TIDMAPP
RNS Number : 9796W
Appreciate Group PLC
29 April 2021
29 April 2021
Appreciate Group plc
Year-end trading update
Resilient full year performance, in line with market
expectations
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 full year
performance for the year ended 31 March 2021.
Highlights
-- Results for the year in line with market expectations(1)
-- A resilient second half performance reflects strong Corporate
demand, increased digital sales and previous restructuring actions,
mitigating COVID impacts
-- This excludes c.GBP3.0m of non-recurring restructuring costs
including the wind down of hamper production and the Republic of
Ireland business, of which at least GBP0.6m is expected to be
classified as exceptional costs
-- Year--end free cash of GBP32.9m (excluding funds required to
be held in trust) (2020: GBP29.6m)
-- Total Group billings, including free school meals initiative, of GBP406.5m (2020: GBP419.9m)
-- Underlying billings (which includes Corporate and
Highstreetvouchers.com (HSV) only) continued to stabilise following
the improvements seen since the initial impact of the pandemic
o Underlying billings down 11.2% in Q4 2021 compared to the same
period last year
o Underlying billings for the year were down by 8.0% to
GBP187.5m, from GBP203.8m in 2020
Underlying Billings 9 months Q4 to 31 March Underlying billings
(Corporate and to 31 Dec for the year
HSV only*)
2021 GBP154.2m GBP33.3m GBP187.5m
----------- --------------- --------------------
2020 GBP166.3m GBP37.5m GBP203.8m
----------- --------------- --------------------
% diff -7.3% -11.2% -8.0%
----------- --------------- --------------------
*Total billings when free school meals added to Corporate and
HSV for 2021 are GBP210.5m
(1) Current range of analyst expectations for FY 2021 Profit
Before Tax are GBP4.1m to GBP4.8m.
Lockdown impact on customers
-- As stated in the Q3 Trading Update on 12 January 2021, we
continue to see a delay in spending patterns whilst customers had
fewer options to redeem their products in stores. This has led to a
greater level of deferred profit, equating to c.GBP3m. We expect
this delayed spend to come through in the new financial year as
lockdown restrictions ease.
-- The Christmas Savings' order book is predicted to be c.11%
lower, having been held back by COVID-19 restrictions impacting
face-to-face agent activity. Unspent paper vouchers are GBP6.4m
higher compared to last year due to shopping restrictions and it
would appear some customers intend to use them towards Christmas
2021, rather than starting a new savings plan. A number of
initiatives are underway to recruit Christmas savings' customers
and incentivise agents.
Continued momentum in digital
-- The accelerated digitalisation of the business has helped
mitigate the effects of the pandemic. Digital billings were up more
than five-fold in Q4 to GBP19.2m (2020: GBP3.5m)
-- Overall digital billings increased 286% to GBP68.4m (2020:
GBP17.7m) during the year, building on the four-fold rise in the
important Q3 peak trading period.
-- Progress in the transition away from paper continues, with
billings down 46% year on year, partially driven by the impact of
lockdown.
Strategic progress
Significant progress was made over the last year in building the
robust and scalable business model that will position the Group
well for future sustainable growth.
-- The Group is now fully focused on growing the core, more
profitable business having disposed of, or withdrawn from, hamper
production, contract packing, our operations in the Republic of
Ireland, and the brand engagement agency, FMI.
-- The next phase of the Enterprise Resource Planning (ERP)
programme remains on track to be delivered in the summer; with the
following phase due to be delivered in the second half of the
financial year. This is a cornerstone in the Group's plans to build
a robust and scalable platform and will provide significant
benefits through enhanced resilience and workflow. The original
scope of the project has evolved as the Group has accelerated its
digital focus during the pandemic, with cumulative project costs up
to the financial year ended 31 March 2021 of c.GBP6m. The Group
plans to continue to invest in enhancing its digital proposition to
exploit future growth opportunities.
-- The Corporate business was repositioned during the year to
support plans for growth in the market, helping to deliver our
busiest ever December, as clients looked at alternatives to reward
their workforces, and record levels of new business.
-- Cultural transformation has enabled us to become more
effective and deliver a range of important growth initiatives over
the last year, such as rebranding our Corporate business and
launching Love2shop Digital Contactless Gift Card. We've also been
recognised externally with a prestigious Business Culture Award for
Best Working Environment & Workplace Design, following the head
office move to Chapel Street, Liverpool, as well as having attained
Great Place to Work accreditation.
Notice of results
Appreciate Group expects to publish its full year results for
2020/21 on 29 June 2021.
Ian O'Doherty, Chief Executive Officer, Appreciate Group plc,
commented:
"We have met the unprecedented challenges of the last year by
focusing on colleagues' wellbeing and the needs of our customers;
this meant accelerating our plans to become a leaner, more
digital-focused business, with an improved proposition for
Corporate and Consumer customers. Our recent investments in
infrastructure and workplace culture underpinned our ability to
come through the crisis stronger. All of which has helped us
mitigate the worst impacts of the pandemic and reposition the
business so we are better placed for future growth.
"Our people have been outstanding during this period and
demonstrated exceptional commitment, flexibility and
resilience.
"Whilst the speed at which normal levels of activity will return
is unclear, we believe that, as the economy emerges from lockdown,
we are better positioned to exploit the trends in our market and
deliver sustainable growth in future years."
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.
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END
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