Rewards group reports strong trading, and starts search for new chair

Appreciate Group, the Liverpool-based gift and reward vouchers specialist, said it was witnessing a return to pre-pandemic levels with strong trading in the current financial year.

In a trading update ahead of its annual general meeting today, chairman Laura Carstensen commented on conditions so far for the year starting on April 1, 2021.

She said second quarter trading is ahead of both 2020 and 2021 for the year to date.

Corporate and gifting billings are 14.6% ahead of levels seen in 2020 – the last normal trading year before the pandemic – with year to date, April 1, 2021 until September 17, 2021, billings now up 3.6%, which she said was a considerable improvement on the first quarter, which was six per cent lower than the same period in 2020.

The performance is also significantly better than the same period in 2021, which was severely impacted by the first lockdown.

Corporate and gifting billings for the year to date are up 28.1% on the comparable period in 2021. Billings of £40.7m for quarter two are broadly similar to the same period in 2021, which benefitted from involvement in the free school meals initiative.

This improvement has been driven by a strong second quarter performance from the corporate business, which is currently 6.8% up year to date against 2020 with billings of £68.3m, compared with £63.9m in 2020.

Gifting billings continue to narrow the gap to 2020 levels, she said. “They currently stand at £11.5m (FY20: £13.0m), down 12.1% on the comparable period in FY20. The group has strengthened its approach to digital marketing and continues to focus on initiatives to drive business, which has resulted in visits to Highstreetvouchers.com increasing by 36.4% on the prior year.”

She added that, as was expected, there has been a significant improvement in redemptions as restrictions have eased and in person consumer activity has increased. Overall redemptions are up 70.6% on the prior year, with paper voucher redemptions 89.2% higher as the group sees the anticipated deferred revenue come through.

Following the announcement of the new partnership on May 27, 2021 to offer the group’s gifting products to consumers via PayPoint’s network of 28,000 outlets, Appreciate continues to work with them to build awareness and availability of its products with its retailers, as well as their customers.

Ms Carsten said: “The partnership is an exciting opportunity over the medium term, although it remains at an early stage, and we are exploring ways to enhance the services we offer through the PayPoint network.”

Since 2018, the group has been implementing a strategy which was focused on building a more robust and scalable platform from which to drive growth. Significant progress has been made through investments in technology and digital enablement, together with simplification and repositioning of the organisation, the benefits of which are beginning to come through, it said.

Having enjoyed a strong third quarter peak trading in 2021, including its best ever December – boosted by corporate clients choosing to reward staff over traditional Christmas parties – Appreciate said it is focused on driving another strong performance in this key period for the current financial year.

It said it is building a detailed marketing campaign for Christmas savers to secure optimal account acquisition and retention for 2022.

Ms Carsten said: “As the UK economy and consumer confidence shows signs of returning towards pre-pandemic levels, we are pleased to see the anticipated improvement in performance during Q2, giving us momentum as we enter our main seasonal trading period.

“Following the changes we have made to invest in and reposition our corporate business, we are now seeing positive trends and this gives us confidence for the year ahead.

“We are nearing the final stage in our transformation. We have now invested in a more robust and scalable platform and our focus is on leveraging this to deliver on our growth opportunities, at a time when the economy appears to have moved up a gear but with distance to go to restore pre-COVID momentum and prospects. We believe we are positioned to benefit from any upward economic trajectory.”

She also announced that she has informed the board of her intention to step down as chairman as part of the board’s succession plan.

The board will soon commence a search process to appoint a successor and enable an orderly handover.

Ms Carstensen will continue to serve as chairman until the process is completed. She has been with the company for almost eight years, having been appointed to the board as a non-executive director on September 23, 2013, before becoming non-executive chairman on June 3, 2016.

She said: “I am extremely proud to have served Appreciate Group as chairman for the last five years. The management team has transformed the business, building a more robust and scalable platform which provides a strong foundation for growth.”

Chief executive, Ian O’Doherty, said: “I’d like to thank Laura for the energy and passion she has brought to the role as chairman, as she has steered the group both during its recent significant transformation and through the unprecedented challenges brought by the pandemic.”