APP.L Regulatory News (APP)

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

Date: 2 December 2014

Park Group is the UK's leading multi-retailer, gift voucher and prepaid gift card business focussed on the corporate and consumer markets. Park's business is generally seasonal and the first half of the year is traditionally loss making with the bulk of annual revenues generated in the second half. The board is confident of delivering full year results in line with market expectations, based on the ongoing economic recovery and our solid forward order book.

Key points: Financial

· Billings rise 28.1 per cent to £75.4m (2013 - £58.8m)

· Revenue increases 21.0 per cent to £58.5m (2013 - £48.4m)

· Seasonal pre-tax loss reduces to £2.4m (2013 - loss £2.8m)

· Dividend of 0.8p (2013 - 0.55p), equivalent to 4.3 per cent increase after rebalancing

· Cash balances peak at £189m (2013 - £165m)

Key points: Operations

· GDP growth having positive impact

· Corporate billings up 26.4 per cent to £58.6m (2013 - £46.3m)

· Consumer billings increase 34.5 per cent to £16.8m (2013 - £12.5m)

· Strong advance in order books across all divisions

· flexecash® reloadable card continues to drive growth in billings

· E-commerce business maintains rapid growth

Chris Houghton, chief executive officer, commented:

"Park has delivered an excellent set of results for the first half of the year. Improvement in consumer confidence continues to have a positive impact on our businesses, assisted by our ongoing investment in information technology platforms, new product developments and our focus on building partnerships with an increasing number of retailers. The strength in our order books underpins our positive outlook for the future."

Enquiries:

INTERIM STATEMENT

Introduction

I am pleased to report that Park has delivered an excellent set of results for the six months to 30 September 2014. In our full year results statement in June, I reported that the growth in UK Gross Domestic Product (GDP) and the associated improvement in consumer confidence were having a positive impact across Park's business. The ongoing economic recovery continues to be reflected in our order books.

Financial highlights

Park's operations are seasonal and the first six months of the year are traditionally loss making. However this period is extremely busy and important for the Group in terms of order placement; activity in this period underpins the results for the full year. The financial performance in the first half of the year shows further growth in both the consumer and the corporate businesses with total billings increasing 28.1 per cent to £75.4m (2013 - £58.8m) while revenue rose 21.0 per cent to £58.5m (2013 - £48.4m).

The operating loss improved by £0.7m to £3.0m (2013 - loss £3.7m), although interest receipts were lower at £0.6m (2013 - £1.0m) reflecting the very low interest rate environment. The pre-tax loss reduced by 12.7 per cent to £2.4m (2013 - loss £2.8m). Cash balances held in trust at 30 September were £152.1m (2013 - £125.7m), 21.0 per cent higher than at the same date last year. Cash balances peaked at a record £189.0m (2013 - £165.0m) at the beginning of November.

Dividend

In recent years Park's interim dividend has been approximately one quarter of the total dividend for the year. It is the Company's intention, subject to trading conditions, to rebalance the dividend so that the interim is closer to one third of the total dividend for the year. Park's total dividend for the year to 31 March 2014 was 2.3p (2013 - 2.1p). The interim dividend for the six months to 30 September 2014 will be 0.8p, which is equivalent to an increase of 4.3 per cent for the rebased interim dividend. The dividend will be paid on 7 April 2015 to shareholders on the register on 6 March 2015.

Operations

The corporate business, which offers a wide range of gift cards, vouchers and e-codes, as well as tailor-made reward and incentive schemes, performed very well with billings up 26.4 per cent to £58.6m (2013 - £46.3m). Overall sales to the credit market remain weak but this was more than offset by growth in other areas. Sales to the incentive sector were well ahead of the same period last year, while demand for the Everyday Benefits card, our reloadable product for the voluntary benefits market, was particularly encouraging. The flexecash® card continues to drive growth in billings with an increase of 59.9 per cent in balances loaded in the first half of the year compared with twelve months earlier. Park's Love2shop voucher has also performed well, with billings more than 15 per cent up on the same period last year. Customer retention rates, a key indicator of performance, are being maintained at an encouraging 83 per cent.

The consumer business offers customers the ability to save for the festive season over a 45 week period, to purchase a range of gift cards, vouchers, hampers and presents. This seasonal operation, which invoices the majority of its sales in the second half of the year, performed well, with billings increasing by 34.5 per cent to £16.8m (2013 - £12.5m). The retail market has enjoyed a more stable period after a challenging Christmas 2013, following the failure of several well known high street retailers at the beginning of that year. As a consequence, orders for Christmas 2014 are some 8.5 per cent ahead of last year. The campaign for Christmas 2015 has started well and at this early stage orders, customer numbers and average agent order value are all ahead of the comparable time last year.

We continue to strive to improve customer choice by increasing the number of retailers accepting both the flexecash® card and the traditional paper voucher. The card is now accepted by 63 retail brands in the UK (2013 - 59 brands) and 15 brands in the Republic of Ireland (2013 - 10 brands), whilst the voucher is accepted by 144 brands in the UK (2013 - 95 brands) and 44 brands in Ireland (2013 - 40 brands).

Corporate and consumer customers are increasingly using internet and social media channels in ever increasing numbers and Park services this trend through its programme of continuous innovation to improve further customers' online experience. Development work is focused on improving service levels, website user experience and product offering. The success of this programme can be seen, for example, in the customer response to our 2015 Christmas savings campaign with more than 88 per cent of the early orders placed online, up from 85 per cent last year. Order values in Park's other e-commerce businesses increased by 31.8 per cent to £7.9m (2013 - £6.0m) in the period, another positive indication of the impact of the development programme. In addition, the migration of the corporate business to more of a self-serve model is showing encouraging results.

During the period our Love2shop product was rebranded with a fresh new logo which has been rolled out across websites, vouchers and flexecash® cards. Following this design enhancement, several of the Group's product offerings are being rebranded using the new Love2shop logo and imagery, including Love2reward which has become Love2shop Business Services.

The results of our online operation, hightstreetvouchers.com, are now included with those of the corporate business as the majority of billings generated are to corporate customers.

Outlook

The second period has started well and is maintaining the encouraging trading level of the first half. The order book for Christmas 2014 is ahead of last year and corporate sales also continue to advance with good growth from the incentive and reward market.

Investment in information technology, new product development and retailer relationship building are at the heart of Park's growth strategy. We look forward with confidence, encouraged by improving market conditions and the strength and quality of our order books. The Group is on course to meet market expectations for the full year.

Peter Johnson

Non-executive Chairman

2 December 2014

PARK GROUP PLC

UNAUDITED CONSOLIDATED INCOME STATEMENT

FOR THE HALF YEAR TO 30 SEPTEMBER 2014

All activities derive from continuing operations.

Park Group plc

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF YEAR TO 30 SEPTEMBER 2014

PARK GROUP PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2014

PARK GROUP PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

PARK GROUP PLC

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR TO 30 SEPTEMBER 2014

PARK GROUP PLC

UNAUDITED SEGMENTAL REPORTING

FOR THE HALF YEAR TO 30 SEPTEMBER 2014

NOTES TO THE INTERIM RESULTS

(1) Basis of preparation

The financial information in this interim report has been prepared in accordance with the International Financial Reporting Standards as adopted by the EU and the AIM rules of the London Stock Exchange and on the basis of the accounting policies described in Park Group plc's annual report and accounts for the year ended 31 March 2014. These accounting policies have been based on the current standards and interpretations expected to be effective at 31 March 2015. The Group does not expect there to be a significant impact on the results from standards, amendments or interpretations which are available for early adoption but which have not yet been adopted.

IFRS 15 Revenue from Contracts with Customers, which was released on 28 May 2014, has not yet been endorsed by the EU. The Group is still considering the impact of this standard on its financial statements.

The financial statements have been prepared under the historical cost convention, as modified by the accounting for financial instruments at fair value. In addition this interim financial report does not comply with IAS 34 Interim Financial Reporting, which is not currently required to be applied under AIM rules.

The directors are of the opinion that the financial information should be prepared on a going concern basis, in the light of current trading and the forecast positive cash balances for the foreseeable future.

The financial information included in this interim financial report for the six months ended 30 September 2014 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and is unaudited. A copy of the Group's statutory accounts for the year ended 31 March 2014, on which the auditors gave an unqualified opinion and did not make a statement under section 498 of the Companies Act 2006, has been filed with the registrar of companies.

(2) Taxation

The taxation credit for the six months to 30 September 2014 has been calculated using an overall effective tax rate of 21.0 per cent which has been applied to the taxable income (half year to 30 September 2013 - 23.0 per cent).

(3) Earnings per share

Basic earnings per share (eps) is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

For diluted eps, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.

The calculation of basic and diluted eps is based on the following figures:

(4) Reconciliation of net (loss)/profit to net cash (outflow)/inflow from operating activities

(5) Restatement of prior period figures

(i) At 30 September 2013, issue costs of £187,000 relating to the share placement which occurred in June 2013, were included within the income statement. When we announced our full year results at 31 March 2014 these costs had been credited to the income statement and deducted from the share premium account. The figures at 30 September 2013 have been restated to be consistent with the treatment of the costs at 31 March 2014.

(ii) As reported previously, the liability relating to those cards whose terms are very similar to vouchers are now reported as provisions rather than trade and other payables. Following further consideration at 31 March 2014 of the terms of certain cards, card balances totaling £1,307,000 previously reported as trade and other payables at 30 September 2013, have been reclassified as provisions.

(iii) 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. Previously reported figures have been restated as follows:

(6) Approval

This statement was approved by the board on 2 December 2014.

(7) Reports

A copy of this announcement will be available on the Company's website from today www.parkgroup.co.uk and will be mailed to shareholders on 18 December 2014. Copies will also be available for members of the public at the Company's registered office - Valley Road, Birkenhead CH41 7ED and also at the offices of the Company's registrars, Computershare Investor Services PLC, P O Box 82, The Pavilions, Bridgwater Road, Bristol BS99 7NH.