TIDMAPP
RNS Number : 6132J
Appreciate Group PLC
28 April 2022
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").
28 April 2022
Appreciate Group plc
Year-end trading update
Strong full-year performance ahead of expectations
Third consecutive quarter of double digit growth in underlying
billings in Q4
Chief Financial Officer to stand down
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 full-year
performance for the year ended 31 March 2022. Due to the impact of
Covid-19 in FY21, we have used FY20 as the primary comparison, the
financial period prior to the pandemic, as well as providing FY21
data.
Highlights
-- Adjusted profit before tax for the year expected to be ahead of market expectations(1)
-- Q4 saw the third consecutive quarter of double-digit growth
in underlying billings* versus FY20 driven by strong Corporate
demand and increased digital billings
-- FY22 underlying billings were GBP222.0m, up 8.9% on FY20
(GBP203.8m) and 5.5% higher than FY21 (GBP210.5m)
Underlying billings* Q1 Q2 Q3 Q4 Total YTD total
excluding
free school
meals scheme*
*
FY22 GBP38.7m GBP45.7m GBP96.1m GBP41.5m GBP222.0m GBP205.8m
--------- --------- -------- -------- --------- --------------
FY21 GBP21.3m GBP46.4m GBP96.8m GBP46.0m GBP210.5m GBP187.5m
--------- --------- -------- -------- --------- --------------
FY20 GBP41.4m GBP40.1m GBP85.1m GBP37.2m GBP203.8m GBP203.8m
--------- --------- -------- -------- --------- --------------
% diff (FY22
vs FY21) +81% -2% -1% -10% +5.5% +9.8%
--------- --------- -------- -------- --------- --------------
% diff (FY22
vs FY20) -7% +14% +13% +12% +8.9% +1.0%
--------- --------- -------- -------- --------- --------------
-- Total Group billings of GBP385.8m (FY20: GBP406.5m) (FY21: GBP419.9m)
-- Billings from the Christmas Savings book for FY23 are
expected to be down by c.-4%, showing an improvement on recent
trends
-- Following changes to the accounting standard relating to the
treatment of capitalised cloud computing arrangements, the Group
expects to make an adjustment to intangible assets leading to a
non-cash exceptional P&L charge to the accounts for FY22 and a
prior year adjustment for historic spend. We are in the process of
agreeing the quantum of this charge with our auditors, but it is
expected to be a proportion of the intangible asset spend which
totals GBP10.0m across the three years
-- Year--end free cash of GBP19.5m as at 31 March 2022
(excluding funds required to be held in trust) (FY20: GBP29.6m)
(FY21: GBP31.4m) - reflecting the growth in regulatory billings
(which require increased customer monies to be held in trust until
redemption)
* Corporate and Highstreetvouchers.com only
** Billings through free school meal scheme were GBP16.2m (FY21:
GBP23.0m) (FY20: Nil)
(1) Analyst expectations for FY22 profit before tax are GBP6.8m to GBP7.5m
As previously stated, the lockdown at the end of FY21, with
non-essential retail largely closed, meant there was a delay in the
redemption of the Group's products for which income is recognised
at the point of redemption. The financial impact of this in FY21
was to reduce profits by GBP3.9m and, as expected, part of this has
reversed in FY22, increasing profits in the year by GBP2.4m.
Chief Financial Officer departure
The Group also announces today that Tim Clancy, the Group's
Chief Financial Officer (CFO) 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. The Board would like to thank Tim
for his significant contribution to the launch of the Group's
strategic business plan in 2018 and building a more robust and
scalable platform for growth.
Growth momentum in Corporate
-- Corporate billings were GBP212.1m - up 8.7% versus FY20
(GBP195.2m) and 5.4% on FY21 (GBP201.2m)
-- Business retained from existing clients has recovered to over
90%, in line with pre-pandemic levels
Further progress in digital billings
-- Full-year digital billings increased 18.7% to GBP54.0m (FY21:
GBP45.5m) (FY20: GBP17.7m) excluding billings from free school
meals
Reinvigorating Christmas Savings
-- Projected billings for the Park Christmas Savings book for
FY23 are currently down c.-4%, an improvement on recent trends
o FY22: GBP163.8m -15%
o FY21: GBP193.3m -8%
-- This provides a greater level of confidence in our
proposition and our belief that we can return the business to
future growth
-- This follows a major focus on improving performance, led by a
fully integrated customer campaign across digital social media and
TV channels to help drive customer acquisition. Traditionally,
these campaigns have been more heavily led by TV advertising
-- Enhancements were also made to improve user experience,
customer on-boarding and digital journeys, which helped boost
levels of customers commencing their payment plans after initial
orders were placed, with first-time payment direct debit rates up
32% year on year
Commitment to ESG
We have achieved an ISO 14001 Environmental Management
certification and now meet the highest standards for environmental
management, demonstrating a strong commitment to sustainability and
protection. We also successfully completed an exercise using
eco-friendly, non plastic cards with one of our large Corporate
clients and are now rolling this out more widely.
Impact of new IFRS on Cloud Accounting
Over the last three years, Appreciate Group has capitalised
GBP10.0m of in-scope intangible assets in compliance with IAS
38.
During 2021, the International Financial Reporting
Interpretations Committee (IFRIC) published clarifying guidance in
relation to the accounting treatment for configuration and
customisation costs in a cloud computing arrangement. This guidance
is mandatory for all companies reporting under IFRS, and changes
resulting from the adoption of the guidance are to be applied
retrospectively.
We are currently working with our auditors to finalise the
revised accounting treatment and agree the quantum of this charge,
but expect to make an adjustment to reclassify a proportion of the
GBP10.0m intangible asset. This will lead to an exceptional
non-cash charge in FY22 and a prior year adjustment.
Notice of results
Appreciate Group expects to publish its full-year results for
FY22 on 28 June 2022.
Ian O'Doherty, Chief Executive Officer, Appreciate Group plc,
commented:
"I am pleased to report a strong outcome for the year and
results ahead of our expectations.
"The benefits of the investments we have made are now being
realised in digital and Corporate, where our differentiated
proposition is particularly strong. We have also made good progress
in Christmas Savings and can see opportunities to return this part
of our business to growth in the coming years.
"Whilst economic uncertainties remain, particularly following
recent rises in the cost of living, our strong Q4 performance
provides us with confidence for our prospects for the forthcoming
financial year and beyond, and we are well positioned to build on
our strong capabilities to capture future growth opportunities
."
For further information please contact:
For further information please visit
https://www.appreciategroup.co.uk or contact:
Appreciate Group plc Liberum MHP Communications
(NOMAD and broker)
Andy Hammerton, Head Richard Crawley Reg Hoare / Katie
of Corporate Affairs Jamie Richards Hunt / Charles Hirst
Ian O'Doherty, CEO
Tim Clancy, CFO
Tel: 0151 653 1700 Tel: 020 3100 2222 Tel: 020 3128 8193
Email: appreciategroup@mhpc.com
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 three 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.
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END
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