Employing around 250 people in Liverpool, savings, vouchers and corporate rewards business Appreciate Group has seen a big fall in profits due to the pandemic. Tony McDonough reports
Savings, vouchers and corporate rewards business Appreciate Group says its full year pre-tax profits have plummeted by 83% due to the impact of the pandemic.
Liverpool city centre-based Appreciate, formerly known as Park Group, saw pre-tax profits for the year to March 31, 2021, fall to £1.3m from £7.7m in the previous year. Revenue was 5% lower at £106.8m.
Appreciate relocated from its original home in Wirral to 20 Chapel Street in Liverpool city centre in 2019, moving more than 250 staff. In November 2020 it closed its decades-old Christmas hampers operation to focus on financial services. It sold its old HQ for around £3m.
The fall in profits was also partly due to the closure of the hampers operation which caused a one-off cost of £1.1m. This included £1.2m in redundancy payments, £300,000 in lease costs and £800,000 in other costs. This was offset by £1.2m in revenues from the business.
Closing the hampers operations the end of an era for Appreciate which began life in the 1960s as a Christmas savings and hampers club. It grew out of the Birkenhead butchers shop owned by the family of the business founder, Peter Johnson.
AIM-listed Appreciate is now fully focused on Christmas savings, vouchers and pre-paid cards for retailers and corporate rewards. The firm reports what it calls ‘billings’. This represents the value of goods and services shipped and invoiced to customers, net of VAT, rebates and discounts.
Group billings were down marginally in the 12-month period by 3.2% to £406.5m (2020: £419.9m) following the early impact of the initial lockdown and ceasing of hamper packing. However, the group saw its ongoing digital transformation pay off during the year with digital billings up almost four-fold to £68.5m.
In May this year Appreciate announced a new distribution partnership with PayPoint. This provides customers with access to purchase Love2shop products via a physical network of 28,000 outlets across the UK, many based in small convenience stores.
Trading in the first 12 weeks of the current financial year has been slower than anticipated and continued to be impacted by the pandemic, as customer buying and spending patterns take time to return to normal levels.
Chief executive Ian O’Doherty said: “Like other businesses, we have faced many challenges over the past year, but I’m pleased to say we have put the group in the best position to weather the uncertainty.
“Having re-focused the business on its core product and delivering for our customers and clients in the prepayment, gifting and engagement markets, and enhanced our digital capability, we have laid strong foundations for future years of growth.”