Selling employee reward cards and online voucher codes to corporate clients has driven billings growth at Park Group (PARK) during recent years, but newly appointed chief executive Ian O’ Doherty wants to broaden the group’s reach into the consumer market. That means expanding beyond its multi-retailer Christmas savings business to all-year-round savings products – a £2.6bn market in the UK, of which Park commands a lowly 1 per cent share.
Revenue dipped after some low-margin intermediary business was not repeated during the first half. However, that also meant the gross margin picked up, reducing pre-tax losses ahead of management expectations. Overall billings were 3 per cent ahead of the FY2017 half year, led by the consumer business which benefited from earlier dispatches. New customers added to the corporate business include Arcadia Group, TK Maxx and Fat Face, with more than 175 brands accepting Park’s gift vouchers. Management plans to invest further in technology to improve the customer experience, says Mr O’ Doherty, but operational efficiencies already gained will more than offset the associated costs of doing so.
Analysts at house broker Arden Partners expect adjusted pre-tax profits of £13m for the year to March 2019, giving EPS of 5.7p (from £12.6m and 5.5p in 2018).
| PARK GROUP (PARK) | ||||
| ORD PRICE: | 78p | MARKET VALUE: | £145m | |
| TOUCH: | 76.5-79p | 12-MONTH HIGH: | 90p | LOW: 65p |
| DIVIDEND YIELD: | 4% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 4p* | NET CASH: | £35m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 30.6 | -1.9 | -0.84 | 1.00 |
| 2018 | 27.4 | -1.5 | -0.67 | 1.05 |
| % change | -10 | - | - | +5 |
| Ex-div: | 28 Feb | |||
| Payment: | 8 Apr | |||
| *Includes intangible assets of £4.4m, or 2.4p a share | ||||
