TIDMPKG
RNS Number : 3977T
Park Group PLC
06 December 2011
PARK GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2011
06 December 2011
Summary Half Year Half Year Year to
to 30.09.11 to 30.09.10 31.03.11
GBP'000 GBP'000 GBP'000
Customer billings 48,583 50,911 297,612
--------------- ------------ ---------
Revenue 46,043 50,911 279,938
Operating (loss)/profit excluding
other operating income (5,228) (4,525) 5,619
(Loss)/profit before taxation (4,396) 541 12,507
(Loss)/profit for the period (3,253) 1,015 9,514
Dividend per share 0.525p 0.50p 1.70p
(Loss)/earnings per share (1.94)p 0.61p 5.76p
Park Group plc (AIM: PKG.L, "Park" or "the Company") is one of
the UK's leading multi-redemption voucher and prepaid gift card
businesses focused on the corporate and consumer markets. Park's
business is generally seasonal and the first half of the year is
traditionally loss making with the bulk of annual revenues and
profit generated in the second half.
Commenting on the results and outlook for the full year, Peter
Johnson, Chairman, said:
"The second half of the year has started well in the corporate
and consumer businesses with orders running ahead of the same time
last year. There is no doubt that the prepaid card and our
application of online technologies is transforming Park and offers
exciting growth opportunities in both existing and new market
areas. The outlook for Park is encouraging; the dividend increase
reflects this confidence. Park is in a strong position and we
anticipate another year of growth."
Summary of key points:
Financial
-- Revenue GBP46.0m (2010: GBP50.9m). Impacted by timing
difference and changes to the way revenue from prepaid
cards is recognised
-- Operating loss excluding other operating income of GBP5.2m
(2010: loss GBP4.5m). Increase due to first time seasonal
cost of Irish operation and full period of flexecash(R)
operating costs
-- 28 per cent uplift in finance income to GBP0.83m (2010:
GBP0.65m)
-- Interim dividend raised 5 per cent to 0.525p per share
(2010: 0.50p)
-- Total cash balances peaked at a record GBP152m (2010:
GBP140m)
Operational
-- Underlying strength of corporate business continuing,
8 per cent rise in customer numbers
-- flexecash(R) prepaid card achieving rapid sales growth
-- Consumer Christmas savings 2011 agents increased to 114,000
(2010: 110,000)
-- Average consumer order value well ahead of last year at
GBP417 (2010: GBP401)
-- Online business growing strongly
Commenting on the consumer business, providing Christmas savings
schemes, Mr Johnson added:
"The consumer business has experienced a busy trading period
with revenue increased to GBP6.7m (2010: GBP5.8m). The level of
orders placed in the first half indicates a strong outturn for the
year. The level of economic activity in the UK and Ireland
inevitably makes consumers cautious about committing themselves
financially. Park's savings business is popular with customers
because it offers them a controlled, disciplined and structured
method of preparing for the festive season by spreading expenditure
over the year. The attractions of Park's long standing Christmas
savings operation is well understood and appreciated by its
thousands of regular users."
Enquiries:
Park Group plc Arden Partners plc Tavistock Communications
Peter Johnson Adrian Trimmings John West
Chris Houghton Jamie Cameron Andrew Dunn
Tel: 0151 653 1700 Tel: 020 7614 5917 Tel: 020 7920 3150
CHAIRMAN'S INTERIM STATEMENT
Park Group has enjoyed another active trading period with sound
performances across all its business divisions. The economic
uncertainty referred to at the time of our annual general meeting
in September remains the back drop against which we have operated
with considerable success for the past three years.
The exciting transformation of our business continues apace,
backed by the rapid growth of our innovative prepaid card
operation, flexecash(R), which is being rolled out across both our
corporate and consumer divisions. Performance was also boosted by
the continued expansion and development of web based trading and
order taking. While conditions may remain difficult for many of our
loyal customers, we are focused on delivering to them the product
quality, value and service that has underpinned our reputation for
many years.
Trading results
The seasonality of Park's operations means that the first half
of the year, although always busy and important in terms of
securing orders, is traditionally loss making, as over 80 per cent
of sales are not dispatched and invoiced until the second half.
Group customer billings in the first six months amounted to
GBP48.6m (2010: GBP50.9m). Revenue on continuing operations for the
six months to 30 September 2011 was GBP46.0m (2010: GBP50.9m).
It is important to note that customers billings differ from
revenue and reflect the flexecash(R) card accounting policy
announced in our results statement of June 2011. Revenue from
prepaid cards is recorded differently to revenue from paper
vouchers and is the margin earned based on customer billings,
recognised when the value loaded on the card has been redeemed.
This policy has no effect on the level of margin contribution or
profit but delays recognition. The reduction in revenue is largely
attributable to activities with a major customer being delayed into
the second half of the year, in addition to the changes to the way
revenue is recognised.
The operating loss in the period before finance income and
taxation was GBP5.2m (2010: loss GBP0.1m). The 2010 operating loss
included a one-off profit of GBP4.4m arising from the settlement of
Park's VAT "Fleming claim". Excluding this one-off profit, the loss
increased by GBP0.7m to GBP5.2m. This reflects the inclusion, for
the first time, of the seasonal loss from our Irish business, which
has now been fully integrated, and the cost of the prepaid card
operation, launched in June 2010, for the full six month
period.
Finance income is a significant element of the Company's
performance and is the interest Park earns on the cash balances it
holds on behalf of customers. Our treasury management remains
careful and cautious in the continuing low interest rate
environment. Interest earned in the period increased by over 28 per
cent to GBP0.83m (2010: GBP0.65m). This reflects the combination of
our conservative approach and improved cash balances, which peaked
at a record GBP152m (2010: GBP140m), strengthening the group's
working capital.
Dividend
The board is pleased to declare an interim dividend of 0.525p
per share (2010: 0.50p) to be paid on 10 April 2012 to shareholders
on the register on 9 March 2012. In June 2011 the final dividend
was increased by 36 per cent to 1.20p, demonstrating the board's
confidence in the growth prospects for Park and the substantial
profit contribution generated in the second half of the year.
Operational review
The corporate business, which supplies Park's incentive and
reward schemes to over 5,000 customers across the GBP4 billion UK
gift card and voucher market, delivered another solid performance.
Revenue in the first half was GBP39.4m (2010: GBP45.1m).
One of our largest customers placed fewer orders than expected
during the period, for delivery in the first half, and this is
reflected in the figure for billings and revenue. This has been
followed by higher than expected orders to date from the same
customer for delivery in the second half of the year. This change
in the timing of orders is not expected to affect the full year's
result, but has had a disproportionate impact on the first half
performance. The underlying progress of the corporate business was
maintained with good growth in customer numbers, ahead by 8 per
cent compared with the same period last year.
The consumer business, which focuses on providing Christmas
savings schemes, experienced a very busy trading period with
revenue increased to GBP6.7m (2010: GBP5.8m). It is worth noting
that it is normal for first half revenue in this seasonal business
to be low, as the vast majority of business is invoiced in the
second half, when customers take delivery of seasonal
purchases.
The level of orders placed in the first half indicates a strong
outturn for the year. The level of economic activity in the UK and
Ireland inevitably makes consumers cautious about committing
themselves financially. Park's savings business is popular with
customers because it offers them a controlled, disciplined and
structured method of preparing for the festive season by spreading
expenditure over the year. The attractions of Park's long standing
Christmas savings operation is well understood and appreciated by
its thousands of regular users.
The number of UK agents trading for Christmas 2011 has increased
to 114,000 from 110,000 last year; customer numbers have increased
to 415,000 from 410,000. Total orders for Christmas 2011 are
substantially completed and are currently 5 per cent above last
year's total. Average customer order values to date have increased
to GBP417 from last year's average of GBP401. Orders for Christmas
2012 are progressing well at this early stage in both the UK and
Ireland. Orders from Irish customers are in line with expectations
and the introduction of our Euro Love2shop voucher has been
successful, with 28 retailers with 500 branches, including many
Irish retail brands, now accepting the voucher.
The rate of growth of flexecash(R), our prepaid card launched
last year, continues to impress and the product is securing
significant new business. Since inception, Park has issued over
550,000 flexecash(R) cards with a total value of over GBP60m
supplying more than 500 corporate customers. The Company is
processing in excess of GBP1m of transactions per day in the run up
to Christmas. A new feature of flexecash(R) is that it can be used
to purchase online retailer vouchers. 19 retailers including
Amazon, Hamleys and Marks & Spencer can be accessed through our
more2you web site.
Our web development continues to drive the business as we
utilise the latest technology to maintain our market leadership and
offer customers ever broader ranges of products and services.
highstreetvouchers.com, our web based gift voucher retailer,
increased sales by an impressive 35 per cent to GBP3.7m (2010:
GBP2.7m) as customers selected this option to purchase vouchers and
gift cards for immediate use. During recent months we have
developed mobile applications that enable us to communicate with
and support our customers using our vouchers and prepaid cards. The
first of these apps was launched in November this year.
Outlook
The second half of the year has started well in the corporate
and consumer businesses, with orders running ahead of the same time
last year. Overall, there is no doubt that the prepaid card and our
application of online technologies is transforming Park's business
and offers exciting growth opportunities in both existing and new
market areas. The outlook for Park is encouraging; the dividend
increase reflects this confidence. Park is in a strong position and
we anticipate another year of growth.
Peter Johnson
Chairman
6 December 2011
PARK GROUP PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE HALF YEAR
TO 30 SEPTEMBER 2011
Notes Half Year Half Year Year to
to 30.09.11 to 30.09.10 31.03.11
GBP'000 GBP'000 GBP'000
Billings 48,583 50,911 297,612
------------- ------------- -----------
Revenue 46,043 50,911 279,938
Cost of sales (46,173) (50,749) (259,819)
------------- ------------- -----------
Gross (loss)/profit (130) 162 20,119
Other operating income - 4,418 5,506
Distribution costs (230) (188) (2,548)
Administrative expenses (4,868) (4,499) (11,952)
Operating (loss)/profit (5,228) (107) 11,125
Finance income 834 649 1,384
Finance costs (2) (1) (2)
(Loss)/profit before taxation (4,396) 541 12,507
Taxation 1,143 474 (2,993)
(Loss)/profit for the period
attributable to equity holders
of the parent (3,253) 1,015 9,514
------------- ------------- -----------
(Loss)/earnings per share 3
- basic (p) (1.94) 0.61 5.76
- adjusted basic (p) (1.94) (1.68) 3.17
- diluted (p) (1.87) 0.61 5.53
- adjusted diluted (p) (1.87) (1.67) 3.05
All activities derive from continuing operations.
PARK GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
HALF YEAR TO 30 SEPTEMBER 2011
Half Year Half Year Year to
to 30.09.11 to 30.09.10 31.03.11
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (3,253) 1,015 9,514
------------- ------------- -----------
Other comprehensive income:
Actuarial losses on defined benefit
pension plans - - (235)
Deferred tax on actuarial losses on
defined benefit pension plans - - 61
------------- ------------- -----------
Other comprehensive income for the
period, net of tax - - (174)
------------- ------------- -----------
Total comprehensive income for the
period (3,253) 1,015 9,340
------------- ------------- -----------
PARK GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT
30 SEPTEMBER 2011
As at As at As at
30.09.11 30.09.10 31.03.11
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 1,407 1,452 1,407
Other intangible assets 4,285 3,443 4,519
Investments 2 2 2
Investment property 259 265 262
Property, plant and equipment 9,054 3,855 8,873
Trade and other receivables 1,177 - 1,543
Deferred tax assets 422 465 422
16,606 9,482 17,028
----------------- ------------- ---------
Current assets
Inventories 11,636 11,098 1,325
Trade and other receivables 10,473 10,846 6,587
Tax receivable - 65 -
Cash and cash equivalents 3,242 11,258 6,808
Monies held in trust 119,498 102,191 39,607
Assets held for sale - 725 -
144,849 136,183 54,327
----------------- ------------- ---------
Total assets 161,455 145,665 71,355
----------------- ------------- ---------
Liabilities
Current liabilities
Trade and other payables (150,066) (136,580) (52,123)
Tax payable (103) - (2,066)
Provisions (34,457) (35,181) (34,063)
(184,626) (171,761) (88,252)
----------------- ------------- ---------
Non-current liabilities
Retirement benefit obligation (3,556) (3,721) (3,821)
(3,556) (3,721) (3,821)
----------------- ------------- ---------
Total liabilities (188,182) (175,482) (92,073)
----------------- ------------- ---------
Net liabilities (26,727) (29,817) (20,718)
----------------- ------------- ---------
Equity attributable to equity
holders of the parent
Share capital 3,361 3,301 3,361
Share premium account 1,638 1,070 1,638
Retained earnings (31,726) (34,188) (25,717)
Total equity (26,727) (29,817) (20,718)
----------------- ------------- ---------
PARK GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Retained Total
capital Share premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2011 3,361 1,638 (25,717) (20,718)
Total comprehensive income for
the period
Loss - - (3,253) (3,253)
Total comprehensive income for
the period - - (3,253) (3,253)
--------- -------------- ---------- ---------
Transactions with owners, recorded
directly in equity
Equity settled share-based payment
transactions - - 100 100
Dividends - - (2,856) (2,856)
--------- -------------- ---------- ---------
Total contributions by and distribution
to owners - - (2,756) (2,756)
--------- -------------- ---------- ---------
At 30 September 2011 3,361 1,638 (31,726) (26,727)
------- ------ --------- ---------
At 1 April 2010 3,301 1,070 (33,769) (29,398)
Total comprehensive income for
the period
Profit - - 1,015 1,015
Total comprehensive income for
the period - - 1,015 1,015
-------- ------ --------- ---------
Transactions with owners, recorded
directly in equity
Equity settled share-based payment
transactions - - 20 20
Dividends - - (1,454) (1,454)
----- ---- -------- --------
Total contributions by and distribution
to owners - - (1,434) (1,434)
----- ---- -------- --------
At 30 September 2010 3,301 1,070 (34,188) (29,817)
------- ------ --------- ---------
At 1 April 2010 3,301 1,070 (33,769) (29,398)
Total comprehensive income for
the period
Profit - - 9,514 9,514
Other comprehensive income
Actuarial losses on defined benefit
pension plans - - (235) (235)
Tax on other comprehensive income - - 61 61
Total other comprehensive income - - (174) (174)
------ ------ --------- ---------
Total comprehensive income for
the period - - 9,340 9,340
---- ---- -------- --------
Transactions with owners, recorded
directly in equity
Equity settled share-based payment
transactions - - 165 165
Share options exercised 60 568 - 628
Dividends - - (1,453) (1,453)
---- ---- -------- --------
Total contributions by and distribution
to owners 60 568 (1,288) (660)
---- ---- -------- --------
At 31 March 2011 3,361 1,638 (25,717) (20,718)
------ ------ --------- ---------
PARK GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEAR TO 30 SEPTEMBER 2011
Year to
Half Year Half Year 31.03.11
to 30.09.11 to 30.09.10
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash used in operations (762) (2,979) (485)
Interest received 556 240 970
Interest paid (2) (1) (2)
Tax paid (820) (115) (1,347)
Net cash used in operating activities (1,028) (2,855) (864)
------------- ------------- -----------
Cash flows from investing activities
Proceeds from sale of assets held
for sale 235 - 10
Purchase of other intangible assets (206) (210) (1,518)
Purchase of property, plant and equipment (463) (235) (5,474)
Net cash used in investing activities (434) (445) (6,982)
------------- ------------- -----------
Cash flows from financing activities
Net proceeds from issue of ordinary
share capital - - 628
Dividends paid to shareholders (2,104) (921) (1,453)
Net cash used in financing activities (2,104) (921) (825)
------------- ------------- -----------
Net decrease in cash and cash equivalents (3,566) (4,221) (8,671)
------------- ------------- -----------
Cash and cash equivalents at beginning
of period 6,808 15,479 15,479
------------- ------------- -----------
Cash and cash equivalents at end
of period 3,242 11,258 6,808
------------- ------------- -----------
Cash and cash equivalents comprise:
Cash 3,242 11,258 6,808
------------- ------------- -----------
PARK GROUP PLC
UNAUDITED SEGMENTAL REPORTING FOR THE HALF YEAR TO 30 SEPTEMBER
2011
Half Year Half Year Year to
to 30.09.11 to 30.09.10 31.03.11
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue
Consumer 6,681 5,820 168,416
Corporate 39,362 45,091 111,522
External revenue 46,043 50,911 279,938
Consumer - - -
Corporate 5,452 4,401 136,300
Elimination (5,452) (4,401) (136,300)
Inter-segment revenue - - -
Consumer 6,681 5,820 168,416
Corporate 44,814 49,492 247,822
Elimination (5,452) (4,401) (136,300)
Total revenue 46,043 50,911 279,938
Results
Consumer (3,758) (3,165) 4,470
Consumer - other operating income - 4,490 4,416
Corporate (749) (519) 3,934
All other segments (721) (841) (2,785)
All other segments - other operating
income - (72) 1,090
(Loss)/profit before interest (5,228) (107) 11,125
NOTES TO THE ACCOUNTS
(1) Basis of preparation
The financial information in this interim report has been
prepared in accordance with the International Financial Reporting
Standards as adopted by the EU and the AIM rules of the London
Stock Exchange and on the basis of the accounting policies
described in Park Group plc's annual report & accounts for the
year ended 31 March 2011. These accounting policies have been based
on the current standards and interpretations expected to be
effective at 31 March 2012. The group does not expect there to be a
significant impact on the results from standards, amendments or
interpretations which are available for early adoption but which
have not yet been adopted.
The financial statements have been prepared under the historical
cost convention, as modified by the accounting for financial
instruments at fair value. In addition this interim financial
report does not comply with IAS34 Interim Financial Reporting,
which is not currently required to be applied under AIM rules.
The directors are of the opinion that the financial information
should be prepared on a going concern basis, in the light of
current trading and the forecast positive cash balances for the
foreseeable future.
The financial information included in this interim financial
report for the six months ended 30 September 2011 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006 and is unaudited. A copy of the group's
statutory accounts for the year ended 31 March 2011, on which the
auditors gave an unqualified opinion and did not make a statement
under section 498 of the Companies Act 2006, has been filed with
the registrar of companies.
(2) Taxation
The taxation credit for the six months to 30 September 2011 has
been calculated using an overall effective tax rate of 26.0 per
cent which has been applied to the taxable income (half year to 30
September 2010 - 29.0 per cent).
(3) Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares.
Adjusted earnings per share is calculated by dividing the
earnings attributable to ordinary shareholders, before taking into
account other operating income, by the appropriate number of shares
as detailed above for both basic and diluted calculations.
The calculation of basic and diluted earnings per share is based
on the following figures:
Half year Half year Year
to 30.09.11 to 30.09.10 to 31.03.11
GBP'000 GBP'000 GBP'000
(Loss)/earnings
(Loss)/earnings before other operating
income (3,253) (2,770) 5,244
Other operating income - 3,785 4,270
------------- ------------- -------------
Total (loss)/earnings for period (3,253) 1,015 9,514
------------- ------------- -------------
Half year Half year Year to 31.03.11
to 30.09.11 to 30.09.10
Weighted average number of shares
Basic eps - weighted average number
of shares 168,030,990 165,064,410 165,251,345
Diluting effect of employee share
options 6,314,457 598,616 6,889,894
------------- ------------- -----------------
Diluted eps - weighted average
number of shares 174,345,447 165,663,026 172,141,239
------------- ------------- -----------------
Half year Half year Year to
to 30.09.11 to 30.09.10 31.03.11
Basic (loss)/earnings per share
Weighted average number of shares
in issue 168,030,990 165,064,410 165,251,345
Total (p) (1.94) 0.61 5.76
------------- ------------- ------------
Half year Half year Year to
to 30.09.11 to 30.09.10 31.03.11
Diluted (loss)/earnings per share
Weighted average number of shares
in issue 174,345,447 165,663,026 172,141,239
Total (p) (1.87) 0.61 5.53
------------- ------------- ------------
Adjusted earnings per share
Half year Half year Year to
to 30.09.11 to 30.09.10 31.03.11
Basic (loss)/earnings per share
Weighted average number of shares
in issue 168,030,990 165,064,410 165,251,345
Total (p) (1.94) (1.68) 3.17
------------- ------------- ------------
Half year Half year Year to
to 30.09.11 to 30.09.10 31.03.11
Diluted (loss)/earnings per share
Weighted average number of shares
in issue 174,345,447 165,663,026 172,141,239
Total (p) (1.87) (1.67) 3.05
------------- ------------- ------------
(4) Prior period customer billings
The difference between the prior period revenue as stated in the
interim report for September 2010, and the revenue after applying
the updated revenue recognition policy, is immaterial. Therefore no
adjustment has been made.
(5) Reconciliation of net (loss)/profit to net cash outflow from
operating activities
Half year Half year Year
to 30.09.11 to 30.09.10 to 31.03.11
GBP'000 GBP'000 GBP'000
Net (loss)/profit (3,253) 1,015 9,514
Adjustments for:
Tax (1,143) (474) 2,993
Interest income (834) (649) (1,384)
Interest expense 2 1 2
Depreciation and amortisation 724 476 932
Impairment of goodwill - - 45
Profit on sale of assets
held for sale - - (1,090)
Increase in inventories (10,311) (10,220) (447)
Increase in trade and
other receivables (3,476) (5,536) (1,011)
Increase in trade and
other payables 97,191 88,262 4,339
Increase in provisions 394 4,988 3,870
Increase in monies held
in trust (79,891) (80,734) (18,150)
Decrease in retirement
benefit obligation (265) (128) (263)
Share-based payments 100 20 165
Net cash outflow from
operating activities (762) (2,979) (485)
------------- ------------- -------------
(6) Approval
This statement was approved by the board on 5 December 2011.
(7) Reports
A copy of this announcement will be available on the Company's
website from today www.parkgroup.co.uk and will be mailed to
shareholders on 10 January 2012. Copies will also be available for
members of the public at the Company's registered office - Valley
Road, Birkenhead CH41 7ED and also at the offices of the Company's
registrars, Computershare Investor Services PLC, P O Box 82, The
Pavilions, Bridgwater Road, Bristol BS99 7NH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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