Savings and voucher group reports better first half results

Appreciate Group CEO Ian O'Doherty

Appreciate Group, which rebranded from its former name Park Group earlier this month, announced improved interim results today.

In the six months to September 30, the gift voucher and Christmas hampers business saw revenues rise by 21.3% to £33.2m, while the pre-tax loss reduced from £1.5m last year to £1.3m this year.

Because of the nature of the business its results are heavily weighted to the second half of its financial year.

The results were achieved despite the business warning in June that its profits will be suppressed this year due to the costs incurred with its strategic business plan, including its HQ relocation and additional technology and marketing investment.

In September the group relocated 248 staff over the River Mersey from its former Birkenhead HQ to Liverpool’s 20 Chapel Street office block in one of the city centre’s biggest property moves of the year.

Its gift cards distribution and hamper operations remain at the Valley Road site in the Wirral.

Today’s results also showed a 10.3% increase in billings, related to voucher and prepaid gift cards, to £120.2m.

Seasonal operating losses were reduced to £2m compared with a £2.3m loss in the first half of 2018.

Cash balances, including cash held in trust, at September 30, stood at £211.8m, down slightly from £212.4m a year ago.

The board is proposing to maintain the interim dividend of 1.05p per share.

During the six month period the group developed a Mastercard gifting product with digital fulfilment and mobile wallet capability that is being tested through its highstreetvouchers.com channel. This is in line with Appreciate’s ambitions to be a more hi-tech and digitally-focused business, reflected in its change of name.

It also began trialing a new consumer digital gifting product, Giftli, which appeals to a new millennial audience, ahead of a planned soft launch before this Christmas.

Concerning current trading, the group said its outlook for the second half, and the year as a whole, is unchanged.

Current year cost estimate of the implementation of its strategic business plan are unchanged at £2m, and it says it has good momentum in terms of implementing the remaining milestones of the strategic business plan.

Chief executive Ian O’Doherty said: “Appreciate Group performed well in the first half, consistent with our expectations for the year as a whole, with strong operational performances in both consumer and corporate divisions.

“This was an extremely busy period for the group as we continued to implement our strategic business plan whilst optimising the performance of the business.

“We continue to be encouraged by the significant progress we have made on delivery of our strategic business plan, including the development of new consumer products, and are optimistic about the benefits this will realise in a growing market.”

Today’s figures showed good growth in Appreciate’s corporate arm, with strong growth in billings of 9.3% to £80.1m, while revenues rose 23.8% to £24.3m, benefiting from increased demand and the addition of new clients.

Its consumer billings grew by 12.5% to £40.1m, benefiting from significantly increased customer numbers through highstreetvouchers.com. Revenues increased by 14.9% to £8.9m.

Christmas Savings benefited from earlier despatches than in the prior year.

The group also added new redemption partners – high street and online retailers, hospitality and leisure providers – for its gift cards and vouchers operations, focusing on brands that are more relevant to its current customer base and future target audience, with greater online presence.

Click here to sign up to receive our new South West business news...
Close