external market challenges. Both products have simplified the agreements with new US partners early in the year.
environment for the United States has yet £m
way consumers seek assistance in times of need,
to stabilise following the recent inauguration 30.5
at an affordable annual price.
of President Obama. There are three key areas
29.9
that need to be addressed before the country
can return to sustainable levels of growth: 29.7 The introduction of LifeStyle Perks on behalf of
Alliance Data and distributed via its high-street partner
resolution of the credit crunch, an improvement brands, such as Victoria’s Secret and Eddy Bauer,
in the declining housing market and recovery has been made possible by extensive co-operation to
of consumer discretionary spend. Longer term, develop features that provide travel and entertainment
recovery is realistically forecast to occur in discounts, retail savings, return shipping, refunds and
2010. However, with so many variables not 27.7
petrol and grocery discounts to help consumers save
yet clearly understood it is very difficult to money. This product is an exclusive for Alliance Data,
gauge the length and depth of any downturn sold through many channels, including its own
and the longer-term impact of any potential customer service contact centre.
rescue package.
Campaign management
CPP North America’s front-end conversion and
back-end persistency have steadily improved
05 06 07 08 throughout 2008. Consumers are recognising the
relevance of our products to their daily lives,
connecting with our telemarketing team thanks to
Bankable Real Debit Debit Credit Credit Mobile
guided scripts, experiencing excellent customer
Population GDP cards cards cards cards phone
2008 2009 2008 2009 2008 2009 subscribers service through our contact centres and finding value
(Age 15+) forecast forecast in each product.
USA 243.3m -2.0% 421.6m 442.8m 771.1m 815.9m 271.6m
Source: Economist 2009, Euromonitor 2008, Netsize Guide 2009.
Revenue growth: CASE STUDY: Fingerhut
7%
CPP North America launched a collaborative
research project with Fingerhut to gather consumer
insights that would help to refine our product offers.
The result was a series of new products specifically
developed for Fingerhut customers. These were
launched over the course of a year and exceeded
Conversion rates grew by: expectations for both response and persistency.
20%
Bev Campbell, Vice President Enhancement
Services at Fingerhut, says: “The Fingerhut customer
is unique, and we quickly realised that the more
widely available products were not a fit for our
customer base. CPP invested the resources to meet
our objective of tailoring products to the Fingerhut
Cost to acquire dropped: customer with great success.”
21% CPP North America and Fingerhut are excited
about the outlook for 2009 as we move into a
second round of research and product development.
Our collaboration extends to developing new
channels too. As a result, customers are retaining
their products for longer and revenue has increased
for both CPP and Fingerhut.
CASE STUDY: Wells Fargo
In late 2007, CPP North America and business
partner Wells Fargo Card Services acknowledged
a need to improve the performance of our outbound
telemarketing programme. A series of challenging
discussions resulted in an agreement to implement
changes that have transformed our relationship.
Mike McDonald, Senior Vice President of Wells
Fargo Card Services and Consumer Lending, says:
“I applaud CPP’s efforts to make this a win, win,
win business relationship not only for CPP and Wells
Fargo but for our customers as well.”
Highlights of the changes include more list
modelling, leads hygiene and file segmentation
strategies, new management of the outbound
telemarketing programme, higher vendor
expectations and a price increase. Our success
enabled us to add new portfolios and a client-
managed channel to increase the overall critical
mass of our programmes. More recently we worked
on a series of changes to our billing and retention
processes to improve profitability.
For 2009 we are embarking on a joint consumer
research and new product development process that
will take our relationship to the next level. The recent
acquisition of Wachovia by Wells Fargo offers a CPP’s Group Research function regularly present
further opportunity to grow our business together. customer insight, including customer satisfaction
results to colleagues across the business, in order
to drive a continuous process of improvement.
31
Business review: Asia Pacific
Asia
CPP regional summary On a regional basis, Malaysia contributed an
CPP Group Plc Annual Report 2008
Having become established in three countries in the impressive 34% of total revenue and 55% of new
region – Hong Kong, Singapore and Malaysia – CPP policies. Our business here enjoyed stellar acquisition
Asia achieved strong growth in 2008. Revenues grew growth of 246% over the previous year.
by 36% and the number of live policies increased by
46%. Retention is an important part of our strategy The Malaysian management team continues to drive
and welcome-call programmes have been developed growth and best-in-class outbound telemarketing in
Pacific
for new customers to register their card details with the region, based on welcome calls which encourage
us. These programmes proved a great success, with customer registration and product interaction.
registration rates above 80%, effectively improving Our highly skilled on-site contact centre management
retention rates by more than 5% in Hong Kong, 7% team has ensured that we deliver against business
in Singapore and 10% in Malaysia. partner expectations.
Hong Kong Outlook
In Hong Kong, we have successfully worked with 2009 is expected to be a more challenging year
Citibank to expand our distribution channels from for all businesses in the region. Despite the economic
outbound telemarketing and roadshows to new downturn and business challenges, CPP Asia
card welcome pack inserts and inbound card remains positive about achieving growth through
activation programmes. This strategy demonstrated executing our launch strategy in new markets, such
the tremendous potential for selling Card Protection as China, and deepening our partner relationships
Grace Tsang through various non-intrusive channels. The in existing markets.
Managing Director, approach has positively impacted overall response
Asia Pacific rates, registration and renewal rates. Our multi-
channel approach, together with aggressive
outbound telemarketing programmes, has boosted
performance in acquiring new policies.
4 year turnover Singapore
Regional economic overview In August we launched a new identity protection
2008 proved to be a challenging year for Asia. £m
product, ID Protect, with Citibank. It is Asia’s first
Most Asian economies were hit hard by the
economic downturn in the fourth quarter of
3.4 one-stop identity protection and fraud resolution
service. The product sets a new benchmark for
2008, with GDP falling significantly in Hong identity protection in Asia by combining the best
Kong, Singapore and Taiwan. The region’s of CPP’s expert identity fraud resolution experience
extensive trade and financial links with the rest 2.5 with Credit Bureau, Singapore’s credit monitoring
of the world meant that it could not avoid the services, and Citibank’s distribution network.
effects of global financial turbulence for long. ID Protect brings valuable benefits to Citibank’s
Asian governments have now deployed the full customers and generates an additional revenue
armoury of fiscal and monetary stimuli, with stream for the bank.
interest rate cuts in all countries to try to
kick-start economic recovery. The economies of Malaysia
Hong Kong, Singapore, South Korea and Taiwan In 2008, two of the top-ten commercial banks in
are expected to contract further in 2009, while 0.9 Malaysia, HSBC and CIMB, partnered with CPP
the bigger, but less open economies of China, to sell Card Protection. As a result, we are now in
India and Indonesia should hold up better. partnership with six of the 17 card issuing banks
0.4
in the country. To support the two new partnerships,
we provided the banks’ agents with extensive
05 06 07 08
training in channel marketing strategies, agent
productivity, effective operations and how to build
a stronger sales culture. In less than a year, the two
Bankable Real Debit Debit Credit Credit Mobile
banks have contributed a remarkable 30% of our
Population GDP cards cards cards cards phone
2008 2009 2008 2009 2008 2009 subscribers new business in the Malaysian market.
(Age 15+) forecast forecast
Hong Kong 6.1m -4.7% 14.5m 14.8m 14.2m 14.7m 10.6m
Malaysia 18.8m -0.3% 18.9m 20.7m 11.0m 12.6m 26.9m
Singapore 3.8m -7.2% 10.0m 10.8m 7.2m 8.7m 6.5m
Source: Economist 2009,Euromonitor 2009, Netsize Guide 2009.
Revenue up: CASE STUDY: HSBC Malaysia
37%
Most of HSBC Bank Malaysia’s products are sold
via face-to-face channels at card originations,
inbound and outbound telemarketing channels.
As one of the pioneers in the Asia Pacific region,
HSBC Bank Malaysia’s inbound contact centre
plays an important role in generating revenue for
Live policies increased: the Bank as it has the capability to cross-sell other
42%
value-added products as well, such as Card
Protection as part of their service delivery exercise.
CPP Asia’s approach is working closely with its
partners and offering ongoing support for their
distribution channels. We assist HSBC Bank
Malaysia in targeting different customer segments
Malaysia acquisitions grew by: and selling techniques.
246% “We are delighted to work with CPP Asia. Lost
Card Protection has high relevance to our customer
needs with combined channel strategies, making
Lost Card Protection a strong addition to our product
suite. As consumers add to their wallet credit cards,
debit cards and stored-value cards, their need for
protection will greatly increase,” says Jon Chivers,
Head of Sales & Distribution, Personal Finance
Services of HSBC Bank Malaysia.
CPP Asia will continue to work closely with HSBC
Bank Malaysia in 2009 to provide incremental and
sustainable revenue to both parties.
Mapping the customer journey and process
flows has helped drive web servicing
enhancements to deliver a better customer
sales and service experience.
35
Business review: New international markets
New
CPP regional summary Outlook
CPP Group Plc Annual Report 2008
One of CPP’s key growth strategies is to continue CPP continues to expand internationally, tailoring
expanding the international franchise of Card products and services to suit local market
Protection, entering new territories to build requirements, leveraging Group expertise and
a sustainable multi-product, multi-services developing best practice across new and established
business. We have targeted launches in several countries in all regions.
high-potential markets.
international
Debit cards in circulation – India:
100m
India
India is expected to be one of the world’s top-five
national economies within the next 15 years. Today
there are over 300 million mobile phone users and
80 million internet users in the country. Significant
growth is forecast across all major market sectors.
markets
CPP started trading here in December 2008, having
established partnership agreements with four
Credit cards in circulation – China:
160m
business partners: Citibank, HSBC, Kotak Mahindra
Bank and Standard Chartered Bank. Campaigns to
promote Card Protection have been implemented
across multiple sales channels, including outbound
and inbound telemarketing and positive option.
E-commerce and email marketing activities are
in progress. We expect a number of contract wins
with new business partners in early 2009. New Credit/debit cards in circulation – Mexico:
80m
campaigns with these partners will drive significant
sales volume and growth throughout 2009.
China
Regional economic overview With almost 100 million credit cards in circulation,
All countries in which CPP is developing China presents CPP with an unprecedented growth
new operations appear well placed to deal opportunity in 2009 and beyond, building upon our
with the current macroeconomic conditions, existing Asian presence. We have established our
although they will undoubtedly be affected Chinese business entity and a local office in
to some degree as a consequence of their Shanghai, and we are progressing towards our
integration within the global economy. first policy sales in 2009.
Levels of GDP are unsurprisingly expected
to slow and dip marginally before returning Taiwan
to and, in some instances, surpassing previous We will continue to execute our market entrance
levels of growth. In China and India this growth strategies in preparation for launch in Taiwan.
is expected to be a key government focus, This is a market with more than 35 million credit
perhaps at the expense of inflation and other cards in circulation, where there is fierce competition
economic measures, while Mexico will look among card issuers.
to contain inflation and public debt.
Mexico
Following several months of research and field-based
planning by our new country Managing Director,
CPP’s Group Board approved the market entry plan
for Mexico in October 2008. This venture has been
made possible by Group and country collaboration
across CPP and its business partners. Several
Bankable Real Debit Debit Credit Credit Mobile
international and local banks are already in
Population GDP cards cards cards cards phone
2008 2009 2008 2009 2008 2009 subscribers discussions with us. With more than 80 million credit
(Age 15+) forecast forecast and debit cards in circulation, together with a young
India 791.4m 5.0% 106.0m 132.5m 36.7m 43.7m 320.5m but established card protection market, Mexico is
a territory with high growth potential for CPP.
China 1,098.9m 6.0% 1,878.3m 2,216.4m 160.1m 253.7m 694.5m
Mexico 76.4m -1.4% 53.8m – 28.8m 33.1m 77.5m
Taiwan 18.9m -3.5% 11.2m 10.6m 35.2m 35.0m 24.6m
Source: Economist 2009, Euromonitor 2008, Netsize Guide 2009, I.E. Market Research Estimates/NCC 2008, CIA Factbook 2007.
Corporate social responsibility
At CPP, we are clear about the meaning of Corporate Employees and workplace
Social Responsibility (CSR) – it is how we manage Keen to ensure our employees feel CPP is a good
our business processes to produce a positive place to work and that everyone contributes to our
outcome in our local communities. Our CSR success, we launched our new engagement survey
programme is integral to our day-to-day operations, in the UK in March 2008. The results showed that
since responsible business practice is our licence 55% of employees felt engaged and 82% satisfied;
to operate. It means we conduct our business in an encouraging result, but with potential for
a professional, ethical and fair manner with all our improvement. The engagement survey will be rolled
stakeholders, including employees, customers, out across the Group in 2009. Our ultimate aim is
business partners and suppliers. to ensure that employee engagement contributes
to advocacy – one of our business ambitions.
While CPP actively supports good causes through
our Community Foundation programme, and last In 2008, our Success Behaviour Index (SBI) was
year directly funded 20 local groups with grants rolled out Group-wide, giving employees an
of up to £750, our CSR programme also plays an opportunity to improve their performance and
important part in supporting our business ambitions develop stronger working relationships through
and building relationships with key stakeholders. a 360° employee questionnaire.
Our CSR framework is based on four key principles:
the community, our employees and the workplace, Marketplace
the marketplace and the environment. Treating Customers Fairly (TCF) lies at the heart of
what we do, with six clearly communicated promises
The community influencing every area of our business. TCF is critical
We recognise that employee engagement goes for CPP, not only because we are a regulated
hand-in-hand with personal and professional business, but because it makes good business sense,
development and, in 2008, our UK business helping to retain satisfied customers for longer.
increased the number of employee volunteers It also ensures that we deliver positive results for
working in the local community. our business partners through incremental revenue
generation and improved customer loyalty.
Building links with education and young people
is at the heart of our award-winning community This philosophy also applies to our suppliers. Our
outreach programme. Our initiatives include hosting Supplier of the Year award publicly recognises the
teacher development days, delivering specialist contribution that suppliers make to our business.
workshops, providing classroom volunteers and
supporting disadvantaged children. We also Environment
geographically expanded our UK school workshops CPP seeks to develop an ethos of environmental
programme beyond our core areas in 2008, building responsibility across the Group. Initiatives include
on past successes. Our patronage of community- energy efficiency, recycling, minimising the use of
based football and rugby programmes also saw paper and reducing waste.
thousands of children benefit from professional
coaching, diet and exercise instruction. We are working hard to meet the standards set out
under Carbon Reduction Commitment regulations.
In Spain, employees worked with the Red Cross We work closely with The Carbon Trust to ensure
to donate mobile phones for projects in developing that our plant, energy-management and monitoring
countries, donated toys for children with cancer, systems are effective and efficient. Year-on-year
worked with the Randstad Foundation to develop energy usage is falling in spite of business growth.
training courses for unemployed women aged over
45 and with the Stela Project to bring people with All CPP employees are encouraged to reduce
Down’s Syndrome and other intellectual handicaps their own carbon footprint by using public transport,
into the workplace. cycling, walking or car-sharing.
In North America, we have built on our excellent Enhancing our reputation
partnership with The Fraser Centre, a Minnesota- Our commitment to CSR runs throughout the
based non-profit organisation that helps people business and has been recognised externally for the
with special needs. positive outcomes it delivers. While we want to be
a good corporate citizen, our CSR programme is also Investing in young people lies at the heart of our
motivated by a desire to attract and retain talented community relations programme. Here one of
employees, manage risk, build relationships with key our employees works with school children at a
stakeholders and, ultimately, protect our reputation. local enterprise competition organised by CPP.
39
Financial review
CPP Group turnover grew by 15% to £259.5m Goodwill amortisation and exceptional items Cash flow and balance sheet
CPP Group Plc Annual Report 2008
Shaun Parker in 2008 (2007: £225.2m) despite the increasingly Charges for goodwill amortisation and exceptional With the exception of Asia where the Group
Group Finance challenging economic environment. The main driver items totalled £6.5m (2007: £11.3m). Amortisation of is investing in developing the market, each region
Director of this performance was continued organic growth the US goodwill results in a charge of £0.8m for the contributed positively to an overall operating
in our developed markets of the UK, Spain and Italy. year (2007: £0.7m). Exceptional items of £5.7m include cash flow (before ESOP payments) of £47.6m
Revenues grew by 7% in the USA (2007: (9.1)%) £0.8m relating to the capital restructuring and £4.9m (2007: £35.6m). After capital expenditure of
as price increases implemented in 2007 were relating to the Employee Share Option Scheme. £8.7m this improved cash flow supported dividend
successfully rolled out. The Group’s developing payments of £15.4m (2007: £7.1m) and taxation
business in Asia continued to grow strongly at 37% Profit before tax of £6.2m (2007: £7.0m).
with Malaysia revenues exceeding £1m less than In 2008, the Group incurred net interest costs of
two years after launch. Revenues in Germany also £7.2m (2007: net interest income £0.2m). The higher The capital restructure resulted in refinancing costs
Group operating profit (before goodwill
passed the £1m mark as our business grew by 175% interest cost results from the increased level of debt of £6.5m and loan interest of £7.2m in addition to
amortisation and exceptional items):
£32.5m
to £1.1m (2007: £0.4m). The first pilot Card Protection required to support our capital restructuring. After the capital repayment. The exercise of 50% of the
campaigns were launched in India in December accounting for goodwill amortisation, exceptional employee share options under the 2005 ESOP
2008, bringing the number of countries in which items and interest income, the Group reports profit scheme resulted in costs of £12.9m. Proceeds from
CPP markets its products to 13. before tax of £18.8m (2007: £15.4m) the debt raising amounted to £120m, and a
scheduled capital repayment of £3.8m was made in
Operating performance Taxation September. As a result, net cash flow for 2008 was
Group operating profit (before goodwill amortisation The Group’s effective tax rate for 2008 was 32% £14.6m (2007: £1.8m). Cash conversion remained high
Operating margin (pre-exceptionals): and exceptional items) of £32.5m was 22% higher (2007: 30%). The taxation of profits arising in at 120% (2007: 114%). At the balance sheet date,
12.5%
than 2007 (£26.5m). overseas jurisdictions with a higher tax rate (such Group leverage (net debt/EBITDA pre-exceptional
as Spain and Italy) has been mitigated by utilising items) was 2.2.
Against a backdrop of increasing economic brought-forward trading losses in the US. Given the
turbulence, the Group successfully increased the range of tax rates across the territories in which The Group’s net asset position in 2007 was £28.0m.
number of live retail policies in issue by 0.3m to 9.5m. CPP operates, there is no targeted effective tax rate, As a result of the restructure, this position moved to
Revenue growth also benefited from the roll out of however the rate is expected to remain constant for a net liability position of £(65.5)m at the end of 2008.
price increases across business partners and the the forseeable future.
renewal book, particularly in the UK and USA where Reserves are adversely impacted by the return of
we introduced enhanced products with a higher price Capital restructure capital to the shareholders (£86.5m). This return
point. The planned shift of the portfolio mix towards During 2008, the Group was restructured to enable of capital and reorganisation was reflected in the
higher priced and higher margin Identity Protection capital to be returned to shareholders. As part of this creation of a merger reserve of £(85.3)m. Share
products in the UK, driven in part by our investment restructure, the Group put in place new debt facilities capital and retained earnings amounted to £18.1m
in a third UK contact centre in Chesterfield, also which are expected to support the Group’s funding at the balance sheet date.
enhanced revenue and gross margin. requirements for the medium term. £86.5m of capital
was returned to shareholders, whilst five-year term Treasury and foreign exchange
The Group increased operating margin (pre- loans of £120m together with a committed revolving Under the loan agreements, covenants in respect
exceptionals) to 12.5% (2007: 11.8%). We increased credit facility of £10m were secured from a club of leverage, interest cover, cash flow cover and
the commission paid to our business partners to of five major banks. The restructure, including the absolute capital expenditure are tested and reported
maintain our competitiveness. We more than establishment of a new Group holding company, to the lending banks on a quarterly basis.
compensated for this by managing our portfolio is accounted as a merger, leading to the creation Performance was well within the agreed covenants
profitability and by improving cost efficiency through of a merger reserve on the Group’s balance sheet. at the end of September and December 2008.
a continued focus on the Managing for Value Current forecasts and projections show that there
programme. The USA in particular drove down Capital expenditure is significant covenant headroom in the future.
cost per order by improving conversion rates and Capital expenditure of £8.7m (2007: £5.5m) was
customer retention performance. The Group also significantly higher than the previous year as a result Foreign exchange had a material impact on the
benefited from its geographic diversity, with GBP of the investment of £2.8m in IT systems, telephony cash flow of the Group in 2008 and on the translation
profits and margins benefiting from the strengthening and leasehold improvements at the Group’s third of Group results. Through its overseas operations
euro and US dollar. UK site in Chesterfield. Other significant capital the Group has exposure to the euro and the US dollar,
investments included relocating the German office both of which have strengthened against the pound,
The Group continued to invest in new markets from Regensburg to Hamburg, which includes an making a positive impact on Group results.
during 2008. Highlights include the launch of Card 80 seat contact centre and telemarketing facility, Operating profit and cash flow have been positively
Protection in India, together with preparations for as well as investment in software systems to improve impacted by £1.6m and £2.8m respectively. It is
2009 launches in China and Mexico. the Group’s data management and customer Group policy not to hedge the translation exposure,
analytics capabilities. however material transactional exposures and
balance sheet exposures are hedged as they arise,
either through natural hedges or through appropriate
financial instruments.
Corporate governance statement
Talent Development lies at the core
of our business. One-to-one training
ensures employees offer world-class
sales and servicing.
CPP operates in a complicated, regulated world The Group has an appropriate organisational
and an appropriate governance system is required structure, culture and processes for planning,
to maintain growth and value. The board and executing, controlling and monitoring business
executive management remains committed to operations (including: profitability, capital &
meeting the highest standards of governance liquidity positions) to achieve its objectives.
and business conduct across all of its worldwide Lines of responsibility and delegations of authority
operations, consistent with provisions of the across the Group are documented. Business units
Principles of Good Governance and Code of Best prepare three-year strategic plans, annual budgets
Practice (The Combined Code). and cash flows. Monthly performance against
plan and variance explanations are actively
The board is responsible for the Group’s system monitored by the board and executive management
of internal control and, together with the appropriate at consolidated Group and business unit levels.
committees, regularly reviews its effectiveness,
including any outsourced activities. Internal control The Group has a dedicated Risk & Audit function
systems are designed to manage rather than which has carried out a risk-based programme
eliminate the risk of failure to meet business of internal audit reviews. This has confirmed that
objectives, material misstatement or financial effective internal controls and risk mitigation is in
loss. In seeking to minimise the exposure to risks, place. Where remedial actions are necessary, these
materiality of the risks to be managed, the are captured in AIMS (Audit Issues Management
particular environment and the cost effectiveness System) and tracked by senior executives.
of mitigation are assessed.
The board of directors has clearly identified and
communicated the following: The matters reserved
specifically for its decision and approval; the
responsibility and authority delegated to its Audit,
Nomination & Remuneration Committees; executive
management’s responsibilities for the management
of the Group’s worldwide operations; its risk policy
and mechanisms for reporting to the board.
The Group’s risk policy sets out the approach to
risk management, risk governance responsibilities,
risk appetite and risk assessment methodology.
Responsibility for execution of the policy at the local
level rests with regional management teams and their
local boards of directors. Senior executives, who
form the Risk Management Group, play an integral
oversight role in compliance with risk policy.
In recognition of the need for greater guidance
and operational consistency across regions as well
as maintenance of high standards of business
conduct, a series of policy standards and operating
principles is maintained across the Group (these
include: financial planning & reporting, accounting
& treasury, codes of business conduct [incl. risk
management, compliance & information security]
and employee procedures).
43
Summary Financial Statement
For the year ended 31 December 2008
An employee of our fulfilment supplier, DST
International, checks CPP literature prior to it
being sent out to our customers – part of our
managed services capability we provide for
business partners.
The directors have pleasure in presenting the Respective responsibilities
CPP Group Plc Annual Report 2008
Summary Financial Statement of CPP Group Plc and of directors and auditors
its subsidiaries (‘the Group’) for the year ended 31 The directors are responsible for preparing the
December 2008. This Summary Financial Statement annual report in accordance with United Kingdom
does not contain sufficient information to allow as full law. Our responsibility is to report to you our opinion
an understanding of the results and state of affairs on the consistency of the Summary Financial
of the Group as would be provided by the full annual Statement within the annual report with the full
statutory financial statements. Members requiring annual accounts, and its compliance with the relevant
more detailed information have the right to obtain, requirements of section 251 of the Companies
free of charge, a copy of the company’s last full Act 1985 and the regulations made thereunder.
financial statements and reports from its registered
office at Holgate Park, York, YO26 4GA. We also read other information contained in the
annual report as described in the contents section,
This Summary Financial Statement was approved by and consider the implications for our report if we
the board of directors on 16 March 2009 and signed become aware of any apparent misstatement or
on its behalf by: material inconsistencies with the Summary
Financial Statement.
Basis of opinion
We conducted our work in accordance with bulletin
Eric Woolley 1999/6 The Auditors’ Statement on the Summary
Chief Executive Officer Financial Statement issued by the Auditing Practices
Board for use in the United Kingdom. Our report
on the company’s full annual financial statements
Independent auditors’ statement describes the basis of our audit opinion on those
to the members of CPP Group Plc financial statements.
We have examined the Summary Financial Statement
which comprises the summary consolidated profit Opinion
and loss account, the summary consolidated balance In our opinion, the Summary Financial Statement
sheet and the summary consolidated cash flow is consistent with the full annual accounts of CPP
statement. Group Plc for the year ended 31 December 2008
and complies with the applicable requirements of
This report is made solely to the company’s section 251 of the Companies Act 1985, and the
members, as a body, in accordance with section regulations made thereunder. We have not
251 of the Companies Act 1985. Our work has been considered the effects of any events between the
undertaken so that we might state to the company’s date on which we signed our report on the full
members those matters we are required to state to annual financial statements (5th March 2009) and
them in an auditors’ report and for no other purpose. the date of this statement.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than
the company and the company’s members as a body,
for our audit work, for this report, for our audit report,
or for the opinions we have formed. Deloitte LLP
Chartered Accountants and
Registered Auditors
Leeds
16 March 2009
45
Summary Financial Statement
CPP Group Plc Summary consolidated profit and loss
Despite challenging
For the year ended 31 December 2008
CPP Group Plc Annual Report 2008
2008 2008 2008 2007 2007 2007
£m £m £m £m £m £m
Before Goodwill Total Before Goodwill Total
economic conditions
goodwill amortisation goodwill amortisation
amortisation and amortisation and
and exceptional and exceptional
exceptional items exceptional items
Note items (note 3) items (note 3)
group revenue
Turnover 1 259.5 – 259.5 225.2 – 225.2
Cost of sales (154.6) – (154.6) (135.1) – (135.1)
Gross profit 104.9 – 104.9 90.1 – 90.1
increased in 2008
Administrative expenses (72.4) (6.4) (78.8) (63.6) (11.3) (74.9)
Operating profit 3 32.5 (6.4) 26.1 26.5 (11.3) 15.2
Share of operating loss in joint venture (0.1) – (0.1) – – –
Interest receivable and similar income 1.4 – 1.4 0.9 – 0.9
by 15%
Interest payable and similar charges (8.6) – (8.6) (0.7) – (0.7)
Profit on ordinary activities before taxation 25.2 (6.4) 18.8 26.7 (11.3) 15.4
Tax on profit on ordinary activities 6 (7.6) 1.6 (6.0) (7.3) 2.7 (4.6)
Profit on ordinary activities after taxation 17.6 (4.8) 12.8 19.4 (8.6) 10.8
The figures on pages 45, 47, 49 and 50 to 55 are not the company’s statutory financial statements for the years ended 31 December 2008 and 2007, but are extracted from them.
Statutory financial statements for the year ended 31 December 2008 and 2007 have been filed with the Registrar of Companies. The auditors have reported on these financial statements;
their reports were unqualified and did not contain statements under s237 (2) or (3) Companies Act 1985.
10 year turnover
£m
259.5
225.2
198.1
168.1
150.7
131.6
104.7
76.2
45.7
39.2
99 00 01 02 03 04 05 06 07 08
47
Summary Financial Statement
CPP Group Plc Summary consolidated balance sheet
Profits increased
As at 31 December 2008
CPP Group Plc Annual Report 2008
As
restated
2008 2007
by 23% in 2008
Note £m £m
Fixed assets
Goodwill 13.1 10.6
Tangible assets 7 24.9 22.9
Investment in joint venture 0.5 –
Current assets
Stocks 0.2 0.1
Debtors 8 35.1 36.6
Cash held on short term deposit 16.6 9.5
Cash at bank and in hand 26.6 9.2
78.5 55.4
Creditors: Amounts falling due within one year 9 (75.9) (55.0)
Net current assets 2.6 0.4
Total assets less current liabilities 41.1 33.9
Creditors: Amounts falling due after more than one year 10 (100.8) –
Provisions for liabilities 12 (5.8) (5.9)
Net (liabilities)/assets (65.5) 28.0
Capital and reserves
Operating profit (before goodwill Called up share capital 0.1 0.1
amortisation and exceptional items) Merger reserve (85.3) 1.6
ESOP reserve 1.7 9.7
Profit and loss account 18.0 16.6
£m
32.5 Equity shareholders’ (deficit)/funds 13 (65.5) 28.0
26.5
19.2
14.4
7.8
04 05 06 07 08
49
Summary Financial Statement
CPP Group Plc Consolidated cash flow statement
In 2008 net cash inflow
For the year ended 31 December 2008
CPP Group Plc Annual Report 2008
2008 2007
Note £m £m
from operating activities
Net cash inflow from operating activities (below) 34.7 35.6
Returns on investments and servicing of finance (6.0) 0.2
totalled £34.7m
Taxation (6.2) (7.0)
Capital expenditure and financial investment (8.7) (5.5)
Equity dividend paid (15.4) (7.1)
Net cash (outflow)/inflow before the use of liquid resources and financing (1.6) 16.2
Net cash outflow from the management of liquid resources (7.1) (2.4)
Financing 23.3 (12.0)
Change in cash 2 14.6 1.8
Reconciliation of operating profit to net cash inflow from operating activities
2008 2007
£m £m
Operating profit 26.0 15.2
Depreciation 7.2 6.1
Amortisation of goodwill 0.8 0.7
Cash flow from operating activities (Decrease)/increase in ESOP reserve (8.0) 9.5
Decrease/(increase) in debtors 7.7 (1.5)
£m
35.6 Increase in creditors 1.1 4.0
34.7 (Decrease)/increase in provisions (0.1) 1.6
Net cash inflow from operating activities 34.7 35.6
21.8 21.3
18.5
04 05 06 07 08
51
Notes to the accounts
1 Turnover 3 Operating profit
CPP Group Plc Annual Report 2008
2008 2007 2008 2007
£m £m £m £m
Analysis of turnover by geographical location The operating profit is stated after charging/(crediting)
United Kingdom 179.8 155.5
Continental Europe 46.6 39.6 Depreciation 7.2 6.1
North America 29.7 27.7 Amortisation of goodwill 0.8 0.7
Asia Pacific 3.4 2.4 Exceptional operating items (see below) 5.7 10.5
Government grants (0.5) –
259.5 225.2 Operating leases – other 2.3 1.8
Exchange loss/(gain) 0.1 (0.1)
By class of business
Assistance 215.6 190.2 Auditor’s remuneration for audit services pursuant to legislation
Insurance 43.9 35.0 – Audit of company subsidiaries 0.3 0.3
– Company audit fees – –
259.5 225.2 Group non audit fees 0.2 0.4
Exceptional items of £5.7m (2007: £10.5m) consist of costs in relation to the evaluation of strategic options and similar costs, £0.8m (2007: £1.1m) and total ESOP costs for the year,
£4.9m (2007: £9.5m). Additional ESOP costs have arisen as a result of treating 50% of the 2005 ESOP scheme as cash settled rather than equity settled. Included within the £0.8m
2 Analysis of changes in net funds/(debt) that relates to the evaluation of strategic options and similar costs, is £0.1m (2007: £0.2m) which is also disclosed within other non-audit services under Auditors’ remuneration.
Included within prepayments in 2007 was a further amount of £0.7m in relation to non-audit services connected with a subsequent issuance of debt. The balance for 2008 of £1.0m
Debt is disclosed within bank loans and amortised over the life of the capitalised debt financing costs.
financing Exchange
2007 Cash flow costs movement 2008
£m £m £m £m £m
4 Employee information
Cash at bank and in hand 9.2 14.6 – 2.8 26.6
2008 2007
£m £m
9.2 14.6 – 2.8 26.6
Wages and salaries 45.6 37.0
Current asset investments 9.5 7.1 – – 16.6 Social security costs 5.1 4.0
Debt due within one year – (11.8) 1.4 – (10.4) Other pension costs 2.3 1.6
Debt due after one year – (107.5) 3.6 – (103.9)
53.0 42.6
18.7 (97.6) 5.0 2.8 (71.1)
Total Directors’ emoluments 0.9 0.8
2008 2007
Number Number
Average number of employees during the year 1,814 1,685
5 Dividends
2008 2007
£m £m
Dividends paid – 49.94p per ordinary share (2007: 7.46p) 15.4 7.1
6 Taxation on profit on ordinary activities 7 Tangible fixed assets
53
CPP Group Plc Annual Report 2008
2008 2007 Freehold
£m £m land and Leasehold Computer Furniture and
property improvements systems equipment Total
£m £m £m £m £m
The tax charged on profit on ordinary activities for the year was as follows
Cost
Current tax:
At 1 January 2008 7.3 4.9 37.2 5.9 55.3
UK corporation tax at 28.5% (2007: 30%) 4.5 6.8
Additions – 0.1 8.0 0.6 8.7
Double taxation relief (2.8) (1.7)
Disposals – – – – –
Exchange adjustments – 0.3 1.4 0.3 2.0
UK corporation tax after double taxation relief 1.7 5.1
Overseas corporation tax 2.8 2.7
At 31 December 2008 7.3 5.3 46.6 6.8 66.0
4.5 7.8
Accumulated depreciation
Adjustment in respect of prior year UK corporation tax (0.2) (0.2)
At 1 January 2008 1.1 2.6 24.3 4.4 32.4
Provided during the year 0.2 0.5 5.8 0.7 7.2
Total current tax 4.3 7.6
Disposals – – – – –
Exchange adjustments – 0.2 1.1 0.2 1.5
Deferred tax:
UK deferred tax 1.9 (2.7)
At 31 December 2008 1.3 3.3 31.2 5.3 41.1
Overseas deferred tax (0.3) –
Net book value
1.6 (2.7)
At 31 December 2008 6.0 2.0 15.4 1.5 24.9
Adjustment in respect of prior year UK deferred tax 0.1 (0.2)
Adjustment in respect of prior year overseas deferred tax – (0.1)
At 31 December 2007 6.2 2.3 12.9 1.5 22.9
Total deferred tax 1.7 (3.0) Included in freehold land and property is freehold land at its cost value of £0.8m, which is not depreciated.
Total recognised tax charge for the year 6.0 4.6 Depreciation: Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment. Depreciation is provided to write off the cost of all fixed
assets over their expected useful economic life, with the exception of freehold land which is not depreciated. The principal annual rates used for this purpose are:
The standard rate of corporation tax in the UK was 30% up to 31st March 2008 and then 28% from 1st April 2008 giving an average rate for the year of 28.5%. The current tax change for
Freehold property: 2.5% straight line
the year is higher than that resulting from applying the standard rate of corporation tax in the UK of 28.5% (2007: 30%). The differences are explained in the following reconciliation:
Computer systems: 25% straight line
Furniture and equipment: 25% straight line
Leasehold improvements: Over the life of the lease
2008 2007
£m £m
Profit on ordinary activities before tax 18.8 15.4
Add: Share of joint venture's operating loss before tax 0.1 –
Group profit on ordinary activities before tax 18.9 15.4
Tax on profit on ordinary activities at standard rate 5.4 4.6
Factors affecting the charge for the period:
Movements on deferred tax assets not recognised (1.6) (1.3)
Overseas tax losses 0.7 0.6
Expenses not deductible for tax purposes 1.4 0.8
Effect of change in tax rates – 0.2
Higher tax rates on overseas earnings 0.2 0.3
Movement in short term timing differences (2.0) 2.6
Depreciation in excess of capital allowances 0.4 0.1
Prior year items (0.2) (0.3)
Current tax charge for the year 4.3 7.6
8 Debtors 12 Provisions for liabilities
55
CPP Group Plc Annual Report 2008
As Deferred Equalisation Insurance
restated taxation reserve claims Total
2008 2007 £m £m £m £m
£m £m
As at 1 January 2008 0.4 3.0 2.5 5.9
Trade debtors 9.9 12.3 Provisions utilised in the year – – (2.5) (2.5)
Deferred tax asset 1.2 2.9 Additional provisions made in the year – 0.9 1.5 2.4
Other debtors 7.5 4.0
Called up share capital not paid 0.1 0.1 As at 31 December 2008 0.4 3.9 1.5 5.8
Prepayments 16.4 17.3
35.1 36.6 13 Reconciliation of the movement in equity shareholders’ funds
As
9 Creditors: Amounts falling due within one year restated
2008 2007
£m £m
2008 2007
£m £m
Profit for the financial year after taxation 12.8 10.8
Bank loans and overdrafts 10.5 – Dividends (15.4) (7.1)
Trade creditors 14.0 11.2 Exchange gain 3.9 0.1
Corporation tax 1.9 3.9 Movement on ESOP reserve (8.0) 9.5
Other creditors including tax and social security 6.1 5.0 Shareholder payment and associated cost (86.9) –
Accruals 25.4 21.3 Increase in share capital – 0.1
Deferred income 18.0 13.6
Movement in equity shareholders’ funds (93.6) 13.4
75.9 55.0 Equity shareholders’ funds at 1 January 28.1 14.7
The bank loan has been shown net of capitalised debt financing costs of £1.4m. Equity shareholders’ (deficit)/funds at 31 December (65.5) 28.1
10 Creditors: Amounts falling due after more than one year
2008 2007
£m £m
Bank loans and overdrafts 100.8 –
The bank loan has been shown net of capitalised debt financing costs of £3.6m.
11 Borrowings
2008 2007
£m £m
Bank loans 116.3 –
Due within one year 11.9 –
Due between one and two years 11.0 –
Due between two and five years 93.4 –
116.3 –
The bank loans are secured by fixed and floating charges on the assets of the Group. The bank loan's interest rate profile is two-thirds hedged by an
interest rate swap to convert it to a fixed rate from a floating rate, a requirement of the loan agreement, and from a three month to one month LIBOR
swap. The financial instruments' fair value as at 31st December 2008 were £(3.8)m and £(0.3)m respectively.
CPP addresses
CPP Group Ireland Spain
CPP Group Plc Annual Report 2008
international headquarters 1st Floor Parque Empresarial Alvento
CPP Group Plc Plaza 212, Suite 6 Via de los Poblados 1
Holgate Park Blanchardstown Corporate Park Edif. B, 2ª Planta
York Dublin 15 28033 Madrid
YO26 4GA Tel: +353 (0)1 899 1711 Spain
United Kingdom www.cppbusinesspartners.ie/ (business) Tel: +34 91 121 16 00
Tel: +44 (0)1904 544500 Fax: +34 91 121 16 16
Fax: +44 (0)1904 544933 Italy www.cpp.es
www.cppgroup.com Centro Direzionale Colleoni
Via Paracelso, 22 Turkey
China 20041 Agrate Brianza Kore Sehitleri Cad. No: 31
Suite 531, 5th Floor, Milan Engin Is Merkezi Kat: 3 Zincirlikuyu
Standard Chartered Tower Italy 34394 Sisli
No. 201, Shi Ji Avenue Tel: +39 039 657801 Istanbul
Pudong Fax: +39 039 6894 293 Turkey
Shanghai 200120 www.cppitalia.it Tel: +90 212 274 6646
China Fax: +90 212 274 9626
Tel: +86 (0) 21 6182 6780 Malaysia www.cpp.com.tr
Fax: +86 (0) 21 6182 6740 Suite 2, A-11-3 Northpoint Offices
Mid-Valley City United Kingdom
France No. 1 Medan Syed Putra Utara Holgate Park
120 rue Jean Jaurès 59200 Kuala Lumpur York
92300 Levallois-Perret Malaysia YO26 4GA
France Tel: +603 2168 5600 United Kingdom
Tel: +33 1 47 30 56 20 Fax: +603 2168 5799 Tel: +44 (0)1904 544500
Fax: +33 1 47 30 56 28 www.cppasia.com Fax: +44 (0)1904 544933
www.cppfrance.fr www.cpp.co.uk (consumer)
Mexico www.cppbusinesspartners.co.uk (business)
Germany Guillermo González Camarena
CPP GmbH No. 1000 Piso 1 Centurion Court
Große Elbstraße 39 Centro Ciudad Santa Fe Centurion Way
22767 Hamburg México, D.F. C.P. 05120 Watling Way
Germany Tel. (55) 5081-8455 Wilnecote
Tel: +49 40 76 99 67 0 Fax. (55) 5261-0893 Tamworth
Fax: +49 40 76 99 67 111 Staffordshire
www.cpp-group.de Portugal B77 5PN
Avenida da Liberdade, 40-7° United Kingdom
Hong Kong 1269-041 Lisbon Tel: +44 (0)1827 275023
14/F Chung Nam Building Portugal Fax: +44 (0)1827 275030
1 Lockhart Road Tel: +351 213 241 730
Wanchai Fax: +351 213 479 688 Chesterfield
Hong Kong www.cardprotectionplan.pt Future Walk
Tel: +852 3653 0000 West Bars
Fax: +852 3653 0050 Singapore Chesterfield
www.cppasia.com 80 Raffles Place, S49 1PF
#37-01 UOB Plaza, United Kingdom
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115-117 Bestech Chambers (1st Floor) Tel: +65 6333 6986 Fax: +44 (0) 1246 648197
Sushant Lok Phase – I Fax: +65 6333 8637
Gurgaon – 122002 www.cppasia.com USA
Haryana 5100 Gamble Drive, Suite 600
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Tel: +91 1244 0939 00 MN 55416
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Fax: +1 952 541 5973
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