CPP Group saw its share price cut in half today after the company revealed it is in discussions with the Financial Services Authority (FSA), the UK’s financial regulator, over the sale of two of its products.
In London, the company’s shares closed down 46.43 per cent at 150p ($2.40).
The FSA is investigating ‘issues surrounding the sale of the group’s card protection and identity protection products,’ the company announced in a statement to the London Stock Exchange.
As a result of the investigation, CPP said it had decided to suspend all sales of its identity protection products with immediate effect.
The company also issued a profits warning, saying underlying profits are expected to be below the lower end of analysts’ current estimates for 2011.
Speaking on a hastily arranged conference call with investors and analysts this morning, CPP chief executive Eric Woolley said the company had been obliged to make an announcement to the stock exchange once it had sent a formal response to the FSA regarding the investigation.
‘We take our obligations seriously and we also contest a number of the FSA’s observations, so this dialogue continues,’ added Woolley.
CPP’s core business areas include card protection, identity protection and mobile phone insurance. The York, UK-based company employs more than 2,300 people around the world.