Good morning, everyone, and a very warm welcome to the GBG results announcement for FY24. Thank you to everyone who's joined us either via webcast or here in person in the room in London. Today marks my first results presentation as CEO, and I'm excited for the opportunity to share my thoughts four months into the role. I hope you'll observe a different tone in today's presentation and that I'm able to give you an indication of what's to come. Our agenda for today is relatively straightforward. Once I've finished my introductory remarks, David Ward, our CFO, will take us through the financials. I'll then be back to share my first impressions since assuming the role of CEO, what I've been up to in those first four months, and what I see as our initial focus areas as we look ahead to FY25.
One of the first impressions I can cover off now, though, is that we are very fortunate at GBG to have some outstanding talent in the business. Several of the global leadership team are here in the room with us today and play testament to that fact. Before I pass to David, I'd like to acknowledge the role he has played in helping me get settled in my new role. In a relatively short space of time, we've built a strong relationship, and I look forward to working even more closely as we build this business to the next level. David, over to you.
Okay. Thank you, Dev. Hello and good morning, everyone. Thank you for joining us. Overall, I'm very pleased with the results for our financial year 2024, which are in line with the trading update that we released in April and represent a successful execution of our financial plan for the year. We had a strong focus on cost effectiveness and simplification, and as a result, we have delivered structural savings that we expect will benefit us into the future. Our continued focus on growth initiatives led to us achieving the acceleration in year-on-year growth in quarter four that we had expected and built into our plan. This improved revenue growth of approximately 5% on a constant currency basis was primarily driven by the acceleration in the identity segment as a result of improving trends in both the Americas and in EMEA.
This has provided us with positive momentum going into our new financial year. Before I take you through the results in a bit more detail, first of all, I'll give you a summary of the key headlines. We delivered revenue of GBP 277.3 million, which represented 2.7% year-on-year constant currency growth. Perhaps more importantly, we did see that growth acceleration that we had expected in quarter four. That improvement in identity has also improved our group NRR, which increased 580 basis points to 98.1%. We delivered at least GBP 10 million of annualized cost savings. This was despite general market inflation pressures, and we saw GBP 8.8 million of those savings reported in the year-on-year numbers. That helped increase our adjusted operating profit by 8%, excluding the large FX gain of the prior year, and improve our operating margin by 170 basis points to 22.1%.
On a statutory basis, we did record a loss due to the non-cash goodwill impairment charge from the first half. And finally, the combination of this higher profitability and cash conversion returning to a more normal level for us meant that we were able to reduce net debt by GBP 25 million to GBP 80.9 million. So now let me take you through the income statement in a bit more detail. On a reported basis, revenue declined 0.5%, but on a constant currency basis, revenue increased 2.7%. That's a slight acceleration from the first half when growth was 1.8%, with growth in the second half being 3.5%, including that already mentioned 5% growth in Q4. As expected, our gross margin returned to a more normal 71% in the second half of the year, bringing the year as a whole up to 70.1%.
Adjusted operating expenses reduced by 6.3%, or GBP 8.8 million, year-over-year as a result of our sharp focus on simplification and efficiency. I have a slide with more detail on cost later, so I will come back to this topic, but it is worth noting at this point that the reduction you see here is net of inflation on our cost base. We had a charge for bad debts, or ECL, as they are now known, of GBP 0.8 million versus a small credit last year. As I've already mentioned, the FX retranslation difference has returned to a more normal level this year, and we recorded a loss of just GBP 0.2 million versus the unusual gain last year of GBP 3 million.
Bringing that all together, that led to an adjusted operating profit of GBP 61.2 million, which represents an operating profit margin of 22.1%, an improvement of 60 basis points, or 170 basis points, as I mentioned earlier, excluding the unusual FX gain of the prior year. As expected, given the higher interest rate environment, our net finance costs increased over the prior year to GBP 9 million, but we are making good progress with the repayment of our debt, and you never know, we may yet see some rate reductions in our FY25. Do remember that the majority of our debt is denominated in US dollars, and so our interest is charged with reference to the Federal Reserve Bank rate.
Finally, on tax, our effective adjusted tax rate was 25.2%, which, as expected, was higher than the prior year due to the increase in the UK tax rate from 19% to 25%, which occurred at the start of that financial year. Looking beyond adjusted operating profit, we have amortization of acquired intangibles of almost GBP 40 million, with the main reasons for the variation between the two periods being the impact of FX, but also some impact from some intangible assets becoming fully amortized during the year. The share-based payments charge for the year was GBP 3.5 million compared to GBP 2.3 million in the prior year, and the main reason for the increase was the fact that last year we had GBP 1.1 million of credits in respect of previously issued share options, which we no longer expected to vest. There is the non-cash impairment charge of goodwill of GBP 54.7 million.
This arose at the half year, and that value has remained unchanged here. You'll remember that the cause of that was the use of a higher discount rate driven by the increases in central bank rates since the previous assessment. The other exceptional items came to a total of GBP 4.9 million, and these are entirely related to the enablement of our initiatives on operational simplification and efficiency, and ultimately the delivery of our cost savings. Now on to our segmental performance. Firstly, in location, which represents 29% of the group, we're very proud of the resilient growth rate that we have continued to generate, with 7.3% constant currency growth in the year. That means an 8% CAGR over the last three years, and that's at a time when some of the key sectors for location have been suffering subdued volumes due to macroeconomic pressure, retail, for example.
That growth, combined with careful cost control, has led to the contribution margin improving to 40%. Some notable customer successes for the location segment include supporting e-commerce expansion with big brands such as New Balance, Kurt Geiger, and Marc Jacobs, while also capturing growing demand from our large and diverse customer base and partner base, including HelloFresh and Aldi, who we have helped expand into additional territories, and Reltio, who are our master data management company. We are also helping to facilitate the efficient customer checkout journey for some of Asia's largest e-commerce marketplaces to enhance address accuracy as they experience growing cross-border demand.
As we have commented on previously, we continue to see greater convergence between our fraud solutions and the identity segment, where increasingly customers are looking for help with fraud detection as well as regulatory compliance, and this is a real point of differentiation for us given the breadth of our solutions. In identity, we had revenue of GBP 156 million, representing 56% of the total group. The main story here was the improving growth trend in quarter four, which we had expected once the comparatives no longer featured some of the pre-correction volumes from some of our internet economy and fintech customers that we talked about last year. Our margin remained resilient, and this is the area where we know there is significant operating leverage opportunity when we do see higher transaction volumes.
Notable customer successes in identity included demonstrating our differentiation for customers with a need for global rather than just regional capabilities, with customers like AIG, Atlantic Lottery, Currencies Direct, and SumUp, who all utilized our expanded international data sets coverage, while investment platform Webull chose GBG as its end-to-end onboarding partner in both EMEA and APAC. In Americas gaming, we continue to leverage our unrivaled sector knowledge and expertise, and we had success with customers such as ESPN Bet and Bally's. And demonstrating my earlier point on the increasing convergence of identity and fraud, Floer chose our mobile fraud signal solution with an upsell to our fraud monitoring capabilities, and Tide selected Multi-Bureau for improved match rates together with our new trust solution. In fraud, we followed up two very strong years of growth with three further quarters of solid growth. In FY24.
As we had expected, growth did slow in the fourth quarter, but overall growth was almost 8% in FY 2024 and took our three-year CAGR to 15%. The slower growth in the fourth quarter does represent the start of a quieter period for us in terms of customer license renewals, and we do expect that to continue into the first half of this new financial year before a better second half. So you should be mindful of that split dynamic for growth for our new financial year. Notable customer success in frauds included strong progress on geographic expansion, particularly Southeast Asia, and you will remember that was a focus area for Dev when he was in his previous role, and we had significant sales of our fraud monitoring solutions in banks in both Indonesia and Thailand.
Plus, robust demand for our specialist fraud investigation capabilities in the U.K., which include emerging use cases, for example, working with one of the U.K.'s leading transport firms to support revenue protection on its bus network and supporting U.K. Companies House in investigations related to new economic crime legislation. On this slide, I have provided more detail on our revenue dynamics. The high-quality proportion of our revenue that we define as repeatable has continued to increase, now at 95% of total. You can see from the chart below that we have grown subscription revenues nicely over the last three financial years. You can also see how the absolute pound values of services and hardware revenue have reduced over the last three years. This has been a headwind to overall growth rates, particularly as FY24 was another quieter year for hardware sales.
From the revenue bridge chart, you'll be able to see the analysis of our constant currency growth rate of 2.7% between retention and growth of existing customers versus revenue from new customers. As we expected, net revenue retention has begun to recover from the low point of FY23, and across the 12 months of FY24, we successfully improved NRR to 98.1%. This is still relatively new KPI for us to be reporting. It may also be of interest to note that the timing of the fraud segment revenues can distort NRR somewhat. So excluding fraud, NRR actually improved 790 basis points to 99%. We were also particularly pleased with the level of revenue growth attributable to new customers, one in the last 12 months, which has been maintained at 4.6%.
I have kept these two charts in the presentation as I've used them before, but really the end market sectors where GBG earns its revenue haven't really seen any particular shifts in the last 12 months from the prior year, and our broad differentiation remains a strength of the GBG group. But it is probably worth clarifying that in terms of crypto exchange customers, that remains a very small proportion of group revenue at just 1%, and there was no pickup in Q4. From the analysis of revenue by geography, you can see that the decline from the U.S., given the tough comparatives for three quarters of the year, also highlights the opportunity open to us now that the business is showing early signs of returning to growth.
I've mentioned at least once this morning how we made significant savings on an annualized basis amounting to GBP 10 million and how that is the net figure after the effects of inflation, which for us has been running at about mid-single digit. We also achieved that figure of GBP 10 million by the half year. You'll remember me talking about it at that stage. In the second half, we realized additional savings of a few more million GBP, and Dev and I have redeployed these second half savings into a few strategic priorities, and you will hear from Dev shortly when he outlines our focus areas where we have made those investments. We achieved these savings by relentlessly focusing on simplification: simplification of the technology portfolio, simplification of the number of priorities that we are all working on, and simplification of our operations.
Overall, that led to a reduction in our headcount through the year of approximately 8%, which we achieved through not replacing natural attrition, tougher performance management, and there was also some paid redundancies. There are a few more details of the areas of our business we focused on for savings included on this slide, but I don't intend to spend much more time on them today, as I've already covered them at the half year. Just to say that despite the significant cost savings we've delivered in the year, we are continuing to invest in technology and innovation, and we feel well equipped to capture the future market opportunities, including the potential operating leverage. Just two more slides from me.
My penultimate slide covers cash generation, and I'm pleased to show that our cash conversion has returned to a level more aligned with our history and forward guidance at 90.6%. That led to free cash flow generation of GBP 35.2 million, despite the net outflow of just over GBP 4 million related to exceptional items and a relatively high interest charge, which we really hope will be starting to come down from here through the combination of repayment of the debt and hopefully some lower rates of interest. You will see that we had a GBP 4.9 million outflow for working capital. There were really three significant movements in that number. Firstly, there was an increase in our trade receivables. Secondly, there was an increase in our trade payables as a result of, for example, bonus accruals returning to a more normal level this year-end.
Finally, there was an increase in accrued revenue, and you will remember that our accrued revenue represents the difference in timing between the recognition of our revenue and the timing of invoicing our customers. That's particularly noticeable in fraud, where we do sometimes have customers on multi-year renewals, and there can be a difference. As I've talked about, we had another 3 quarters of strong growth from fraud in the year just reported. We use that free cash flow to pay our dividend, and we pay some of our revolving credit facility. We were pleased to achieve and actually slightly exceed our target of reducing our debt leverage to 1.3x by the end of the financial year, and so representing net debt of GBP 80.9 million at the end of March.
Today, we have announced a recommended final dividend for FY24 of 4.2 pence per share, which we expect will require a total cash outlay of GBP 10.6 million in this new financial year, FY25. So on to my final slide. We are today reiterating our guidance for FY25, which was first outlined in our April trading update. Firstly, we expect mid-single digit top-line growth. That will drive high single-digit growth in adjusted operating profit, given the great work on cost efficiency that we completed in FY24. And finally, we expect a continuation of our cash conversion returning to a normal level and being in the range of between 90%-95%. Our confidence in this outlook is underpinned by our improved momentum in the last quarter of FY24, combined with the impact from our current operational initiatives.
That brings me nicely actually to my handover back to Dev, who is going to share his perspectives on his first four months in the CEO seat.
Thank you, David. Now, since I took up my role as CEO, I've been working with David and the global leadership team to take stock of where we are and to think about how we can accelerate our business moving forward. Over the past four months, I've spent time better understanding the parts of the business that I wasn't directly exposed to while I was leading the Asia-Pacific region. I've engaged with teammates around the world, met a number of customers, met our partners, participated in trade events, and of course, other key stakeholders such as yourselves.
These interactions, together with my own experience of GBG and my longer time in the industry, have helped shape my first impressions and inform our current focus areas. I want to start by making one key point. GBG is a hugely successful business with an impressive track record. Hearing David describe our financial profile and some of our key financial indicators, I was again struck by the fact this is a high-quality business. I feel really fortunate to be leading a company that has market-leading positions in the markets we play in today and one that is financially strong, giving us opportunity to grow it further. Our job is to deal with the issues we have and deliver on that opportunity. Coming into this role, it was really clear to me that my biggest immediate priority was to address our recent underperformance in the Americas.
I'll talk later about some of the things we've done to improve our trajectory there, but having made half a dozen trips since the turn of 2024, I'm confident that we have the right to win there and that the opportunity for GBG in the Americas is significant. As I said upfront, while I'm still four months into my role as CEO, I have been with the business for three years before that and in the industry for more than 15. That experience gives me high confidence there's a good deal of scope for us to make operational improvements that can and will improve our execution. There are a number of things, for example, that I've put in place during my time leading Asia-Pacific that I think can have an even bigger impact when we implement them on a global scale.
Lastly, something I think that you will all agree with me on, at GBG, we can be simpler to understand. As I've spent more time with our people, customers, partners, analysts, investors, it struck me that it's been really hard to find two people who can describe what we do in the same way. That's, in some ways, understandable. What we do is not something that was developed overnight, and we have a broad set of solutions. For a business of our size, roughly 1,000 people, I feel that complexity has become a speed bump. Let's start there. Let's talk about what does GBG stand for. To align us all behind a simpler common identity, we've created a new elevator pitch for GBG.
Before I share it with you, I want to add some context to bring to life why this has been a really important early milestone. I mentioned earlier that I've been lucky enough to attend a number of customer events and trade shows as part of my induction to this role. Earlier this year, I found myself at one such event in New York for our location business with David Green. It was a fantastic event held at the Nike House of Innovation on Fifth Avenue. But towards the end of it, I overheard quite a troubling conversation. It was between a potential customer and one of our sales team.
The question went something along the lines of, "So tell me, what does GBG stand for?" I listened intently as that individual struggled to come up with a plausible description of what the letters G, B, and G represented. While it was somewhat amusing at the time, my mind immediately went to the fact that this was a real lost opportunity. My mind then went to, "How many times must this be happening right across the business?" In speaking to that customer later, I found they had both a need for global address validation because their business was expanding cross-border, but they'd also been targeted by fraudsters. This was someone that really needed to know what we stood for. So since then, as a team, we've worked swiftly to create our pitch and, more importantly, put it into the hands of our people.
That pitch is on screen now, and it's really helping to unite our people. In crafting it, it's really underscored the strength of our business. Rather than reading it to you, I wanted to look at it as three key components. Firstly, the increasing relevance of GBG. Secondly, our competitive differentiators. Then finally, how we support more than 20,000 customers across two global use cases. Let's start with the relevance of GBG, both today and how that will only increase as we look ahead to the future. As a company that powers online commerce, we have access to a multi-billion GBP market opportunity. That market will only grow as the world becomes increasingly digital.
I don't think you need me to take you through some of the mega trends that are shaping our market, but it might be helpful for me to remind you how these drive our growth. So firstly, in terms of digital transformation, UK high-street banks such as Santander want to reduce costs and realize efficiencies as they rationalize their branch networks. They look to GBG to support them as they move their traditional banking methods to both online and app-based. Regulation creates new sources of demand for us. For example, in Australia, soon 140,000 organizations will need to be compliant with AML regulations. That's up from just 14,000 today. As smaller businesses like lawyers, accountants, and real estate agents will come into scope for compliance.
The same can be said of the prevalence of fraud and financial crime, which, with increasingly sophisticated fraudsters, we see the market needs increasingly sophisticated solutions, and that drives demand for GBG's anti-fraud products. Just last month, we shared how our fraud consortium in Malaysia had stopped MYR 500 million in fraudulent credit applications within the banks that subscribe to our service there. And then finally, customer experience continues to be an area of high focus for online businesses in an increasingly competitive marketplace. And here we see players such as Bet365 turn to GBG to improve their onboarding journey through a mix of our address validation and our identity fraud propositions. Our markets have structural growth. They are fast developing. Our ability to continually innovate will be really important to ensure we capitalize on new and emerging trends.
So now let's look at what makes GBG stand out from our competitors using some of the hooks we built into our refreshed pitch. In the past, we've spoken consistently about the strength of our three building blocks: the most relevant compliant data assets or data sets, technology that can scale to handle billions of transactions, and talented experts that our customers trust. What we perhaps haven't spent enough time on is how these three core ingredients help deliver competitive differentiation within our target customer segments. So let's take a look in a bit more detail around why we win. A common misconception I've observed about GBG is that we have this massive global data set, and we make that available to customers in a raw form. In fact, the reality is somewhat different.
We combine our data sets with our technology and our expertise to enable customers to make decisions, providing organizations with actionable insight. Secondly, those decisions are not trivial. They enable our customers to grow, expand their customer base. Again, it feels at times we've been misunderstood here. We are not, and we will never be someone who helps tick a compliance box. We're a value-adding partner, and we're able to grow with our customers, further illustrated by how quickly we can deploy new capability such as international data that David mentioned. Thirdly, as you'd probably expect, the breadth of our solutions is a real differentiator and continues to be so. It means we are able to outperform point solutions such as behavioral biometrics players who have a much narrower focus. Indeed, in an age of vendor consolidation, we're actually able to integrate these providers into our more complete platform.
And our global reach means we can stand apart from regional players who have spent time focusing on a single geography. And finally, GBG is a secure and trusted business. Our platform resilience means we are always on every second and there when it matters most for our customers. Our investment in data compliance and data security is another reason why organizations choose to work with us. So there's a lot to be proud about. And as we look ahead, I really want us to dial up the narrative about what differentiates us, what makes us better than others in the marketplace, and truly stand out in a fragmented place. Finally, let's talk about how more than 20,000 customers around the world work with GBG.
Across two global use cases, helping organizations reach and helping organizations trust their customers, we support some of the world's best-known businesses, including financial institutions, retailers, system integrators, payment providers, and gaming platforms. Our relationships with these businesses have been built over many years and have really lasted the test of time. When we describe how we help organizations reach their customers, there's a couple of things that come to mind. For many years, we've helped with optimizing the consumer journey. Our type-ahead software has enabled retailers like Nike to drastically reduce the number of keystrokes needed by a consumer to build a validated address, improving conversion rate. However, more recently, we've been enjoying success with financial services and fintech customers in leveraging our address validation in their back-end processes to improve their match rates and increase their conversion rates with new customers.
Our relationship with Mastercard is a good example of how we do this. And then when we talk on the right side around how we help organizations trust their customers, we've built a really strong heritage in EMEA within the gaming segment. As that gaming market liberalizes in the U.S., that reputation is giving credibility to us to support platforms like FanDuel rapidly onboard new customers as new states open up to gaming in America. With only a third of the U.S. market accessible today for online and mobile sports betting, this is an enduring opportunity for us to build upon, in particular as South American markets follow suit, such as Brazil and Peru. Secondly, in trust, our best-in-class international data coverage is an asset that we are really proud of. We've spent time making material enhancements to it in the past 12 months.
Through that product, we help Western Union, for example, confidently and safely expand and operate across borders in a way that no other provider could do for them. With such an enviable customer base, it's imperative that we become better at presenting a globally aligned message, support our largest customers in a more joined-up manner, and maximize the opportunity to cross-sell where relevant. Now let me turn to what have been and will be the key focus areas for me and the team as we look ahead to FY25. What I've heard from our people, customers, and other stakeholders since becoming CEO of GBG four months ago tells me that we need to evolve. Given what I've shared up to now, hopefully, it's clear there are four focus areas that we are prioritizing. The first, removing complexity.
The elevator pitch has been an initial rallying call for that and helping us keep things more simple. Second, being globally aligned, better leveraging our size and scale. Thirdly, driving high performance, standing out from our competitors and winning more in the marketplace. And finally, differentiating through innovation, making focused investments to grow our competitive moat. You've already heard David talk through the financial gains we've captured through our simplification and efficiency program. We see this as a lasting benefit and expect it to continue to drive leverage as our business grows. But simplicity is about more than that. It's also about us being easier for stakeholders to engage with us, including customers. From a customer perspective, we've made good strides on single global agreements.
Most recently, we launched a single data processing agreement, meaning that customers now only need to sign one set of privacy terms when they sign up to GBG services. It's also about taking stock of our product and technology stack, rationalizing investment in legacy point solutions where they no longer fit with our core business model or our future growth plans. And David's talked a bit about how we're doing that. Removing complexity is easy to say, but I think it's really important for us to deliver on, as I believe all winning starts with simplifying. And I'm confident our focus on this pillar will accelerate the pace of execution across the other three. Next, let's talk about how we've been making steps towards being a more globally aligned business, focusing on two global use cases: reach and trust. We've continued to reorganize ourselves to drive global accountability.
We've appointed a global chief product officer and a global market development director, among others, to drive more consistency in our go-to-market of our identity fraud business. Gus Tomlinson and Anthony Kay are both here in the room today, and they've both spent a significant chunk of their initial time in the Americas, as we've shared talent and best practice from our EMEA business with our colleagues there. The pictures on this slide are testament to the effort we've placed on increasing visibility of our leaders, both in the business and in the Americas, since I was appointed as CEO. We've also doubled down on our differentiators. We've, for example, let our U.S. customers know about the strength of our international data. It's a great example of how we're starting to target an increased share of wallet from our more global accounts in all of our key markets.
Lastly, in order to maximize the strength of that 20,000 customer base I talked about, we've kicked off work to build standardized playbooks to drive cross-sell into different customer cohorts. We'll be coupling this with renewed incentives for our teams to better collaborate on such opportunities and hope to see material progress. Moving now to performance culture and building and driving high performance. Everything we've talked about up to now demonstrates our right to win in several areas of the market, but we can't succeed unless the team is focused on winning. I am personally passionate about driving a high-performance culture where everyone is determined to outperform our goals and celebrate our successes. We want to change the tone at GBG. To do this, we are focusing our efforts on improving our execution in the Americas.
I've already spoken about my conviction behind the market and the opportunity that GBG has there. I've referenced on the last slide how we've approached our U.S. challenge as a team sport. Under more stable local leadership, we've refreshed and we've upgraded our talent in the go-to-market team, and we're pleased with our initial momentum, although it remains an ongoing effort. We've rolled out a high-performance leadership program for senior sales, senior product, and senior technology leaders. This investment is changing the language in the business and driving a more positive mindset in what I have observed in the few short months since we kicked it off. We're being more front-footed in our competitive positioning. Like me, you've probably lost count of the number of times you've seen identity fraud providers use a man in a hoodie to symbolize their proposition.
Have a look if you haven't already done so. Now, contrast that dull, unimaginative image to the vivid campaign that we unveiled last week, literally letting our big bad wolf loose at Money20/20 in Amsterdam, bringing to life the challenges our customers face in onboarding new customers, where it's not so obvious who are the heroes and who are the villains. The reaction and coverage we received from the event far surpassed our expectation and has given us confidence to be even more bold in our messaging moving forward in the market. Lastly, next week, I'll be hosting 60 of our highest performers from around the world in Montenegro. Again, another investment that we're making and just one example of the things we're doing to put the right level of focus on rewarding those who make GBG go faster.
Then lastly, of the four pillars, differentiating through innovation. Here, to ensure that we can keep supporting our teams in winning, clearly, we need to provide them with innovative solutions and differentiated propositions. Leveraging the cost efficiencies that David mentioned, we've made targeted investments in our product roadmap. GBG Trust is a flagship solution for us and one we have a high degree of conviction around. And I'll share more on developments there in a moment. That conviction is also fueled by the ability it gives us to extend our data leadership by building a proprietary data asset, one which exploits our position as a data controller and allows us to respond quickly to the rapidly changing fraud landscape in a way that other providers cannot match. We continue to focus on deploying our services through a single integration.
A great example of this is how we've recently deployed our locate products into the Shopify marketplace, enabling customers to seamlessly leverage our solutions. Similarly, we're continuing to build out GBG Go and have made progress on building connectors between the Go platform and our core identity solutions. We have, though, taken the opportunity to broaden the scope of our investment in Go so that it can leverage more recent developments like GBG Trust, which will ultimately, we believe, improve the long-term effectiveness of the product. So in summary, there is a lot of great work taking place at GBG, but I really feel we can do a better job in how we amplify that.
Take, for example, the recent work that our team in Australia have done with the venture arm of the Commonwealth Bank of Australia, helping them launch the TrueU app in response to high-profile data breaches in that market. As you can see on the screen, the app notifies users as soon as their identity has been used. And if it wasn't them requesting the verification, they can block that request immediately and notify a case of fraud. It's early days, but it's a really great reminder of what we do as a business, not just for our customers, but also for their consumers. Now, as promised, I wanted to go a little deeper into GBG Trust because I think it neatly brings those four focus areas to life and illustrates how I think they will accelerate our growth.
For those who need a quick refresher, GBG Trust is our proprietary global identity network that's built to tackle identity fraud as it occurs across our network. Its comprehensive rules engine constantly interrogates the 500 million consumer identity records flowing through GBG Solutions and provides insight both into positive data and suspicious anomalies to help our customers recognize good, reward great, and reject bad prospects at the very first point of contact. And here's how it plays to our focus areas. Firstly, GBG Trust is a globally aligned solution with a highly correlated product roadmap across our key regions to tackle the highly correlated fraud trends we see in each of them. It's now a consistently branded solution. No longer do we have the complexity of navigating three product names in the three markets we serve it in, GBG Trust.
We've created common marketing collateral, pooling investment across the business to increase market awareness and double down on its competitive differentiation. Clearly, it's highly innovative. The solution is augmented by AI and goes far beyond regulatory compliance. We believe it prevents identity fraud in a way that cannot be easily replicated in a compliant manner. I'm pleased to say we've made really strong progress over the second half of FY24. In a relatively short period of time, we have enlisted more than 600 data contributors globally, all of which have signed data privacy terms with GBG. The network has scaled beyond 50 million records. To put that into context, that's more than most other fraud networks and consortiums have been able to amass over multiple years of operation.
Now, while I could reel off more statistics on the progress we've made, I think the most powerful pieces of this slide are actually the customer testimonials from a UK fintech who saw ROI within 17 days and a tier-one Australian bank who took down fraudulent account opening by 70% having implemented trust. In terms of what's next, many things, but one of the things we are most excited about is to understand if GBG Trust can further benefit from the very large number of transactions going through our location platforms. In summary, there are three key reasons that give confidence in our ability to deliver sustainable value. Firstly, GBG is a strong business in attractive markets with structural growth. If you take one thing away from this session, it's how excited I am to be leading GBG through this next phase of the journey.
Secondly, while we have performed well in many areas of our business over the last few years, we recognize there is scope for us to improve execution, and we're on it. We're clear on our areas of focus, and we're encouraged to see momentum build as we make progress on those areas. As David highlighted, we saw an improvement in performance towards the end of FY 2024, and we have begun 2025 in line with our expectations. Thank you for your time. I think it's now time for questions, which David has kindly helped to agree moderate today.
Okay. So as we move into questions, we will be taking questions just from the room. But please be aware, we are joined on the webcast by additional people. So please, when I come to you for your question, if you could just say your name and your institution you're representing.
And then before you ask your question, that would be appreciated. Okay. Lots of hands, which is excellent. Tintin, we'll come to you first, please.
This is Tintin Stormont from Numis. Two questions for me. Could you remind us of the,
sorry, Tintin. I forgot to say, could you press the button to activate your microphone in front of you? My mistake. Okay.
Very high-tech individual mics. Tintin Stormont from Numis. Two questions for me. First on trust. Could you remind us of the business model? And is it still the case for you to join the network, as it were? It has to be mandated that your key identity verification provider has to be GB Group, so providing some sort of protection there from you guys.
And then secondly, in terms of the 20,000 accounts or 20,000 customers, are you able to talk through, for example, within that key global accounts and the approach you're taking in terms of the opportunity within those bigger customers that have global requirements and the opportunity, for example, to take share from, for example, if they're taking multiple vendors or using multiple vendors, the opportunity to take more share from them?
Yeah, I'll take those. Thank you, Tintin. Good questions. So firstly, on trust, the 600 data contributors that we've signed up who have signed terms with us are GBG customers. So they are using our identity verification solutions, and that's how they're contributing records to us. I think the data privacy terms is a really key thing to call out. As Lara would attest, those are not simple things for us to get contracted.
So it adds to the stickiness of the solution if someone's prepared to share their data with us. And therefore, at the moment, we're working on the basis that they have a GBG solution in terms of the reciprocity that exists. And then on the 20,000 customers, so yeah, quite a lot for us to segment, and we're working through it at the moment. An area we're seeing a real sweet spot in is cross-border e-commerce because as companies are scaling up their operations and growing rapidly, we're seeing a need to also enrich potentially global address with global identity. So we're currently working through, and actually, it's a job that the high performers are working on next week when we have them together. We're working through really segmenting that customer base to understand where we can cross-sell and sharing some standardized playbooks. So customer looks like this.
This is the playbook you should take to cross and upsell. Thank you, Tintin. Come to Charlie. You're next to Tintin.
Hi. Yeah, it's Charlie Brennan from Jefferies. I'll just go with three questions if I can. Firstly, Dev, you've given us some levers of optimism going forwards, but can you just lay out the building blocks that are needed to get us back onto a double-digit growth trajectory, or do you feel in a post-COVID environment, double-digit growth is a challenging ambition for you to have? Secondly, you've talked about simplifying the technology stack and getting rid of some legacy products. Do we have to think about any revenue attrition as you work through that portfolio? And then lastly, can I just come back on the working capital? It's not entirely clear to me what's happened. The accrued income's up GBP 7 million.
The constant currency growth in fraud is only 3%. So it feels like it's a bigger issue than just fraud. Then you spoke about multi-year agreements in fraud. Have you specifically gone through a strategy to shift people from one-year to multi-year contracts, and is that what's driving the working capital?
Thank you. Yeah, I'll go first, Dev, and then leave you to come in later. Working through tech simplification is probably the first one to start with. I think as I covered and Dev alluded to as well, it was an area of focus for us over quite a number of years where we've done acquisitions. Clearly, we've ended up with quite a big and broad technology portfolio. So it became an opportunity for us to be able to rationalize some of those activities and drive some savings. That was a prioritization debate.
There were very few products that we've completely culled all investment into, but there are a few more where we've really rationalized it and been able to redeploy some of that into some of the things that Dev talked about that, frankly, at the moment offer a bit more excitement for us, things like Trust and Go as examples. So no, don't really expect too much in terms of revenue impact moving forward. I think as I alluded to, we are bringing, well, actually, the market is bringing us to a more converged identity and fraud position. So you should probably expect us over the next couple of years to move to probably reporting those two a bit more closely together as we are, frankly, combining our resources internally along those lines a bit more already. So that's tech simplification. Working capital, sorry, that's still not clear, Charlie.
But so overall, there was a working capital outflow in the year. I mentioned that in my presentation. Three main elements to it, one of which, as you say, was to do with accrued revenue. Accrued revenue did increase in the year. It actually increased. The majority of that increase came through in the first half. There was a bit more in the third quarter. And really, that represents the fact that, particularly in fraud, where the majority of our accrued revenue balance sits, we have had a strong cycle of renewals. We have always had some customers that have been on a multi-year arrangement. And under the revenue recognition standard, when those customers renew, you get a revenue event. And sometimes the cash profile can be a bit different.
We're not seeing anything different in terms of trends, and it has not been a significant push for us to move customers to multi-years, certainly not with a revenue event. Clearly, we do like multi-year arrangements with customers. It gives us security of revenue. But wherever possible, we do stick with annual delivery of the software, which means that we still get the annual revenue event. So it hasn't been a significant push. Clearly, it's a topic you're interested in, Charlie. So I think what I would say is, having had such a strong period for fraud, I've talked about it being a bit of a leaner period through Q4 and the first half. So I think you could expect that dynamic to play into that accrued revenue balance moving into our new financial year. And your final question, I did make a note of it, was optimism and growth trajectory.
I know you're going to want to hear from Dev, but I'm going to jump in first. As I think we've been pretty clear today, Dev's four months in his new chair. I think we're asking for some level of patience as we work through Dev's outlined his four pillars of growth. I think hopefully you've heard from both of us how excited we are about the opportunity. But our focus today really is to reiterate our guidance for the near term, which is the current year, FY25. Clearly, we both believe there's more opportunity than mid-single-digit growth. But I think bear with us while we work through those, and we'll come back to you on what that picture might look like. Okay. Kai, please.
Thank you. This is Kai from Canaccord. Just another question on the more specifically situation in the U.S. and the expected growth acceleration.
I'm just wondering what will drive this from a secular perspective. It feels like a lot of the startup economy type dynamics probably aren't going to be as buoyant as during COVID. There's probably a lot less white space opportunity, I would imagine. So I'm just wondering kind of how do you see that growth acceleration and what are the two or three key drivers? That was the first question. The second one was around generative AI and sort of adjacent cybersecurity, but also fraud tech markets, obviously enabling fraudsters to come up with new ideas, new tools, new pathways. Just wondering, how do you intend to leverage that from a sort of defensive perspective, but also perhaps internally for efficiencies? And then the third one was just around the RCF. David, I understand I think there are scheduled amortization payments.
Can you accelerate those so there's an opportunity to prepay faster to get those interest costs down? Thank you.
Maybe I'll take Americas. And then you can come back to that last question, and I'll come back to GenAI. Do a bit of ping-pong. So on Americas, I think really pleasingly, we are seeing an improvement. I think we talked about acceleration in the fourth quarter, and part of that was our Americas business returning to growth. In terms of what will drive it, I think we talked about gaming as a big opportunity for us and the heritage we have there. But frankly, we've also got quite a bit more that we can take to some of our longest-standing American customers. So I talked about how we've rebuilt the go-to-market. We're re-engaging with customers who may not have heard from us for longer than they should have.
We're taking to them some of the really great tools and things that we've not just developed in Americas, but also in EMEA, things like international data. We're seeing a good pipeline for that at the moment. High level of confidence that we will see growth continue. I'll pick up the question on the revolving credit facility, the RCF. That's our debt tool that we have in place. It is fully flexible. We actually. I'm happy to share a bit more detail. We actually are able to make repayments and draw down at least twice a month, but it's fully flexible. For example, cash generation post-year end, we've actually used to be able to repay, make some further repayments. But the chances are we may need to draw some of that back as we get towards the payment of the dividend I mentioned earlier.
That's going to be GBP 10.6 million. So it is fully flexible. And we make use of it to obviously try and maximize working capital operations, but also minimize that interest charge. And then just coming back to the question around AI. So I think we've talked before about how we see AI generate more demand for solutions. So obviously, fraudsters taking AI and leveraging it in their techniques. And we have for many years now used AI machine learning in our capability. I think what we're thinking about differently is that, firstly, when we talk about why our conviction on trust is high, trust is a proprietary asset, so therefore harder to be spoofed in terms of what's in there. So that is something we feel is AI defensive. And that's why one of the reasons I'm really excited, given my background around what that could do for us.
I did talk in my section around being better at amplifying what we do. I think there is a bit of a misconception around our use of AI in the business and how much more we are actually using it. I think we've got more than 120 software engineers using Copilot at the moment, and we've seen a 22% lift in productivity, for example. 94,500 lines of AI-suggested codes accepted into production last month. There are some really good stats around AI that I'm happy to take you through. And then lastly, your point around internal efficiencies. So in two weeks, we will be launching a company-wide AI hackathon for everybody in the business to think about how they can become more efficient and more productive. Our legal teams are leading the way.
We've just selected a legal AI tool that will help us redline more quickly and have a first pass. And we're on that journey towards driving productivity through AI. Excellent. Still three hands up. Excellent. Gotham, we'll come to you next, please. Thank you.
It's Gotham Sherborne from Berenberg. A couple of questions from my side. Can I start on a question regarding the competitive landscape? Over the course of the last few years, we have seen quite a few VC and PE-backed startups come into the broader REGTEC space. Are you seeing more price competition in any of your geographies and segments? And when you win and when the customer takes a solution, how much of that is on functionality versus price? Secondly, on GBG Go, do you see more appetite for a low-code, no-code solution from your customer base who typically have gone for more broader implementations?
Last question on profitability. Can we touch upon the gross margin trajectory? Obviously, the gross margins improved significantly in the second half versus the first half. Are those two H levels now sustainable? And broadly, on the OpEx cost base, is there more room for more operational efficiencies? And if there is, would that be returned into the P&L or reinvested in the platform? Thank you. Can we just start with that? We'll work backwards, I think, through that list. Good list. Thank you.
On OpEx, we talked about GBP 10 million of savings that we had already identified and generated in the first half. I talked about the fact that we had found a few more million in the second half, which at the moment, our plan is to redeploy those. And we're busy doing just that.
Overall, when we think about the new financial year, inflation for us is still probably running at about mid-single digit, so 4-5 probably. But we probably expect a bit less than that increase in terms of OPEX. That's really the full-year benefit of some of the initiatives that we had last year. In terms of further to go, that's actually not our focus at the moment. Our focus is, as you've heard from us, that was our focus from last year. We actually expect a bit of a cleaner year this year in terms of exceptionals, so probably as we currently expect, 0 exceptionals. Our focus is much more, as you've heard from Dev, we are still going to look to remove complexity, but that doesn't always mean cost savings. Our focus is much more on growth. That's OPEX.
Gross margin trajectory, yeah, thank you for observing. It was better in the second half, so 71%. I think the first half was really the anomaly. We will always see some fluctuations from revenue mix across our segments and across our different products. So I think the right ballpark really for gross margin is just north of 70, somewhere between 70, 71 probably is about the right spot. And I will just point out that because I know your first question was around pricing. So before I hand over to Dev, I think there's a link there with gross margin, actually. We've had quite a lot of questions over the last few years on pricing. I think just look at actually the gross margin. The gross margin has held up well, which shows that we are doing what we need to do on pricing.
Maybe we need to do a better job in explaining what we've done, but actually, the financials have held up well.
Yeah. And then just on Go, if I work backwards, so yes, we are seeing more demand for low-code, no-code. But beyond just the tech, I think it's what it delivers. So the fact that we can enable things more quickly for customers, they can grow with us as we deploy new innovation. People can take it up without necessarily needing to recontract. If you think about the bit around being easier to do business with, you sign up for Go and you have the access to the full suite of GBG solutions, which is why I covered that we've taken a bit of a breath to broaden the range of it so that it can be even more effective in the long term.
Then on competitive landscapes, a really interesting question, actually. So if you think about your question around price versus functionality, I think we need to be clearer around telling you about our target segments. For people who just want a really quick age verification for GBP 0.00001, we are not for them. David uses an analogy of we don't all drive the same car. So different people need different things. And we are being clearer now around where our target market is, something we'll come back to when we probably update you next around some of what those personas look like and driving success with them.
Good. I think just two more questions. Hopefully, everyone's got time to stay with us a bit longer. James will come to you next.
Good morning. James Goodman with Barclays. Three questions, please. So apologies, David. You may have asked this one.
First one would be, what is your approach to appropriately monetize the differentiation you have in identity via pricing? The second would be, what are some examples of the execution issues you're addressing in the Americas and what were the sources of these? And then lastly, on performance culture, what initiatives have you embedded here? Thanks.
Shall I go first?
Yep.
So James, your question, appropriate pricing in identity, is that? Well, I suppose as in part of the strategy is about differentiation. And you're saying that you have differentiation. So I guess, what are you giving your sales force? What processes did you have to make sure you're able to drive the appropriate pricing for the business? I think the first thing I'll say, coming back to the comment Dev just made around the competitive positioning, all identity solutions are not the same and all prices are not the same.
So I think that's the place you should start from. I think it's also fair to say that over the last 12 months or so, and there's a few people in the room that are very involved in this initiative, we've been really focused on actually what more we can do. I would say advanced-level pricing initiatives. And that's something that we will continue to push. I feel there's a lot more we can do in that in terms of how we price, how we bundle. You've seen our increase in things like subscription revenue. I think there's a lot more to go after for us there. But those sorts of things take time to embed. And clearly, with 20,000 customers, there's quite a large pitch to cover. But I think, yeah, you should definitely think of that as an opportunity for us over the next few years.
I echo that. So I think it's absolutely something we're on. We're building a team at the moment around strategic pricing and how we differentiate, especially where we have significant advantage. So it's something we're early on in the trial of. On the Americas, so I think to kind of distill it to a couple, I would say leadership visibility. So I think the team felt disconnected to the global HQ. I think we've addressed that very quickly. I think secondly, we talked about talent in the go-to-market team, not just the talent, but the size of the team. We've addressed that. We've made an investment into broadening the account management and new business side of the house. And we've also supported that with some of our experts from EMEA sharing best practice around gaming, for example, or international data.
Then thirdly, I would say we took our eye off a little bit of the competitive landscape. I think we've really dialed up our differentiators again, and we're seeing some good momentum. Those are not just differentiators we have in America. They're differentiators of our global business. So when we talk about gaming, yes, work with GBG because we work with everybody in EMEA and Australia. We have something to tell you about that market. Whereas previously, we would have said in America, we serve America. So that's been a real area of focus. Then your third question around performance culture initiatives. So I talked a bit about how we've implemented a leadership program designed around high performance, something that I've personally been through in the past in my career that's really accelerated my development. We've put 15 of our best and brightest onto that.
And I said in my presentation, we're seeing a real shift in mindset and a change in language. Next week, I'm in Montenegro with 60 of our best people from around the world who were either sales qualifiers or non-sales nominated by their colleagues. And that's driving momentum. That's something we used to do pre-COVID. It was probably the first thing I put back in place. Prior to COVID, we would have done it with about 20. We're taking 60 away now. Obviously, we're a larger business. And then just finally, just looking at kind of spot incentives and performance incentives for teams to go beyond what's expected. So giving back when they're giving us good reason to be positive.
Thanks.
I think I'll just come in on that point as well, James.
I think if you get on opportunities to hang around for a coffee afterwards, there are some of the team members. Hopefully, you'll hear from them. It feels a bit different. Clearly, you have to get the timing right of these things. Clearly, it's been great that quarter four saw an improvement in our trajectory. It's been the right time for us to be able to push ahead with some of these things. So I think the team will all echo that, hopefully. Good. Last but certainly not least, Julian.
Cheers. Only two from me. Location and identity. Firstly, location, 7% growth for a couple of years, pretty good performance. As we look ahead to next, shouldn't we see that accelerate? You're talking about volumes being weaker this past couple of years because of the macro. Surely that should improve.
Or conversely, do we see it not reaching those levels because you've done the price rises, you've had the low-hanging fruit in the new areas, volumes remain weak, so actually we get a below-trend performance? Just interested in your thoughts on that on location headline. And second one, identity. You speak to in the presentation rapidly changing market needs. We've heard from the tech positioning you're doing to respond to that. Could you just talk a little bit more about the routes to market? You've mentioned account management. And it'd just be interesting to hear a little bit more about how you're sort of really banging down on the routes to market to increase the revenue capture. Thanks.
I'll take the first one. So yeah, you're absolutely right. Location's had a really strong three years, particularly when you consider the macro environment it's been operating in.
We're not baking in an improvement in macro circumstances for location in this current year. There are still sectors that our location team work in that are feeling a bit subdued. And we're not baking in any improvement into those into this year. So the growth for this year will be somewhat similar to the year just finished, we think, made up of pretty much the same initiatives that we had last year. So continuing to diversify into new market segments where the team have had some really good success.
Could you just talk to price rises on that? How much have price rises helped location? And is that sustainable or is that a feature?
You might remember that 18 months ago, we talked about a bit more of a meaningful price increase put through by the team in location, which the team navigated really well, actually.
We're probably more back to business as usual in terms of price increases now. So nothing significant, meaningful like we did then, but still continuing to push prices up in line with inflation where we're able to.
Great. Thanks on that.
And then on identity, to close us out, so I think current focus on our route to market is doing better with what we have. So we do have an enviable customer base. And we've spoken about how we're rebuilding the direct team in Americas, for example. But as our focus moves away from that and we're monitoring the results, we are now looking at the channel. And I do think there is an opportunity for us to do better around strategic channel partnerships, some of the bigger players in the industry and how we make a more meaningful relationship with them. We will need to resource that.
So it's one of the investment opportunities that we'll be debating as a team. But that is something we are definitely looking at and I think something that could add to our growth.
Great. Thank you. Thank you.
Good. I think that concludes the questions for today. Thank you very much for joining us. Just to reiterate the final messages, it was a year just closed that we were very pleased with the outcome. We feel it was a plan that we executed as we intended. And we're excited, as you've heard from Dev and I today, we're excited about the opportunity ahead of us. Thank you very much for joining us. Thank you.