13 Jan 2023 07:00
13 January 2023
Appreciate Group plc
Q3 FY 2023 Trading Update
"Trading in line with expectations"
Appreciate Group (the 'Group'), the UK's leading multi-retailer redemption product provider to Corporate and Consumer markets, today issues the following trading update for its Q3 trading period, representing the three months ended 31 December 2022 of the current financial year ending 31 March 2023 (FY23).
Trading Overview
Trading in Q3 was as expected and reflected the normal pattern of seasonality and, consequently, our profit outlook remains in line with the Board's expectations despite the current economic headwinds.
Q3 FY23 £m | Q3 FY22 £m | Q3 YTD FY23 £m | Q3 YTD FY22 £m | |
Billings |
| |||
Underlying Appreciate Business Service (ABS) | 74.5 | 71.4 | 138.6 | 135.2 |
Free School Meals | - | 4.6 | 3.1 | 12.9 |
Total ABS | 74.5 | 76.0 | 141.7 | 148.1 |
Park Christmas Savings (PCS) | 135.4 | 129.7 | 160.3 | 163.7 |
High Street Vouchers (HSV) | 15.1 | 18.0 | 26.2 | 30.0 |
Total Billings | 225.0 | 223.6 | 328.2 | 341.8 |
Total Revenue | 65.8 | 59.7 | 104.5 | 100.7 |
Net Finance Income | 0.8 | - | 1.4 | (0.1) |
Free Cash | 16.8 | 33.6 | - | - |
Monies held in Trust | 123.8 | 116.7 | - | - |
The Group has continued to prioritise driving profitable billings within its High Street Vouchers business ahead of volumes. In the Appreciate Business Services' market, we have continued to focus on retaining our existing corporate clients while increasing the number of new clients purchasing from us for the first time. New client numbers have increased by 27% vs last year, which was offset by a reduction in average order value of 8% across our entire ABS client base.
The new Park Christmas Savings 2023 campaign launched in September with encouraging early signs that this channel can return to growth. It traded strongly in Q3 and is in-line with expectations year to date, underpinned by continued high levels of agent and direct customer retention rates.
For the third year running, the Group has retained "Great Place to Work" certification, with 85% of colleagues expressing their views, and a significant increase in the overall Trust index score from the previous year - 68% to 78%.
Free cash is lower than last year due to the continued shift towards digital products, normalising of spending patterns and a higher dividend payment in the year. The Group has not needed to draw down its £15m Revolving Credit Facility and there is no expectation that it will need to do so in the foreseeable future.
Recommended Offer from PayPoint plc ("PayPoint")
On 7 November 2022, the boards of directors of Appreciate Group and PayPoint announced that they had reached agreement on the terms of a recommended offer pursuant to which PayPoint will acquire the entire issued and to be issued share capital of Appreciate Group, to be effected by means of a Court-sanctioned scheme of arrangement.
A circular in relation to the Offer was published on 2 December 2022 and the process remains subject to Court and General Meeting approvals (at meetings scheduled for 20 January 2023) and the satisfaction (or, where applicable, the waiver) of the remaining scheme conditions.
Commenting, Guy Parsons, Executive Chair of Appreciate Group plc, said:
"We are pleased to report trading has been in line with expectations despite the challenging macroeconomic environment. We have continued to work to accelerate the simplification of the business and to drive our most profitable billings, which is intended to enhance earnings in the medium term. We are also ensuring that we are earning a suitable risk adjusted return from the large cash sums held on deposit."
Appreciate Group plc | Liberum (NOMAD and broker) | MHP |
Guy Parsons, Executive Chairman | Richard Crawley Jamie Richards | Reg Hoare Katie Hunt Charles Hirst |
Julian Coghlan, Interim Chief Executive Talha Ahmed, Interim Chief Financial Officer
Tel: 0151 653 1700 |
Tel: 020 3100 2222 |
Tel: 020 3128 8193 Email: appreciategroup@mhpgroup.com |
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 corporate 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, Appreciate Business Services 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 helps around three hundred thousand 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 Appreciate Business Services providing corporate partners with incentives and rewards for their employees and clients.
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: https://www.getpark.co.uk/CORPORATE/declaration.pdf