News Column

Park Group Reports Lower Annual Profit But Lifts Dividend 10%

June 10, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Voucher and gift card business Park Group PLC Tuesday reported lower profits and revenue for its last financial year, due to a reduction in billings from its card business and a lower order book in the UK for Christmas 2013.

For the year ended March 31, the group reported a pretax profit of GBP9.4 million compared with GBP9.5 million a year earlier, as revenue in the year fell to GBP269.6 million from GBP279.0 million the prior year.

The UK-based gift voucher and prepaid gift card company said it has started the current financial year well, and gave a positive outlook for the year ahead, citing improvements in UK economic conditions and consumer confidence, as well as a more stable environment in the retail sector.

Signalling its confidence despite the flat annual performance, the group raised its total dividend for the year to 2.30 pence per share, up 10% from 2,10 pence a year earlier.

"The combination of these factors and the steps taken by management to develop and grow our offerings, is reflected in rising order books across Park Group's operating division," Non-Executive Chairman Peter Johnson said in a statement.

"We look forward with optimism and will continue to focus on meeting the expectations of all our stakeholders," Johnson added.

The company said its order book in its in consumer business for Christmas 2014 is well ahead of last year. It also said the majority of its corporate business continues to deliver a good performance across its varied range of incentive and reward products, and is achieving a solid financial outcome while also adjusting to the lower levels of business from the consumer credit sector.

During the year, Park continued to invest in e-commerce and new products, to support its growing online business.

Park said the proportion of orders placed online via its websites continues to rise and is now over 56%. It said that customers' payment preferences are also changing with an increasing use of direct debits.

Park said its corporate business has seen a steady increase in customer numbers. The business allows companies to offer a range of gift cards and vouchers, including Park's Love2shop voucher and flexecash cards, as staff incentives and rewards.

However the group said that overall billings for the corporate business were 10% below last year's level, due to weakness in the consumer credit sector.

The group said that its consumer business, which represents the company’s sales to consumers, utilising its Christmas savings offering and consumer sales via the internet, saw billings for the year fall 0.4% below the level of the previous year.

"Each Christmas marketing campaign commences a year in advance of the festive season and peaks in the first calendar quarter, with a carefully targeted advertising and communications programme," the company said.

"As already mentioned, the campaign for Christmas 2013 was affected by general economic uncertainty and the failure of a number of high street retailers in the early months of that year, which coincided with the time customers usually commence their contribution programme," it said.

Park said that as the outlook for the retail sector and consumer confidence in the UK improved during the year, its order book for Christmas 2014, is already 10% ahead of last year with cash contributions rising by a similar amount.

Park said its Irish business, which it acquired in 2010, made further progress during the year, with billings ahead by 17% and the order book for Christmas 2014 currently 7% above that of the previous year.

Park shares were up 3.0% Tuesday morning at 53.55 pence.

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Source: Alliance News

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