Good morning,

I'm slightly sunburned after a weekend which included BBQ & watching the football outside. Well done England!

Of interest today are:



Park (LON:PKG)

  • Share price: 73.25p (+1%)
  • No. of shares: 185.6 million
  • Market cap: £136 million

Park Group Wins New Retail Contracts

(Please note that I currently hold PKG shares.)

An encouraging RNS from this Christmas savings, gift card and voucher business.

I own shares in this and view it as a conservative holding. It has a bunch of attractive features: highly cash generative, low capex requirements, a rich history, a couple of recognisable brands ("Love2shop" and highstreetvouchers.com), and a strong balance sheet.

It offers a hedge against interest rate increases, too (since it holds a very large cash balance on behalf of customers, though I think this needs to be balanced against the reduced High Street spending which could result from higher interest rates).

The only thing it's lacking is growth, and this is why it remains a fairly small holding for me. I don't see its valuation changing dramatically unless its new CEO and the wider management team find growth levers somewhere.

Today's news does offer some hope that they might be able to do this. Four retailers have agreed to accept Park's Love2shop vouchers, including Arcadia (owner of Topshop, Topman and Miss Selfridge).

In addition, Fat Face is joining Park's prepaid card scheme, "flexecash".

The CEO comment is optimistic for the future:

"Love2shop' is already the nation's number one multi-retailer voucher, but these exciting new retail collaborations will open up new, or strengthen existing markets for us, as well as expanding our retailer base...
"Arcadia Group brands are visible on nearly every UK high street or shopping centre, so this is a major new signing for our business and really boosts the opportunities for our customers and clients across the UK."

My view

Park's vouchers are already widely accepted, so there is a natural limit in terms of how quickly their distribution can spread from the…

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