Based in Liverpool, Appreciate Group is focused on Christmas savings, vouchers and corporate rewards, and says the COVID-19 pandemic will lead to lower profits for its full year. Tony McDonough reports

Liverpool Christmas savings, vouchers and corporate rewards business Appreciate Group says the “accelerated digitalisation” of its business has helped mitigate the impact of the pandemic.

Formerly known as Park Group, 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.

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.

In the 12 months to March 31, 2021, total group billings, including a free school meals initiative, came in at £406.5m. This is lower than the £419.9m reporting for the year to March 31, 2020.

The company said underlying billings (which includes corporate and Highstreetvouchers.com (HSV) only) continued to stabilise following the improvements seen since the initial impact of the pandemic. Underlying billings were down 11.2% in the final quarter of the financial years compared to the same period last year.

Underlying billings for the year were down by 8% to £187.5m, from £203.8m in 2020. However, thanks to the accelerated digitalisation of the business, digital billings were up more than five-fold in the final quarter to £19.2m (2020: £3.5m).

Overall digital billings increased 286% to £68.4m (2020: £17.7m) during the year, building on the four-fold rise in the important third quarter 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.

Appreciate Group will publish its full results for the year to March 31 on June 29. City analysts are predicting pre-tax profits of between £4.1m and £4.8m. This would be lower than the £7.7m achieved last year and well below the £11.3m for the 2018/2019 financial year.

The business says the COVID-19 lockdown has continued to hit its business due to 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 around £3m. 

Its Christmas Savings’ order book is predicted to be around11% lower, having been held back by COVID-19 restrictions impacting face-to-face agent activity. Unspent paper vouchers are £6.4m higher compared to last year due to shopping restrictions

Chief executive Ian O’Doherty, said: “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.

“While 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.”