APP.L Regulatory News (APP)

PARK GROUP PLC

('Park' or the 'Group' or the 'Company')

9 June 2015

Preliminary Results for the Year Ended 31 March 2015

Summary

Park Group plc is the UK's leading multi-redemption voucher and prepaid card business focussed on the corporate and consumer markets. Sales are generated through our direct sales force, e-commerce and agents.

Chris Houghton, Chief Executive Officer, commented: 'Park delivered an excellent result for the year under review with strong profit and revenue growth across the organisation and continued investment in systems, backed by healthy cash flows and a balance sheet free of bank borrowing. Trading momentum is continuing in the current year, which has started strongly. We look forward with confidence and anticipate another period of sustained growth.'

Chairman's Statement

I am delighted to report that Park Group has maintained the momentum of its strong first half and delivered an excellent set of results for the year ended 31 March 2015. This impressive performance reflects the sustained improvement in market conditions and our ability to capitalise on growth opportunities through the launch of new products and further advances in customer service.

Park's growth strategy has remained consistent and is delivering reliable and growing returns for investors. The Group's principal areas of operation continue to be the consumer savings and corporate reward and incentive markets, but the manner in which these markets are served by Park has changed beyond recognition over the past decade, driven by Park's investment in and ongoing development of information technology (IT), the internet and 'smart' device channels. We have utilised these technologies to drive new product development, marketing innovation and customer service. Our strategy has been implemented patiently and consistently, however the cumulative impact over the years has been transformational.

Financial performance

Group profit before taxation for the year to 31 March 2015 increased by 16.3 per cent to £10.9m (2014 - £9.4m) and operating profit rose to £9.7m (2014 - £7.8m). Finance income was lower than the previous year at £1.2m (2014 - £1.6m) on higher average cash balances, but with lower average returns in the year. Interest rates in the money markets remain low and Park's return on its cash is largely dependent on these rates. While enhanced returns may be available from investment in higher risk products and instruments, this would be incompatible with the Company's cautious and low risk approach to cash management, which focuses on consumer protection.

Customer billings advanced by 11.0 per cent to £372.9m (2014 - £336.0m) while revenue increased to £293.3m (2014 - £269.6m). Customer billings, as we have highlighted in previous reports, is a more appropriate measure of performance than revenue. It is linked to the introduction in June 2010 of flexecash®, Park's proprietary payment system, and the associated change in the way in which the Group is required to report revenue earned from its prepaid card offering.

Dividend

In the interim statement, issued in December 2014, we announced our intention to adjust the balance between the interim and final dividend so that the interim payment is closer to one third of the total dividend for the year. As a result of the strong trading performance and the Company's significant and growing cash resources, the board is recommending the payment of a final dividend for the year of 1.60p per share, making a total dividend for the year of 2.40p per share (2014 - 2.30p). This is equivalent to an increase of 4.3 per cent. Shareholder approval will be sought at the annual general meeting (AGM) to be held on 24 September 2015 to pay the final dividend on 1 October 2015 to shareholders on the register on 28 August 2015.

Operating performance

Park's businesses service both the consumer and corporate markets, sectors where demand has been affected by the tough economic environment of recent years. While it is commendable that our businesses have been successful in adjusting to this scenario and growing sales and profits, the challenging market conditions certainly dampened the advance in the trading performance. The recovery in the UK economy, which started to become evident in 2013, is now established and reflected in our current trading performance. Park's performance has been resilient because of the manner in which the business has utilised skills and ingenuity across the Group to better understand and service its customers' needs. Park increased investment in advanced systems and internet technology specifically to raise service levels and develop new products to further enhance the customer experience. The combination of these factors has placed Park in a sound, confident position in the various markets in which it operates.

The corporate business made further good progress, supplying an extensive range of gift cards, vouchers and e-codes for online use. Billings advanced strongly as new opportunities were successfully secured, more than offsetting continued lower demand from the credit sector. The corporate business has secured new business from many smaller customers so that the overall operation is more resilient than before being less dependent on a small number of large customers.

The consumer business, which offers customers a reliable, effective and convenient way to build savings for the festive season over a 45 week period, showed significant improvement. The order book increased by 8.4 per cent compared with the previous year. More than 90 per cent of orders are booked each year by the end of February, providing a clear view of the likely outturn for the next fiscal year. The marketing campaign for Christmas 2015 ended some months ago and was well received, with orders showing a similar level of increase year-on-year.

Strategy

Park has a robust and successful strategy, which has built stable foundations for the business and enabled it to deliver a strong financial performance. Today, the Company is a significant e-commerce and financial services business, which utilises the power of the internet and the latest advances in communications technologies and 'smart' platforms, to offer customers a wide and exciting range of incentive, reward and Christmas savings products. This is underpinned by Park's continued commitment to investment and excellent customer service.

We will consider acquisition opportunities as they arise, provided they meet our market, financial and strategic objectives. We continue to cautiously assess opportunities for expanding our European business into new territories.

Employees

While our business performance is driven by technology, people remain our principal asset. On behalf of the directors and shareholders, I would like to thank all our employees for their unceasing commitment and enthusiasm during a year of considerable further progress for Park.

Current trading and outlook

The trading momentum of the year under review has been maintained into the current year, which has started well. Orders for our savings business are well ahead of the same stage last year and the corporate operation is continuing to make excellent progress. The outlook for Park is very encouraging. We are well placed to deliver further organic growth, enhance our financial performance and achieve a result in line with the expectations of our stakeholders.

Peter Johnson

Non-executive Chairman

9 June 2015

Chief Executive's Review

Park has delivered an excellent result for the year under review with strong profit and revenue growth across the organisation and continued investment in systems, backed by healthy cash flows and a balance sheet free of bank borrowing. The Company has a large and growing customer base, serving both the consumer and corporate sectors with innovative solutions to match their needs and expectations.

The business environment in the UK improved steadily during the year and this, linked with the associated rise in consumer confidence, has been a continuing positive influence on Park's operations. The Company has adhered to its stated strategy during recent years, performing solidly despite economic conditions and is now in an encouraging position to capitalise on the improving marketplace.

The results for the year ended 31 March 2015, reflect the robustness of our business model and the successful implementation of our consistent strategy, which has four key aims:

· to enhance our retailer proposition;

· to grow our multichannel offering;

· to expand the customer base; and,

· to develop and exploit our infrastructure.

During the year, further good progress was made in delivering against each of these strategic strands. We continue to be disciplined in our adherence to these ideals, as we believe they are important to the growth of our organisation, offering the Group an inherent flexibility which allows us to manage a wide range of changing market conditions.

Our business model has evolved progressively over the years alongside the strategy, and this combination has successfully transformed Park into a Company which today is unrecognisable from what it was just a decade ago. The advances have been in measured, patient steps and will continue to ensure that we progressively build and develop the business from a sound base. Such transformation has required major investment in product development and a dramatic improvement in our IT and internet capabilities. While Park has been transformed, it has consistently focused on its core historic values of providing customers with excellent value products and services, backed by first class customer relations.

The cash position is very strong, delivering the necessary resource to drive growth and provide working capital. Total cash balances ended the year at £89m (2014 - £73m).

Park's emphasis on customer service and improving efficiencies is leading to the progressive elimination of manual procedures within the Company through investment in sophisticated, customised IT systems and infrastructure. Annual capital expenditure on IT runs at approximately £700,000 with a total spend, including technical support, in the region of £3.6m. This is a significant investment and commitment for a business the size of Park. In 2014, the Company had its ISO27001 accreditation renewed; meaning that the Group has met the international standard describing best practice for an information security management system.

During the year our data centres were refurbished and upgraded with the installation of new flooring and enhanced air conditioning equipment. The fire suppression, flood protection and smoke detector systems were also replaced by those utilising the latest technology. This is part of a rolling improvement and investment programme to maintain state-of-the-art conditions for Park's technology systems, which now constitute the heart of our operations.

The development of new products is an ongoing process at Park. The successful introduction of the flexecash® prepaid card in 2010 represented a step change for the business and moved it into areas which previously had not been accessible. Since launch, flexecash® cards have had over £320m of value loaded with 65 (2014 - 62) brands accepting the card. The card is available alongside the Love2shop voucher, which is supported by 144 (2014 - 132) brands. In Ireland, 43 (2014 - 41) brands accept the voucher and 15 (2014 - 12) brands accept the flexecash® card. The card and voucher are complementary with relatively little substitution.

Park has also capitalised on its position as a leading prepaid card provider through the development and introduction of many new products. The recent launch of its 'Anywhere' and 'Online' cards is a significant development. The 'Anywhere' card is a MasterCard which allows users to make purchases from any retailer that accepts MasterCard, not just a retailer linked to the Love2shop brand. The customer pays a small premium for a preloaded 'Anywhere' card but, as the name suggests, it comes with the freedom to spend the embedded value at any outlet that accepts MasterCard. The 'Online' card is sold at face value and can be spent online with a wide range of retailers. Customers appreciate the freedom and flexibility these products offer and sales are growing. In addition, the 'Anywhere' card represents an important development and further related products are being developed. These new cards are already having a significant impact and broadening Park's offering to its savings customers.

The programme to refresh or redesign Company websites continues. One of the results of this work has led to online traffic moving onto the redesigned Love2shop site. The principal benefit of consolidating more users onto one site is to allow greater opportunity for cross-selling between different applications. Love2shop is a strategic e-commerce and card management website. It sells products plus peripherals including e-wallets, e-codes and card top-ups.

The process of topping-up a Park Card with additional funds previously involved some form of human interaction but now, as part of the Company's focus on customer service and efficiency, it is possible for self-service customers to top up their cards via new automated processes. These advances bring significant benefits for customers as the processing and credit checking procedures are fully automated and secure.

The dominant use of the internet as a form of communication means that in the year under review 86 per cent (2014 - 81 per cent) of new orders from first time customers were placed electronically. Automating manual processes also brings greater flexibility for customers as they can initiate actions at times and locations which suit them.

An increasing number of savings customers use direct debits to renew their programme each year. This feature is not only convenient and useful for the customer, but it also has considerable benefits to Park as memberships automatically renew, thus saving administration costs and ensuring that customers do not miss the opportunity to commence a new savings programme.

Social media is a useful communication device for customers and also provides Park with important insight into its customers' views and opinions. Park has some 72,000 (2014 - 60,000) 'likes' on its Facebook Christmas savings page and this provides valuable and instant market research. If issues are being discussed on Facebook, Park can respond rapidly to advise, comment on, or rectify any situation and in many cases, customers can answer the queries of other users, reducing the need for our direct involvement. Facebook is Park's most important social media outlet and provides an effective way of engaging with this growing audience.

In October 2010 Park expanded into the Eurozone following the purchase of an Irish business. This was an exciting development as it allowed the Company to build its product offering in a new territory and also saw the creation of Park products denominated in Euros. Progress to date is encouraging, with agreements reached with 50 retailers in nine countries and billings growing steadily.

Corporate 

The corporate business supplies a range of products, principally to the incentive and reward markets, where they are used to motivate employees and recognise achievement. Independent research by the UK Gift Card & Voucher Association estimates that the gift voucher, gift card and stored value solutions market is worth close to £5bn, having grown by approximately eight per cent during 2014.

The number of Park's corporate customers by the year end had reached a record 7,509 (2014 - 6,798), this reflects not only growth in the marketplace but also our success in expanding share of this exciting market. The corporate business directs its sales teams and specialists to work alongside customers to develop branded schemes tailored to meet the individual requirements of end users. This 'personalised service' is one of the strengths of Park's operation and demonstrates the knowledge and experience of the sales teams, drawing on years of know-how to ensure that each customer is offered the application that best matches its needs. Customer retention during the year improved to 84 per cent (2014 - 83 per cent). This is encouraging as a proportion of customers in this space operate 'one off' schemes.

The business has maintained the strong progress of the first half and achieved an excellent result. Billings grew by 14.0 per cent to £176.1m (2014 restated - £154.5m) and operating profit rose by 32.6 per cent to £6.5m (2014 restated - £4.9m). Sales to a major customer in the credit sector have declined significantly over the past two years and it is a sign of the underlying strength of our business that, if the credit sector was excluded from these results, billings would have risen by 22 per cent compared with the previous year.

A feature of the year has been the high level of interest from corporate customers seeking to introduce new, or continue with existing, incentive and reward plans. These plans can take many different forms and are customised to match the requirement of each customer so as to optimise the benefit to its staff. The Love2shop voucher is used in many schemes and delivered an increase in revenue of 13.5 per cent compared with the previous year. Billings for the flexecash® prepaid card, excluding the credit sector, were also very strong, rising by 32 per cent.

An increasing number of businesses are using flexecash® as a way to reward and incentivise their clients, employees or customers. Its ease of use, coupled with its acceptability at thousands of retail outlets, makes it the ideal gift or reward card product. The number of retailers accepting the card continues to rise, and new retailers are being added to improve choice.

The Everyday Benefits card, which is an employee voluntary benefit product, has achieved further strong sales attracting many new corporate users. Staff receive the card as part of each Company's incentive and reward schemes with appropriate value already loaded. The card is being used by a major retailer to reward its 50,000 staff in the UK for exceptional performance. A further attractive feature of the Everyday Benefits scheme is that employees can then top-up the card themselves, by loading funds onto it at a discounted rate. This part reward/part benefit card is, we believe, unique in the UK.

Love2shop Holidays (formerly Park Travel) provides another avenue of redemption for the Love2shop brand; the operation has continued to grow this year with bookings and revenue increasing 16 per cent. We have won a number of travel incentive schemes in the building sector, which are using holidays as the principal reward.

In the interim results we noted that the results of the online operation, hightstreetvouchers.com, are now included with those of the corporate business as the majority of billings generated from that site related to corporate customers. The online business is one of the most important and fastest developing components of Park. It has been growing rapidly for a number of years and in the year under review billings increased by a further 28 per cent to reach £21.5m (2014 - £16.9m). This dynamic progress demonstrates customers' preference for the flexibility offered by self-serve web sites, where users can interact with the Company at any time of the day or night to place or manage any aspect of their order, including delivery arrangements. hightstreetvouchers.com ended the year with 200,000 orders and the site received 3.5m visitors.

The site is also very popular with overseas customers wishing to purchase gifts for UK based friends and relatives. In the year, more than 20,000 orders, with a total value in excess of £1.2m, were placed from overseas with a significant proportion coming from customers in Australia, Germany and the USA.

A further example of new product development from our focus on applying technology has been the introduction of 'Engage', a new, completely digital platform for the corporate incentive and reward market. This modular platform allows corporate users to create entirely web and 'smart' device based programmes for their customers or staff. The system can also incorporate any existing schemes each business may already be running and provides real-time statistics and information to each business on the uptake and success of each scheme. 'Engage' was developed during the period under review and launched in April 2015.

Consumer

Park has built a large and loyal customer base over many years. The Christmas savings concept is particularly attractive to individuals, because it introduces control and discipline into a family's financial preparation for the festive season. It encourages saving by spreading payments over a 45 week period with products being delivered in the weeks running up to Christmas. Inevitably, the business was affected by the economic downturn but the resilience of the operation and the loyalty of its customers reduced the impact. The continuing improvement in consumer confidence and economic activity has been positively reflected in our trading performance for the period.

The business delivered an excellent result in the year under review. Billings rose 8.4 per cent to £196.8m (2014 restated - £181.5m) while operating profit increased by 10.9 per cent to £5.9m (2014 restated - £5.4m). The business experienced solid growth with the number of customers increasing by 2.9 per cent to 424,000 (2014 - 412,000) while the number of accounts grew by 14.0 per cent to 145,000 (2014 - 127,000). Average order size was also ahead of the same period last year, reaching £463 (2014 - £440).

The variety of consumer products available is extensive, ranging from prepaid cards to gifts and store vouchers to hampers. Park's Love2shop prepaid cards and vouchers can be spent at over 20,000 high street stores, restaurants and attractions, making it the UK's most popular multi-retailer gift product. Retailers joining Love2shop in the year included Beaverbrooks, Currys PC World, The Perfume Shop and Waterstones. We also offer cards and vouchers issued by leading retailers, including Amazon, Debenhams, Marks & Spencer and Sports Direct, which can be spent in their own outlets only. For those customers who prefer to buy direct from Park, our gift catalogue contains thousands of popular items, which make perfect Christmas gifts. Hampers, the original Park business launched in 1967, continue to be available but now represent only four per cent of total Park billings.

Product innovation is a key feature of the consumer business and enables it to keep pace with the changing needs and tastes of customers. The new 'Combi' offer is a particularly important development, which has generated significant and growing demand. Combi provides customers with two cards, a Love2shop card and one from either ASDA or Morrisons. This card combination enables Park's customers to have access to certain national retailers, which would otherwise not have been available. The response to Combi has been excellent and the scheme has been broadened for the current year with Primark and Sainsbury's joining. Discussions are in progress with other leading retailers, attracted by the opportunities offered by this exciting new product combination. The early Combi orders for Christmas 2015 show a large increase over the previous year, reflecting the appeal of this innovative approach.

Marketing is at the heart of the success of our consumer business with advertising for each Christmas campaign beginning during the previous year and is principally via television. The campaign usually commences in September and runs for six months to February. By the time the campaign finishes most customers will have commenced their 45 week savings scheme. This lengthy savings period gives Park clear visibility of how the year is developing, and also enables the Company to fine tune the campaign for the following Christmas.

Park's business in Ireland made further steady progress and it is encouraging that billings were five per cent ahead of the level of the previous year. The number of customer accounts also increased and the average spend per customer rose. After a detailed review, the product range has been rationalised to meet the particular requirements of this market. The Love2shop voucher is now redeemable at 43 major retailers and the prepaid card is accepted by 15. The Irish market is small in comparison to the UK but has provided a valuable introduction to the challenges inherent in launching in new geographical territories and currencies.

During the year we have continued to invest in product development, system functionality and IT hardware. This will help us to remain flexible and allows us to continue to offer appealing products and outstanding service to our expanding range of customers, whatever their circumstances or requirements.

We look forward to the coming year with confidence and anticipate another period of sustained growth.

Chris HoughtonChief Executive Officer9 June 2015

Financial Review

Profit from operations

The Group's operations are divided into two operating segments:

At the start of the year, our online business, highstreetvouchers.com was transferred from our consumer business to our corporate business as the majority of sales value generated from this online business related to corporate customers. Previously reported figures have been restated. Full details are given in note 9.

All other segments comprise central costs and property costs.

Billings have increased when compared to the prior year by 11.0 per cent to £372.9m, with revenue increasing on the same basis by 8.8 per cent to £293.3m. The increase in revenue is smaller than the increase in billings year on year, due to the higher proportion of billings arising from flexecash® cards. Revenue earned from the sale of flexecash® cards is recognised differently from all other customer billings, as explained below.

Revenue and margin from sales of Love2shop vouchers and flexecash® cards are generated from both operating segments.

Operating profit is detailed below:

Operating profit for the year ended 31 March 2015 has increased by £1.9m to £9.7m.

In the consumer business, customer billings have increased by 8.4 per cent to £196.8m. Revenue has also increased by 2.1 per cent to £164.7m. Operating profit at £5.9m has increased by £0.6m from that achieved in the prior year. The increase in billings reflects the higher level of customer prepayment orders fulfilled in the UK for Christmas 2014 at £189.3m. Billings in respect of flexecash® cards totalled £32.5m (2014 - £21.1m).

In the corporate business, customer billings have increased by £21.6m (14.0 per cent) in the year to £176.1m. Growth in billings in the incentive and reward sector was again strong, up £20.3m (23.2 per cent) in the year. In addition, in the employee benefits and cash replacement sectors billings increased by £8.6m. In contrast, billings in the credit sector were £8.7m lower than last year principally due to a reduction in the value processed through the flexecash® card system. Revenue has increased by £20.4m to £128.6m. The growth in operating profits of £1.6m to £6.5m reflects the strong growth in billings. Billings in respect of flexecash® cards totalled £54.0m (2014 - £50.0m).

The increased costs in other segments of £0.3m reflects primarily an increase in staff costs.

Finance income

Finance income declined from £1.6m to £1.2m reflecting lower market interest rates available. This reduction was in spite of an increase of approximately £18m in average total cash balances including monies held in trust, to just under £121m, over the prior year.

Taxation

The effective tax rate for the year was 22.3 per cent (2014 - 22.6 per cent) of profit before tax.

Earnings per share

Basic earnings per share (eps) increased to 4.66p from 4.16p.

Dividends

The board has recommended a final dividend of 1.60p per share. An interim dividend of 0.80p per share was paid on 7 April 2015. Subject to approval of the final dividend at the AGM, the total dividend for 2015 will be 2.40p per share representing an increase of 4.3 per cent over the prior year.

Cash flows

At the end of March 2015 £26.3m (2014 - £14.8m) of cash and cash equivalents offset by a cash book overdraft of £3.1m (2014 - nil) was held by the Group with a further £0.5m (2014 -£0.5m) held as deposits with a maturity period of greater than three months but less than 12 months. In addition, £50.9m (2014 - £45.4m) was held by the Park Prepayments Trustee Company Limited. The trust holds payments received in respect of orders for delivery the following Christmas. The conditions for the release of this money to the Group are detailed in the trust deed, which is available at www.getpark.co.uk. In addition, at 31 March 2015, the Group held £14.9m (2014 - £12.1m) of cash in the Park Card Services Limited E money Trust (PCSET) to support the E money float in accordance with regulatory requirements.

The total amount of cash and deposits net of any overdraft position held by the Group combined with the monies held in trust has increased in the year to £89.5m from £72.9m as at 31 March 2014. These total balances peaked at just under £189m in the year, representing an increase of almost £24m over last year. This was due to the increased volumes of cash receipts associated with higher level of billings generally across all areas of the Group.

During the year the Group has transferred both of its investment properties into assets held for sale, with one property sold in the year for proceeds of £45,000 (less cost to sell) and the remaining property being written down to a book value of £39,000. Impairment charges in the year in respect of these properties amounted to £109,000. The Group has also capitalised a further £0.6m (2014 - £1.0m) of expenditure incurred in improving its customer facing systems, infrastructure and associated computer hardware.

Interest income received from maturing deposits declined from £1.9m to £1.2m reflecting the general decline in rates being offered for new bank deposits over the previous year.

Provisions

At the year end, provisions had increased to £43.2m from £37.2m. This was mainly due to an increase in the provision for unspent vouchers of £5.6m, accompanied by an increase in the amounts provided in respect of flexecash® cards of £0.3m. The value of unspent vouchers included in the provision, arises primarily from sales in the corporate business. Included within provisions is an amount of £80,000 (2014 - £53,000) in respect of future expected settlements of claims arising from the mis-selling of payment protection insurance. The Group ceased to sell this insurance in 2007 when it closed its loan broking business.

Accounting policies

Revenue recognition

Revenue from cards is recorded differently to revenue from paper vouchers and comprises the fees earned based on customer billings, recognised when the value loaded on the card has been redeemed. Where cards are sold to businesses for onward gifting to consumers with no right of redemption, revenue also includes an estimate of projected balances remaining on the card at expiry. The amount included in this year's income statement as revenue from flexecash® cards is £7.4m (2014 - £5.4m).

Pensions

The Group continues to operate two defined benefit pension schemes, where pensions at retirement are based on service and final salary. These schemes are now closed to future accrual of benefit arising from service with the Group. The net pension deficit based on the valuation under IAS19 Employee Benefits (2011 revised) performed at 31 March 2015 has increased to £1.3m (2014 - £1.2m).

The Group has recognised a cost of £42,000 (2014 - credit of £1,000) in the income statement, and remeasurements in the statement of comprehensive income (SOCI) of a loss of £0.6m (2014 - loss of £1.3m) net of tax.

In the year ended 31 March 2015, contributions by the Group to the schemes totalled £0.7m (2014 - £0.7m). The latest actuarial valuations performed as at 31 March 2013 indicated that one scheme had a technical provisions deficit (reflecting the liabilities to pay pension benefits in relation to past service as they fall due) of £3.8m and one had a surplus on the same basis of £0.6m. Future Group contributions to the scheme that is in deficit are expected to be £0.7m per annum.

Martin Stewart

Group Finance Director

9 June 2015

Risk factors

Park Group plc

Park Group plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR TO 31 MARCH 2015

Park Group plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2015

Park Group plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Park Group plc

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR TO 31 MARCH 2015

NOTES TO THE PRELIMINARY RESULTS

(1) Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS's) as adopted by the European Union (EU) including International Financial Reporting Interpretations Committee (IFRIC) interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

Park Group plc is incorporated and domiciled in the United Kingdom. The financial statements have been prepared under the historical cost convention, as modified by the accounting for financial instruments at fair value where required by IAS 39 Financial Instruments: Recognition and Measurement. The Group and Company financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except where otherwise stated.

The accounting policies have been applied consistently to all periods presented in these financial statements and by all Group entities.

(2) Going concern

The Group's business activities, together with factors likely to affect its future development, performance and position, are set out in the chief executives review. The financial position of the Group, its cash flows, liquidity and solvency position and financial risks are described in the financial review.

The Group's forecasts and projections, taking into account reasonably possible changes in trading performance and customer behaviour, show that the Group has sufficient financial resources to fund the business for the foreseeable future despite the Group's net liabilities and net current liabilities. Funds are utilised for working capital purposes as permitted under the terms of the PPPT. The Group's working capital requirements are dependent upon a continuing level of prepaid sales to corporate customers and, at certain times during the year, amounts drawn from the PPPT to meet its working capital requirements. The Group's positive cash flow from its ongoing customer base, together with the capability to drawdown funds from the PPPT at certain times of the year, enables it to operate without reliance on any external funding. The Group continues to trade profitably and early indications for growth in the current year are positive. Accordingly, the directors continue to adopt the going concern basis in preparing the consolidated financial statements.

(3) Changes to International Financial Reporting Standards

Interpretations and standards which became effective during the year

The following accounting standards and interpretations, that are relevant to the Group, became effective during the period:

Adoption of these amendments and interpretations to standards has not had a material impact upon the Group's financial performance or position.

Interpretations and standards which have been issued and are not yet effective

The following standards have been adopted by the EU but are not yet effective for the year ended 31 March 2015 and have not been applied in preparing the financial statements. Those standards that have relevance to the Group are mentioned below:

The directors anticipate that the adoption of these standards and interpretations in future periods will not have a material impact on the financial statements when the relevant standards and interpretations come into effect.

IFRS 15 Revenue from Contracts with Customers was released on 28 May 2014. The board of directors is currently considering the impact of this standard on the Group's financial statements including the timing of revenue recognition, income in respect of vouchers and balances on cards which will never be spent and whether revenue should be recognised on a gross or net basis in respect of certain revenue streams.

(4) Accounting policies

The financial information in this preliminary announcement has been prepared in accordance with the accounting policies described in the annual report and accounts for the year ended 31 March 2014. The annual report and accounts for the year ended 31 March 2014 can be found on our website at www.parkgroup.co.uk.

(5) Segmental analysis

All other segments are those items relating to the corporate activities of the Group which it is felt cannot be reasonably allocated to either business segment.

The amount included within the other segments/elimination column reflects vouchers sold by the corporate segment to the consumer segment. They have been included in other segments/elimination so as to show the total revenue for both segments.

Comments on the effective tax rate can be found in the financial review.

(7) Earnings per share

The calculation of basic and diluted eps is based on the profit on ordinary activities after taxation of £8,499,000 (2014 - £7,409,000) and on the weighted average number of shares, calculated as follows:

(8) Reconciliation of net profit to net cash inflow from operating activities

(9) Restatement of prior period figures

The prior period figures have been restated for the following:

At the beginning of the period under review our online business, highstreetvouchers.com (HSV.com), was transferred from our consumer business to our corporate business as the majority of sales value generated from this online business related to corporate customers. There is no impact on either the statement of financial position, the income statement or the statement of other comprehensive income. Previously reported segmental figures have been restated as follows:

(10) Responsibility Statement

To the best of each director's knowledge:

(11) The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 March 2015 or 2014 but is derived from those accounts.

Statutory accounts for 2014 have been delivered to the registrar of companies. The auditor, Ernst & Young LLP, has reported on the 2014 accounts; the report (i) was unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The statutory accounts for 2015 will be delivered to the registrar of companies following the AGM. The auditors have reported on these accounts; their report is unqualified and does not include a statement under either section 498(2) or (3) of the Companies Act 2006.

The annual report will be posted to shareholders on or before 27 July 2015 and will be available from that date on the Group's website: www.parkgroup.co.uk.