Appreciate Group

LN: APP

£70.1m market cap

37p last close

Appreciate Group is a specialised financial services business and is the UK’s leading provider of multi-retailer redemption products. Consumers can access products directly through its market-leading Christmas Savings offering while corporate customers use these products to supply a range of incentive and reward products.

Investment summary

Appreciate Group’s (APP’s) sales performance continued to improve in the seasonally important Q321 period, driven by continuing strong digital growth. Core underlying billings (excluding Christmas Savings where billings are driven by fulfilment of the annual order book) were up 13.1% compared with Q320 and December was APP’s strongest month ever. Including c £12m of billings in respect of the free summer school meals partnership with Iceland, one-off in nature and low margin, core billings of £166.0m in the first nine months of FY21 are now little changed y-o-y. Management is confident H221 will see the normal swing back to profitability, with the full-year performance at least in line with its expectations that underlay the H121 reinstatement of dividends. Accelerated digitalisation of the business has mitigated the effects of the pandemic, supported the Q321 progress and positions APP well for sustainable growth beyond the current financial year.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2019A 110.4 12.3 12.5 4.8 7.8 10.2
2020A 112.7 11.7 11.4 4.9 7.7 10.2
2021E 93.5 6.0 4.2 1.9 19.8 N/A
2022E 101.0 9.2 7.1 3.1 12.1 26.3
Industry outlook

The market is estimated at c £6bn by the UK Gift Card & Voucher Association, and is fragmented, providing significant opportunities for market share growth.

Last updated on 26/02/2021
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Share price graph
Balance sheet
Forecast net cash (£m) 21.8
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.6) 31.9 (30.7)
Relative* (11.7) 26.8 (31.7)
52-week high/low 56.5p/24.0p
*% relative to local index
Key management
Laura Carstensen Chairman
Ian O'Doherty CEO

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