TROUBLED card insurer CPP yesterday unveiled a £19.9m loss for 2012 as enormous fines for mis-selling and a lower rate of customer retentions hammered earnings.
Paul Stobart, chief executive of the York-based company, admitted his company faces “significant financial challenges in the short to medium term” as it fights to avoid administration.
Last year CPP was fined a record £10.5m by the now-replaced Financial Services Authority (FSA) following mis-selling of its card insurance products. The company is expected to pay out millions more in compensation claims and has set aside a minimum of £51.7m to meet the bill.
Meanwhile the number of active customers declined 10 per cent to 9.9m, while revenue from continuing operations fell to £270m from £300m.
Earlier this month the company convinced its lenders to extend its debt arrangements until 30 September and sold its US unit for £26m to raise funds.
CPP’s founder and majority shareholder Hamish Ogston, who floated the company at 235p in 2010, has offered 1p a share to take the firm back into private hands.