Park bullish despite higher loss

PARK Group, the Christmas savings and pre-paid corporate gift card provider, announced higher first half losses but was bullish on prospects as it raised its dividend 5%.

The Birkenhead-based group, which due to its highly seasonal nature, traditionally makes a loss at this stage in the year, said revenues were down by nearly £5m to £46m in the six months to the end of September.

Managing director Chris Houghton told TheBusinessDesk.com this was not a cause for concern, and was down to timing differences on the dispatch of orders and changes to the way revenue from prepaid cards is recognised.

“Overall I believe progress has been excellent. Christmas savings for 2011 are up 5% – which shows that our products are striking the right note with consumers – and people are already beginning to save with us for Christmas 2012.”

Operating losses in the period, reflecting higher advertising costs and the first seasonal impact of group’s Irish business were £5.2m, up from £4.5m a year ago.

At the bottom line, losses were £4.4m compared with a £541,000 profit last year – which related to a one-off tax rebate. Park raised its interim dividend raised 5% to 0.525p per share.

Mr Houghton said the group had invested in new channels to interact with consumers, and has digital marketing teams running Twitter, Facebook and Linked-In accounts.

“It’s important for us to move with consumers’ habits and this is working well for us at the moment.”

Commenting on the results and outlook for the full year, Peter Johnson, founder and chairman, added: “The second half of the year has started well in the corporate and consumer businesses with orders running ahead of the same time last year.

“There is no doubt that the prepaid card and our application of online technologies is transforming Park and offers exciting growth opportunities in both existing and new market areas.

“The outlook for Park is encouraging; the dividend increase reflects this confidence. Park is in a strong position and we anticipate another year of growth.”

Park said its pre-paid gift card product, ‘flexecash’  was proving to be successful. Launched last year it has more than 500 corporate customers. Since last summer Park has issued more than 550,000 cards with a total value of over £60m.