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APP - Appreciate News Story

40.5p -0.5  -1.2%

Last Trade - 19/04/21

Sector
Industrials
Size
Small Cap
Market Cap £76.4m
Enterprise Value £55.9m
Revenue £106.9m
Position in Universe 1136th / 1819

Appreciate Group PLC - Trading Update

Tue 12th January, 2021 7:00am
RNS Number : 3117L
Appreciate Group PLC
12 January 2021
 

12 January 2021

Appreciate Group plc

 

Q3 and Christmas trading update


Strong performance through Q3 peak trading period as momentum continues in digital

 

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 important Q3 trading period for the three months ended 31 December 2020 in the current financial year.

 

·    Underlying Q3 billings1 were up by 13.1 per cent to £96.3m (Q3 2019: £85.1m).

This included a 42 per cent increase in December to £45.5m (Q3 2019 £32.1m) - our best ever month.

And continued positive momentum in digital sales, with an almost four-fold total rise over the period to £22.5m (Q3 2019: £5.9m), reflecting the acceleration of online retail.

·    Corporate:

A strong performance, with billings up 12 per cent in Q3 2020, including a 42 per cent rise in December driven by clients rewarding employees; and record levels of business from new clients.

·    Consumer:

Billings via Highstreetvouchers.com were up 36 per cent versus Q3 2019, including a 38 per cent rise in December.

·    The Group is expected to deliver a full year performance for the year ending 31 March 2021 at least in line with the mid-range scenario as set out in its 2020 annual report and accounts, although the latest lockdown measures may delay some revenue and profit until customers have more options to redeem their products.

·    Free cash as at 31 December 2020 stood at £33.5m (30 September 2020: £24.9m).

 

Billings
Corporate and HSV only

YTD up to 30 September

October

November

December

Q3 overall

YTD to 31 December

2020

£57.9m

£24.0m

£26.8m

£45.5m

£96.3m

£154.2m

2019

£81.2m

£26.4m

£26.6m

£32.1m

£85.1m

£166.3m

% diff

-40.2%

-9.3%

+0.9%

+41.7%

+13.1%

-7.3%

Figures exclude Free School Meals initiative

·    Billings YTD with the Free School Meals initiative included are £166.0m, broadly in line with the same period last year (2019: £166.3m).

1 Underlying billings include Corporate and Highstreetvouchers.com only. Christmas savings are excluded as order book largely completes by April. In the 2020/21 Half Year Results on 24 November 2020 we reported that this order book completed 8 per cent lower than 2019/20.  
 

Ian O'Doherty, Chief Executive Officer, at Appreciate Group plc, commented:

"I'm delighted to report that the Group has delivered a strong performance during its important Q3 peak trading period. As a seasonal business, the Group's performance has reflected the swing to profitability that we typically see in the second half of the financial year and the acceleration of our strategy to strengthen our digital capability has ensured a Q3 performance well ahead of last year.

"We saw our busiest ever month in December. Our Corporate performance has been enhanced by companies seeking ways to reward their hard-working employees as an alternative to traditional Christmas parties.

"The accelerated implementation of our strategy over the last year has helped us deliver an improved performance through this key period, and has strengthened the Group's proposition for consumers and corporates, leaving it well positioned for sustainable growth beyond the current financial year."

 

Growth in digital

A stronger focus on digital products through promotion of Love2shop e-codes and launch of the Love2shop Contactless Digital Gift Card, combined with improvements in our digital marketing capability, have helped us substantially increase digital sales by 282 per cent, from £5.9m to £22.5m in Q3 2020. Enhancements to digital marketing saw us achieve a greater share of search demand volume in our core gift card category in November and December. At the same time, we have seen a fall in paper as a share of the product mix, down from 36 per cent to 16 per cent year on year. An element of this will have been driven by the lockdowns and acceleration toward online retail this year.

Further business simplification

During December, the Group made further progress with its strategy to simplify the Group, with the completion of the sale of our brand engagement subsidiary, FMI, and the wind-down of the contract packing and Republic of Ireland businesses. This means management can now fully focus on driving the core business.

Improved system performance and resilience

The Group's performance in Q3 2020 was enabled by recent improvements to its core systems, following some stress encountered in the comparative period last year. As a result of the improvements made, the systems remained resilient despite significantly increased customer traffic to our websites. Between 1 September 2020 and 31 December 2020 visits to Highstreetvouchers.com were up by more than a fifth, and Love2shop.co.uk saw visits increase by over a third versus the same period last year. Outages were down to zero from 14 in 2019 and CPU usage fell from over 90 per cent in 2019 to consistently below 40 per cent for 2020.  

Further improvements are planned during 2021 through the implementation of the new Enterprise Resource Planning system that will provide a more robust and scalable system on which to grow our business in the future.

Looking ahead with confidence

We had indicated our confidence in the Group's second half performance in November when the decision was taken to reinstate the dividend and repay all funds utilised from the Coronavirus Job Retention Scheme, which were subsequently repaid in December.

This strong Q3 performance has underlined that confidence and means that we now expect the Group to deliver a full-year performance at least in line with the Board's expectations.

Although we expect the latest national lockdown to impact redemptions due to the closure of non-essential outlets, the business is now more resilient to these restrictions than when measures were first introduced back in March 2020 and our strong increase in billings provides an encouraging indicator of future performance.

The continued investment in the Group's transformation and products, and the delivery of our strategy in smarter, more efficient ways of working will help us drive sustainable growth beyond the current financial year.

END

For further information please contact:

For further information please visit  https://www.appreciategroup.co.uk or contact:

 

Appreciate Group plc

Liberum

(NOMAD and broker)

MHP Communications

Andy Hammerton, Head of Corporate Affairs

Ian O'Doherty, CEO

Tim Clancy, CFO

Richard Crawley

Jamie Richards

Reg Hoare / Katie Hunt / Charles Hirst

 

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. Details of the trust are set out here:

 

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