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Park's corporate profit overtakes consumer

The savings and rewards specialist's corporate business led the way last year
June 14, 2017

For a company that started life as a 'Christmas hamper' savings scheme, and has grown into a digital rewards specialist, you can imagine product development has been a crucial part of Park Group's (PKG) strategy. A focus on technological development meant over 90 per cent of orders were placed online last year, up from just 10 per cent in 2008. Overall customer billings grew 5 per cent to £405m during the 12 months to March 2017.

IC TIP: Buy at 79p

The corporate business - companies buying gift cards and vouchers for employees - put in the stronger performance, increasing customer billings by 6 per cent to £188m. Companies including Akzo Nobel, Scottish Power and EDF were added to its client list in the period. Since its June launch the Evolve digital reward platform, which can offer digital reward codes to clients' customers or employees, has signed up 165 companies, and post-period end was rolled out internationally. Operating profits increased by a fifth to £7.2m.

The consumer business became a licensed issuer of MasterCard products, launching the Your Choice card, which allows customers to make purchases from any retailer, not just those that accept Park's Love2shop brand. But increased investment in new products, plus higher voucher print costs, meant operating profits fell by 5 per cent to £6.5m.

Analysts at house broker Arden Partners expect adjusted pre-tax profits of £13.2m during the 12 months to March 2018, giving EPS of 5.6p (up from £12.4m and 5.3p in FY2017).

PARK GROUP (PKG)

ORD PRICE:79pMARKET VALUE:£146m
TOUCH:79-81p12-MONTH HIGH:88pLOW: 59p
DIVIDEND YIELD:3.7%PE RATIO:15
NET ASSET VALUE:7p*NET CASH:£31m

Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20132799.54.62.1
20142709.44.22.3
201529310.94.72.4
201630311.95.32.75
201731112.45.42.9
% change+3+4+2+5

Ex-div: 24 Aug

Payment: 2 Oct

*Includes intangible assets of £5m, or 3p a share