TIDMAPP
RNS Number : 3117L
Appreciate Group PLC
12 January 2021
12 January 2021
Appreciate Group plc
Q3 and Christmas trading update
Strong performance through Q3 peak trading period as momentum
continues in digital
Appreciate Group plc (the 'Group'), the UK's leading
multi-retailer redemption product provider to corporate and
consumer markets, today provides an update on its important Q3
trading period for the three months ended 31 December 2020 in the
current financial year.
-- Underlying Q3 billings(1) were up by 13.1 per cent to GBP96.3m (Q3 2019: GBP85.1m).
o This included a 42 per cent increase in December to GBP45.5m
(Q3 2019 GBP32.1m) - our best ever month.
o And continued positive momentum in digital sales, with an
almost four-fold total rise over the period to GBP22.5m (Q3 2019:
GBP5.9m), reflecting the acceleration of online retail.
-- Corporate:
o A strong performance, with billings up 12 per cent in Q3 2020,
including a 42 per cent rise in December driven by clients
rewarding employees; and record levels of business from new
clients.
-- Consumer:
o Billings via Highstreetvouchers.com were up 36 per cent versus
Q3 2019, including a 38 per cent rise in December.
-- The Group is expected to deliver a full year performance for
the year ending 31 March 2021 at least in line with the mid-range
scenario as set out in its 2020 annual report and accounts,
although the latest lockdown measures may delay some revenue and
profit until customers have more options to redeem their
products.
-- Free cash as at 31 December 2020 stood at GBP33.5m (30 September 2020: GBP24.9m).
Billings YTD up October November December Q3 overall YTD to
Corporate and to 30 September 31 December
HSV only
2020 GBP57.9m GBP24.0m GBP26.8m GBP45.5m GBP96.3m GBP154.2m
----------------- --------- --------- --------- ----------- -------------
2019 GBP81.2m GBP26.4m GBP26.6m GBP32.1m GBP85.1m GBP166.3m
----------------- --------- --------- --------- ----------- -------------
% diff -40.2% -9.3% +0.9% +41.7% +13.1% -7.3%
----------------- --------- --------- --------- ----------- -------------
Figures exclude Free School Meals initiative
-- Billings YTD with the Free School Meals initiative included
are GBP166.0m, broadly in line with the same period last year
(2019: GBP166.3m).
(1) Underlying billings include Corporate and
Highstreetvouchers.com only. Christmas savings are excluded as
order book largely completes by April. In the 2020/21 Half Year
Results on 24 November 2020 we reported that this order book
completed 8 per cent lower than 2019/20.
Ian O'Doherty, Chief Executive Officer, at Appreciate Group plc,
commented:
"I'm delighted to report that the Group has delivered a strong
performance during its important Q3 peak trading period. As a
seasonal business, the Group's performance has reflected the swing
to profitability that we typically see in the second half of the
financial year and the acceleration of our strategy to strengthen
our digital capability has ensured a Q3 performance well ahead of
last year.
"We saw our busiest ever month in December. Our Corporate
performance has been enhanced by companies seeking ways to reward
their hard-working employees as an alternative to traditional
Christmas parties.
"The accelerated implementation of our strategy over the last
year has helped us deliver an improved performance through this key
period, and has strengthened the Group's proposition for consumers
and corporates, leaving it well positioned for sustainable growth
beyond the current financial year."
Growth in digital
A stronger focus on digital products through promotion of
Love2shop e-codes and launch of the Love2shop Contactless Digital
Gift Card, combined with improvements in our digital marketing
capability, have helped us substantially increase digital sales by
282 per cent, from GBP5.9m to GBP22.5m in Q3 2020. Enhancements to
digital marketing saw us achieve a greater share of search demand
volume in our core gift card category in November and December. At
the same time, we have seen a fall in paper as a share of the
product mix, down from 36 per cent to 16 per cent year on year. An
element of this will have been driven by the lockdowns and
acceleration toward online retail this year.
Further business simplification
During December, the Group made further progress with its
strategy to simplify the Group, with the completion of the sale of
our brand engagement subsidiary, FMI, and the wind-down of the
contract packing and Republic of Ireland businesses. This means
management can now fully focus on driving the core business.
Improved system performance and resilience
The Group's performance in Q3 2020 was enabled by recent
improvements to its core systems, following some stress encountered
in the comparative period last year. As a result of the
improvements made, the systems remained resilient despite
significantly increased customer traffic to our websites. Between 1
September 2020 and 31 December 2020 visits to
Highstreetvouchers.com were up by more than a fifth, and
Love2shop.co.uk saw visits increase by over a third versus the same
period last year. Outages were down to zero from 14 in 2019 and CPU
usage fell from over 90 per cent in 2019 to consistently below 40
per cent for 2020.
Further improvements are planned during 2021 through the
implementation of the new Enterprise Resource Planning system that
will provide a more robust and scalable system on which to grow our
business in the future.
Looking ahead with confidence
We had indicated our confidence in the Group's second half
performance in November when the decision was taken to reinstate
the dividend and repay all funds utilised from the Coronavirus Job
Retention Scheme, which were subsequently repaid in December.
This strong Q3 performance has underlined that confidence and
means that we now expect the Group to deliver a full-year
performance at least in line with the Board's expectations.
Although we expect the latest national lockdown to impact
redemptions due to the closure of non-essential outlets, the
business is now more resilient to these restrictions than when
measures were first introduced back in March 2020 and our strong
increase in billings provides an encouraging indicator of future
performance.
The continued investment in the Group's transformation and
products, and the delivery of our strategy in smarter, more
efficient ways of working will help us drive sustainable growth
beyond the current financial year.
For further information please contact:
For further information please visit
https://www.appreciategroup.co.uk or contact:
Appreciate Group plc Liberum MHP Communications
(NOMAD and broker)
Andy Hammerton, Head Richard Crawley Reg Hoare / Katie
of Corporate Affairs Jamie Richards Hunt / Charles Hirst
Ian O'Doherty, CEO
Tim Clancy, CFO
Tel: 0151 653 1700 Tel: 020 3100 2222 Tel: 020 3128 8193
Email: appreciategroup@mhpc.com
The information contained within this announcement is deemed by
Appreciate Group to constitute inside information as stipulated
under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Notes to Editors:
Appreciate Group is one of the UK's leading gifting, pre-payment
and engagement companies, and experts at creating joyful
experiences and connecting people to the things in life they enjoy
the most.
Everything Appreciate Group does is focused on creating more joy
in the world, and it is proud to be trusted to help its customers
create moments they can treasure and remember, whether they are
giving, celebrating or rewarding.
Appreciate Group is a financial services business with a wide
portfolio of brands which provide solutions for its consumer and
business customers. Its consumer-facing brands meet a range of
prepayment and gifting needs, while its business products help
corporate customers reward and recognise their employees and
clients.
Appreciate Group is home to many of the country's most-loved
gifting, pre-payment and engagement solutions including Park
Christmas Savings, Highstreetvouchers.com and Love2shop, and we are
fast-becoming the home of digital innovation in gifting.
Whether it's saving towards the perfect family Christmas or
celebrating with gift cards and vouchers, we create and supply
products that millions of people trust when it comes to giving and
receiving with family, friends or colleagues.
Park Christmas Savings: As the UK's largest family Christmas
savings club, Park Christmas Savings has helped over 2.7 million
families budget for Christmas on a short-term or year-round
basis.
Love2shop: Love2shop offers gift cards and gift vouchers
available to spend at stores and attractions across the UK. They
are also used through our Love2shop Business Services providing
corporate partners with incentives and rewards for their employees
and clients.
Love2shop Contactless Gift Card: The UK's first fully digital
multi-retailer gift card, available to spend online or in-store
through your mobile wallet.
Appreciate Group plc's shares are traded on AIM, a market
operated by the London Stock Exchange.
The Park Prepayments Protection Trust is designed to increase
protection for customers' prepayments. The Trust has three
directors, two of whom are independent of Appreciate. Details of
the trust are set out here:
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END
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