CPP’s shares plunge as FSA probes sales

 
David Hellier
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SHARES in CPP, the recently-floated credit card and identity theft insurer, fell 46 per cent yesterday to 150p following its after hours statement on Monday revealing that the FSA had been examining “alleged failings in sales calls with customers”.

The share price fall is embarrassing for JP Morgan Cazenove and UBS which floated the FTSE250 group on the stock market last March at a price of 235p.

The collapse is also bad timing for Hamish Ogston, the entrepreneur who founded the company and still owns 57 per cent of the shares, since his lock-up period ends shortly, leaving him free to sell some of his stake.

One of the larger investors, Andy Brough from Schroders, suggested that the company was now hoping to avoid a crash landing: “The oxygen masks have dropped from the ceiling and we’re sitting tight.”

JP Morgan’s research analyst Victoria Pryor was sticking by the company yesterday.

She said the suspension of thegroup’s under-fire ID protection policy would affect profit estimates but concluded that the group’s international businesses offered good long-term opportunities. JP Morgan’s target price is 361p.

Some bankers said CPP’s problems might affect sentiment in the IPO market.

“This could put somebody off investing,” said one banker, “but you could take the view you could make up the losses on a new float.”