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.
H120 results show a resilient performance, in line with management’s expectations for the year, and continued strategic progress. Compared to the prior half-year, billings grew by 10.3% with Corporate benefitting from increased demand and the impact of new clients and Consumer showing good strong progress in the direct channel and faster shipments in Christmas savings. Reflecting billings growth and higher margins, the seasonal pre-tax loss reduced to £1.3m (H118: £1.5m) despite a c £1.0m negative impact of strategic business plan implementation costs. Management still expects a full year net cost of £2.0m. Core operations have been relocated to the group’s new offices in the centre of Liverpool and good progress has been made on rationalising the brand architecture and implementing its technology upgrades. Trials have begun on the new digitally optimised consumer gifting product that will target a new millennial audience, ahead of a planned soft launch before Christmas 2019. Investment costs are dampening current earnings but from FY21 onwards the company targets p&l benefits of £2–5m pa.
The market is estimated at c £6bn by the UK Gift Card & Voucher Association, and is fragmented, providing significant opportunities for growth.