Full-year profits at Liverpool savings, vouchers and corporate rewards business Appreciate Group will hit £7.5m – ahead of expectations. Tony McDonough reports
Savings, vouchers and corporate rewards business Appreciate Group is reporting a rise in pre-tax profits as its recovery from the pandemic gathers pace.
Stock market-listed Appreciate, which employs around 250 people at its Liverpool headquarters, has issued a trading update ahead of the publication of its end-of-year report for the 12 months to March 31, 2022.
Previously known as Park Group, the business closed its traditional Christmas hampers operation in 2020 it is now focused on Christmas savings and providing vouchers and pre-paid cards for retailers and corporate rewards.
One of its best-known products is the Love2shop gift card which can be redeemed with around 200 household brands including Argos, Boots, Iceland, M&S, Matalan, River Island and Schuh. It was boosted further in March when Appreciate agreed a deal with Primark that will see the fashion retailer accept the cards in its store network.
In the latest trading update, the company says it is providing figures for the full-year 2020 as its primary comparison with the latest figures as this was the last full year before the COVID-19 pandemic hit, skewing its performance.
Analysts had been expecting pre-tax profit for the 12-month period to come in at around £6.8m. This has now been raised to £7.5m. Appreciate reports what it calls ‘billings’. This represents the value of goods and services shipped and invoiced to customers, net of VAT, rebates and discounts.
This latest update shows total group billings for the year of £385.8m. This is lower than the pre-pandemic figure of £406.5m and last year’s figure of £419.9m. Billings for the Christmas Savings book for the coming year are expected to be down by 4%. However, this is a big improvement on recent trends of -15% and -8% in the last two years.
Corporate billings of £212.1m were 8.7% above pre-pandemic and 5.4% ahead of last year. Full year digital billings increased to £54m against £45.5m last year and £17.7m pre-pandemic.
The COVID lockdown at the beginning of last year saw non-essential retail largely closed, meaning there was a delay in the redemption of the group’s products for which income is recognised at the point of redemption.
The statement added: “The financial impact of this in FY21 was to reduce profits by £3.9m and, as expected, part of this has reversed in FY22, increasing profits in the year by £2.4m.”
Appreciate also announced that its chief financial officer, Tim Clancy, will leave the Group with effect from the end of July 2022 to take up another opportunity. Tim was appointed to his current role in August 2018. The group is seeking to appoint a replacement CFO as soon as possible to ensure a smooth hand over of responsibilities.