TIDMAPP
RNS Number : 3607A
Appreciate Group PLC
29 September 2020
29 September 2020
Appreciate Group plc
AGM statement and trading update
Appreciate Group plc (the 'Group'), the UK's leading
multi-retailer redemption product provider to corporate and
consumer markets, is today holding its Annual General Meeting. The
Chairman, Laura Carstensen, will make the following comments on
current trading for the financial year commencing 1 April 2020:
Trading continues to improve
In our Full Year Results on 12 August 2020 we stated that we had
seen trading improve over the period since the start of the new
financial year, seasonally our quietest trading period. This
improvement has been maintained in the months of August and
September, with underlying Corporate and Highstreetvouchers.com
billings down 18 per cent in August versus August 2019. As of 27
September, billings for the month to date were 10 per cent higher
than the same period in 2019. This provides an overall year to date
position of -31 per cent.
April May June July August September* YTD*
Billings -64% -47% -38% -18% -18% +10% -31%
------ ----- ----- ----- ------- ----------- -----
Figures exclude Summer Free School Meals deal with Iceland
*up to 27 September 2020
Redemption rates have seen similar improvements, recovering from
the significant impact when lockdown measures were introduced. Year
to date redemptions to 31 August 2020 are 28% lower than 2019.
As stated in our Full Year Results on 12 August 2020, the Board
reviewed several financial scenarios of the potential impact of
COVID-19 on the business. Total billings remain marginally ahead of
our mid-range scenario, with free cash standing at GBP23.9m as at
27 September 2020.
Our long term growth plans and investment in existing and new
digital products is supported by the additional flexibility from
the five year revolving credit facility (RCF) of GBP15m with
Santander UK that was announced on 10 August 2020. This includes an
additional uncommitted accordion of GBP10m.
Christmas savings
We previously stated that our Christmas Savings business was
around 10% below the prior year and that cancellation rates
remained similar to previous years. This remained the case up to
completion of the 2020 Christmas order book. Our work to fulfil
these orders is now underway and is part of our key Q3 trading
period.
Q3 trading period
At the time of reporting our Full Year Results, we stated that
the Q3 2020 trading period would be critical in our overall
performance of the year due to the seasonal nature of our business.
We have developed robust plans to ensure we can fulfil orders
successfully over this period, whilst ensuring our colleagues are
kept safe from the spread of coronavirus. Although we remain at an
early stage in delivering this work, our approach is on track and
good progress is being made. However we recognise that the external
environment remains challenging and more stringent measures for
coronavirus may have an impact.
Delivering our strategy
We have continued to focus on executing our strategic business
plan, bringing forward initiatives where opportunities exist
following changes in customer behaviour since the pandemic.
Earlier this month we rebranded our B2B business from Love2shop
Business to Appreciate: The home of Love2shop. The new brand
underpins plans for growth in this sector, as highlighted by a
recent increase in new B2B business, which doubled between April
and August 2020, driven largely by companies seeking to reward hard
working colleagues for their efforts during the lockdown. It helps
reposition the business as experts in rewards and recognition,
whilst retaining the well-known Love2shop in its name. It also
aligns more closely with the Group master brand and our purpose of
creating moments of joy in the world.
Expanding redemption partners
We continue to increase the redemption partners we work with and
expand the choice available to customers. Earlier this month we
added Heron Foods to our range of almost 200 retailers, leisure and
experience providers. The discount food and frozen goods provider
offers customers an even greater range of options when it comes to
grocery shopping, alongside existing supermarket partners such as
Asda, Iceland, Morrisons and Sainsburys.
Potential buyer for contract packing
On 12 August 2020 we outlined proposals to cease production of
hampers and contract packing at our site in Birkenhead. Following
recent interest, we are now in discussions to sell the contract
packing business, and if agreement is reached, a deal would
complete during October.
Whilst the sale value of this business would be nominal, it
would reduce the operating costs and potential redundancy costs
associated with this activity and secure employment for some of our
colleagues. A further update will be provided when these
discussions complete.
This sale would exclude the hamper business which, following
completion of the consultation exercise, we will now wind down
before the end of 2020 in line with the proposal set out in
August.
Return to office working
In September we began a pilot with a small number of colleagues
returning to our head office in Liverpool, which had been closed
since lockdown began in March. We have now paused this exercise
following the latest Government guidance. We will use the learnings
to help us plan for a return when it is safe to do so. The majority
of colleagues continue to work seamlessly from home.
Looking ahead
I'm pleased that trading has continued to improve as lockdown
has eased and our continued investment in transformation and
smarter, more efficient ways of working have put us in a better
position to handle the continued uncertainty of COVID-19.
We remain determined to emerge from the crisis in a stronger
competitive position by bringing forward our focus on existing and
new digital products and delivery which we believe will help us
drive growth in the long term.
The experience of the last few months since the initial
lockdown, for all its challenges, has confirmed that we have the
right plan, a great leadership team and exceptionally committed
colleagues and so we go forward with confidence.
- ENDS -
For further information please contact:
END
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
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").
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 2.7 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.
Select Digital 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. Details of
the trust are set out here:
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END
AGMSESFWAESSELU
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September 29, 2020 02:00 ET (06:00 GMT)
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