Preliminary results/media/Files/A/Appreciate-Grou… · Analyst and investor presentation. 2 Ian...
Transcript of Preliminary results/media/Files/A/Appreciate-Grou… · Analyst and investor presentation. 2 Ian...
Preliminary results12th August 2020
Analyst and investor presentation
2
Ian O’DohertyChief Executive Officer
Tim ClancyChief Financial Officer
Full Year Results August 2020
FullYear Highlights
1
4
Valley Road site sold
Providing operational flexibility
and £3.2m cash
Bank financing in place
Allowing greater focus on
digital and higher margin
growth
Hamper production ceasing
£15m RCF completed with
Santander
Enabling growth of higher margin
regulatory products
Broader talentpool
Attracting people with the
right skills for our business
Widened geographical
spread of joiners
Efficiency improvements
Digital acceleration
New Digital offerings
Continued move away from
paper in product mix - down
6.5%
New Enterprise Resource
Planning system
Moved offices to Chapel
Street
Important progress on our strategic journey
Full Year Results August 2020
ResponseImpact
Covid-19 Impact and response
• Prioritised safety of colleagues
• Closed all operations at lockdown
• Accelerated focus on digital capability
• Switched 80% of colleagues seamlessly to remote working
• Utilised Government Coronavirus Job Retention scheme for an average of 65 colleagues (c£300k total)
• Gradually reinstated physical dispatch from May with social distancing applied
5 Full Year Results August 2020
• Last month of FY20 hit, after trading well prior to lockdown
• Total underlying billings dropped but have started to recover
• *Benefitted from deal with Iceland – when included June -35%, July +41%, YTD -25%
• Redemption rates down 39% YTD (-54% physical/+169% online)
• Christmas Savers order book in line with expectations
Current status
• Uncertainty around Q3 trading (peak quarter)
• Increased operational risk
• Social distancing constraints
• Winding down of Hamper business
• Potential second wave, local lockdowns, etc.
• Unknown impact of economic downturn
• Plans in place to deliver season successfully
Financial actions
• Securing of £15m revolving credit facility
• Revisions to remuneration and preservation of cash
• Scenarios analysis of the potential pandemic impacts
• Cancellation of dividend
• Short-term uncertainty drives prudence
• Commitment to dividend policy
April 20 May 20 June 20 July 20 YTD
-64% -47% -38%* -18%* -41%*
6
Revenue
£112.7m+2.1%
Growth of third party product
reported gross in revenue
Billings
£419.9m-1.6%
Higher gross margin offset by
increase in administration costs
Adjusted PBT
£11.4m-£1.3m
Strong Corporate demand but
reduced Christmas Savers
Profit Before Tax
£7.7m£11.3m in 2019
Adjusted EPS
4.93p
Cash
£132.3m2019: £134.0m
Includes cash held in trust, as of
March 31 2020
Free cash £29.6m (2019:
£36.9m)
2019: 5.43p
9.2% down on 2019
Resilient performance as we implement our strategy
Full Year Results August 2020
7
Corporate operational highlights (vs. last year)
+1.5% Increased demand
Addition of new clients
Improved product mixBillings £197.7m(2019 £194.8m)
-2.4%
Revenue £50.3m(2019 £51.5m)
Full Year Results August 2020
8
Consumer operational highlights (vs. last year)
-4.3%Increased and better mix
of direct customers
Improved product mix
Traction with digital
products
Billings £222.2m(2019 £232.1m)
+5.9%
Revenue £62.4m(2019 £58.9m)
Full Year Results August 2020
2
Results
For the year to31 March 2020
10
Profit Statement
• Billings down 1.6% due to lower Xmas Savers billings (£9m)
and lockdown impact on March (£2m) offset by Corporate
growth (£3m)
• Revenue increased by 2.1% due to higher mix of third party
products which are reported gross in revenue
• Gross profit increased from 28.4% to 29.2% due to improved
mix of higher margin card and digital
• Administration costs increased due to non-recurring strategy
implementation costs of £1.5m (relocation/rebranding)
• Finance income reduced due to yield reduction from 0.93% to
0.87% and reduced total cash in the Xmas Savers trust
• Exceptional items due to impairment of assets
Full Year Results August 2020
Profit Statement £m 2019/20 2018/19 Var
Billings 419.9 426.9 -7.0
Revenue 112.7 110.4 2.3
Gross Profit 32.9 31.3 1.6
Distribution Costs -2.8 -2.9 0.1
Administration Costs -20.0 -17.4 -2.6
Operating Profit before exceptional items 10.1 10.9 -0.8
Finance Income 1.3 1.6 -0.3
Exceptional Items -3.7 -1.2 -2.5
Profit before taxation 7.7 11.4 -3.7
Earnings per share
- basic 2.96p 4.78p
- diluted 2.96p 4.77p
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Reconciliation of reported to adjusted profit
Full Year Results August 2020
Adjusted profit £m 2019/20 2018/19 Var
Profit before taxation 7.7 11.3 -3.6
Add back exceptional costs:
Impairment of property, plant, equipment 0.2 1.2 -1.0
Impairment of assets held for sale 1.7 0.0 1.7
Impairment of goodwill 1.3 0.0 1.3
Impairment of obsolete stock 0.1 0.0 0.1
Redundancy costs 0.4 0.0 0.4
Adjusted Profit 11.4 12.5 -1.1
• The previous head office at Valley Rd, Birkenhead has been
impaired and transferred to ‘Assets held for Sale’ reflecting
the year end disposal prospects. This has now been sold
• Impairment of goodwill relates to our brand engagement
agency, FMI, following a review of this business including
the impact of Covid-19 and Hamper customer lists as we
are proposing closure of this part of the business
• Impairment of obsolete stock relates to the write down of
hamper and merchandise stock, also due to the closing of
this part of the business
• Redundancy costs relate to the marketing department
where employees were made redundant following a
restructure with the aim of creating greater focus on
digital marketing
Comparison of billings and revenue
12 Full Year Results August 2020
Total Billings 2019/20 2018/19 Var %
£m
Multi Retailer 354.3 362.4 -2.2%
Single Store 52.9 50.8 4.2%
Other Income 12.7 13.7 -7.3%
Total £m 419.9 426.9 -1.6%
Mix %
Multi Retailer 84.4% 84.9% -0.5%
Single Store 12.6% 11.9% 0.7%
Other Income 3.0% 3.2% -0.2%
Total Revenue 2019/20 2018/19 Var %
£m
Multi Retailer 37.9 41.1 -7.8%
Single Store 62.1 55.6 11.7%
Other Income 12.7 13.7 -7.3%
Total £m 112.7 110.4 2.1%
Mix %
Multi Retailer 33.6% 37.2% -3.6%
Single Store 55.1% 50.4% 4.7%
Other Income 11.3% 12.4% -1.1%
• Multi retailer billings remain the majority of billings
(84.4%)
• Growth in single store (third party) billings due to VAT
treatment versus last year (+£4.9m)
• Overall revenue increase of 2.1% versus last year due to
growth in single store product which is reported gross in
revenue
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Segmental Performance
Consumer• Increase in Xmas Savers direct customers of 5%• Continued decline of Agency Xmas Savers of 10%• Increased revenue due to a higher mix of third party product• Reduced profitability due to higher administration and
exceptional costs
Corporate• Growth due to £7.5m of new business, continuing good
retention rates (95%) of existing clients and strong online billings which were 13% higher than prior year
• Reduced revenue due to a higher mix of card and digital with more deferred revenue
• Reduced profitability due to higher administration and exceptional costs
Full Year Results August 2020
Consumer 2019/20 2018/19 Var %
£m
Billings 222.2 232.1 -4.3%
Revenue 62.4 58.9 5.9%
Profit 5.3 6.8 -22.1%
Customer Numbers (000's)
Xmas Savers 396 428 -7.4%
Other Consumer 132 133 -1.0%
Total Consumer 528 561 -5.9%
Corporate
£m
Billings 197.7 194.8 1.5%
Revenue 50.3 51.5 -2.3%
Profit 6.6 7.8 -15.4%
Client Numbers (000's) 42 37 13.3%
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Billings by market
• Xmas Savers down due to reduced agency billings offset
by increased direct customers
• Other consumers down due to systems limitations in Q3
impacting on HSV volumes
• Customer incentives billings +12.5% due to new clients
• Staff rewards billings +9.9% due to new clients
• Employee benefits billings reduced due to credit and
systems issues
• Intermediaries reduced due to move towards direct
relationships with clients
Note:
Redemption products only, excludes other income
Full Year Results August 2020
Market Billings £m 2019/20 2018/19 Var %
£m
Xmas Savers 204.8 213.6 -4.1%
Other Consumer 8.4 8.6 -2.6%
Customer Incentives 45.3 40.2 12.5%
Staff Rewards 82.8 75.3 9.9%
Employee Benefits 17.2 20.8 -17.4%
Intermediaries 48.0 54.7 -12.2%
Total £m 406.4 413.2 -1.6%
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Billings by format
Note:
Redemption products only, excludes other income
Format 2019/20 2018/19 Var %
£m
Paper 170.2 200.0 -14.9%
Card 218.4 197.1 10.8%
Digital 17.7 16.1 10.3%
Total 406.4 413.2 -1.7%
Mix %
Paper 41.9% 48.4% -6.5%pts
Card 53.7% 47.7% +6.0%pts
Digital 4.4% 3.9% +0.5%pts
Full Year Results August 2020
• Continuing decline in paper products
• Card has overtaken paper for the first time
• Digital billings increase of 10.3%
• Card and digital growth requires e-monies trust funding
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Balance Sheet• IFRS 16 adoption: Creation of a ‘Right of use asset’ in non-
current assets of £3.8m and a corresponding lease liability
in both current and non-current liabilities. This relates
primarily to the lease for our new office in Liverpool
• Transfer of the NBV of the Valley Road site (£3.2m) from
non-current assets to current assets; classified as an ‘Asset
held for Sale’ reflecting its disposal prospects. This has now
been sold
• Current assets are lower than prior year due to decreases
in stock (£1.7m) and trade debtors (£3.4m)
• Cash lower than prior year due to more monies held in
trust due to card/digital growth
• Provisions reduction due to the paper voucher provision
reducing from £36.2m to £30.2m as business mix continues
to move from paper to card/digital
Full Year Results August 2020
Balance Sheet £m 2019/20 2018/19
Non Current Assets 12.4 12.6
Right of Use Asset 3.8 0.0
Current Assets 12.6 17.4
Assets held for Sale 3.2 0.0
Money held in Trust 102.7 99.3
Cash 29.6 36.9
Total Assets 164.3 166.1
Trade and other payables -86.9 -90.5
Provisions -53.8 -58.3
Non Current Liabilities -5.2 -0.6
Net Assets 18.3 16.7
Share Capital 3.7 3.7
Share Premium 6.5 6.5
Retained Earnings 8.5 6.8
Other Reserves -0.3 -0.3
Total Equity 18.3 16.7
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Cash Flow
• Movements to trusts due to £7.6m increase in e-monies
trust and £1.6m increase in Corporate schemes due to the
increase in regulated business. These were offset by a
£5.7m reduction in Xmas Savers due to a lower order book
• Capex spend due to new office fit-out (£1.6m), new ERP
(£2.0m) and new digital capability (£0.6m)
Full Year Results August 2020
Cashflow Statement £m 2019/20 2018/19
EBITDA 11.1 12.4
Movements from/(to) trusts -3.4 -12.3
Working Capital Movements -0.8 6.8
Cash generated from/(used in) operations 6.9 6.9
Interest received/(paid) 1.6 1.5
Tax paid -2.9 -1.6
Capital Expenditure -5.0 -1.2
Payment of lease liabilities 0.4 0.0
Proceeds of exercise of share options 0.0 0.3
Dividends paid to shareholders -6.0 -5.7
Net (decrease)/increase in cash and cash equivalents -4.9 0.3
Opening Cash 34.6 34.2
Closing Cash 29.6 34.6
Growth of digital products is shifting cash to the e-monies trust
18 Full Year Results August 2020
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Act 2017/18 Act 2018/19 Act 2019/20
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Free Cash £m
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Growth in trust requirements
Bank financing is in place to enable growth of higher margin regulated products
19 Full Year Results August 2020
(£40)
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Free Cash 2019/20 £m
Voucher Provision 2019/20 Cash available in trust
Free cash 2019/20 Cash exc paper benefit
The business benefits from the unregulated status of paper but this benefit is reducing as the product mix moves to card and digital
Without this benefit there would be negative cash so financing is in place to allow us to continue to grow regulated products. We have agreed a 5 year unsecured RCF with Santander of £15m plus a £10m accordion.
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Paper Voucher Provision £m
Voucher Provision 2017/18 Voucher Provision 2018/19 Voucher Provision 2019/20
20 Full Year Results August 2020
Summary & Outlook
Significant impact on first half of new financial year
• A resilient performance in FY20 as we build a platform for growth
• Limited impact of Covid-19 on the results for last year
• FY21 first half loss likely to be significantly increased on prior year due to Covid-19
• Recovery in monthly performance but too early to assess the impact on the business
• Guidance to be provided once we understand the peak Q3 trading performance
• Group retains positive free cash during FY21 in a range of Covid-19 financial scenarios
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Our strategic journey
Building a robust, scalableplatform on which to drive growth
Experience
We will be easier to work with for all our customers
Clarity
We will align all our efforts with clarity and focusAppeal
We will broaden our customer appeal to drive growth
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Implementing our strategic business plan
Full Year Results August 2020
Productivity
We will be more efficient and effective
Infrastructure Investment
Full Year Results August 202023
ERP Implementation
• Integrates Content Management, Enterprise Resource Planning, Customer Relationship Management, and Business Intelligence
• Replaces 20 year old legacy infrastructure running
• Industry leading Enterprise Resource Planning solution using Microsoft Dynamics 365
Resilience and Security
• Creation of a full Security Operations Centre for monitoring and response
• Risk management using National Cyber Security Centre principles
• QSA Certified; ISO 27001 compliant
• Embedded DevSecOps approach
Cloud Deployment
• Infrastructure Cloud migration - removes legacy hardware and vulnerabilities
• Significant physical footprint reduction
• Multi-cloud/hybrid deployment -performance elasticity and resilience
• Autonomous Cloud Data Warehouse - fast, efficient, scalable, cost-effective
Improved reliability
effectiveness and efficiencyImproved business continuity
More flexible, cost-effective
and better data management
Attracting talent
• 37% of new colleagues reside outside the immediate area – up from 1 in 5 pre Feb 2019
• Broader talent catchment - we’re now competing for skills in areas richer pools exist
• Two thirds have blue-chip experience – and joining from relevant sectors, e.g. financial servicesContinued to fill key positions during lockdown
Workplace Transformation
24 Full Year Results August 2020
Cultural transformation
• New practices and workflow have led to increased collaboration
• 90% colleagues proud to work for organisation
• Seamless transition to lockdown ways of working -team able to pivot to Digital
• Covid-19 impact would have been disastrous for our business if it had hit before investments
Commutable area (by car) within 1 hour of Chapel Street
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Digital Focus
• Transition to digital capability accelerated, with focus on virtual products and delivery intensified during lockdown
• New e-gift cards and e-codes added to HSV and Love2Shop Business, including brands attractive to during lockdown - Just Eat, Xbox, Spotify
• Online redemptions up 169% from start of new financial year
• Corporate onboarding process reduced from 47days average to under 4 days
• Pilots of Select Digital Gift Card and Giftli have provided valuable insights for future propositions
• Contactless-enabled Digital Gift Card is being made available to corporate clients
• Partnership with Iceland expanded to provide access to the Department of Education free school meals national voucher scheme
Full Year Results August 2020
Positive signs since lockdown
Full Year Results - August 202026
Great progress in the last financial year
• Multi redemption card and e-code billings exceeded voucher billings for the first time ever.
• Digital redemptions more than doubled to £9.7m
• More focused product offering
Acceleration since financial year end
• Multi redemption billings represent 91.4% of total billings - an increase of 6.1%
• Digital billings have tripled to £18m
• Digital redemptions increased further - growing by 135%
November 19 December 19 January 20 February 20 March 20 April 20 May 20 June 20 July 20 August 20
Many key strategic business plan milestones delivered
Name Change
Valley Road Site Sale
Christmas Savings 2020 TV Ad
ERP Replacement Project
Ongoing Transformation Programme
Customer Experience Improvements
Full Year Results - August 202027
Plans revised
Milestone completed
Bank Financing
Hamper business review
Select Digital Gift Card - launched
Giftli – Pilot
Acceleration of digital product sales
28
Lockdown has accelerated the
market migration to digital and
we have responded accordingly
Summary: Bedrock for future growth opportunities
Investments in infrastructure and
culture have made it possible to
survive the current challenges
Platform is more robust and
scalable, with growth
opportunities
Full Year Results August 2020
Key dates coming up• 29 September AGM and Trading Update• 24 November Half Year Results
29 Full Year Results August 2020
5
AppendixBackground to
Appreciate Group
Investor Highlights
31
• Profitable with strong visibility of earnings and cash held in trust.Robust
financials
• Experienced management team with a clear strategy to drive growth and demonstrated decisive action through the impact of Covid-19.
Managementteam
• Clear market leader in Christmas savings clubs. Holds a clear proposition for the Corporate and Gifting spaces, where there is significant market share growth opportunity.
Strong market position
• Diversified customer base of more than 400,000 clients split across both B2C and B2B markets with no concentration in any particular end sector.
Customerbase
• The multi-retailer product offering is underpinned by relationships with more than 200 redemption partners. Multi-retailer offerings provide the end users with protection against interruption or failure in any particular brand/chain.
Multi-retailer product
• The funding requirement results from the seasonal nature of the business and its working capital dynamics as the business grows, increasing as more cash is retained in trust and decreasing as cash is released to retailers and Appreciate Group
Funding need driven by growth
• Major investment in infrastructure and product development delivered, in line with strategic plan. Well placed for digital growth which is expected to continue in the market.
Wellinvested
Full Year Results August 2020
Appreciate Group plc timeline
Rich heritage of more than 50 years
32
Changes to come:
1967 1989 1996 2002 2007 2013 2014 2016 2018 2020+
1969
Park Hamper
Company
incorporated
1982
High Street
Vouchers formed
2010
Flexecash
system and
prepaid cards
launched
2002
High Street
Vouchers re-
branded to
Love2shop
1967
Peter
Johnson
founded Park
Group
2018
New management
team appointed and
strategy launched,
focusing on digital
2013
Love2shop
Voucher and
Card sales top
£300 Million
2019
Relocation and
name change to
Appreciate Group
plc
2003
B2B
division
launched
1996
High Street
Vouchers
sales exceed
£100 Million
1998
Company name
changed to
Park Group
2016
Peter Johnson
retires as non-
executive
chairman
2010
Launch of ROI
savings and
Love2shop
Vouchers
Growth through focus on digital products
1989
1 million
hampers
sold
2015
Love2shop
Voucher and
Card sales top
£350 Million
2010
2007
Set up of
voluntary Xmas
Savers trust
2007
Listed on
AIM
Full Year Results August 2020
373 385
405 413 427 420
300
400
500
FY15A FY16A FY17A FY18A FY19A FY20A
Billings £m
Billings
10.1
11.9 11.912.8 12.4
11.4
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
FY15A FY16A FY17A FY18A FY19A FY20A
PBT £m
PBT
Appreciate Group at a glanceAppreciate Group plc (“the Company”) is a leading UK and ROI prepayment, gifting and engagement company servicing both the Corporate and Consumer markets. The Company sells redemptions products (e.g. gift cards and vouchers) which are used by Consumers for Christmas budgeting and year-round gifting, and by Corporates for staff incentives and rewards.
33
Established 1967 in Birkenhead, UK, initially providing a Christmas Savings and
Hamper club in the locality.
In 2020, Appreciate Group plc:
• is a leading brand in multi-retailer redemption products, including gift cards,
prepaid cards and vouchers
• Is AIM listed
• generates billings of over £400m
• has 320 employees
• has over 350,000 families using our Christmas Savers services, and in excess
of 40,000 business clients with an estimated 2m employees
Summary financial performance
The business is split into 2 divisions:
Corporate
• Broad client base of over 40,000 businesses generated through a sales force and online self service portal
Consumer
• Christmas Savers business with 350,000 savers and c. £200m of billings.
• Other consumers with over 100,000 customers gifting through highstreetvouchers.com
41.9%
53.8%
4.4%
Product Mix FY20
Paper Card Digital
Full Year Results August 2020
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100.0
200.0
300.0
400.0
500.0
FY18A FY19A FY20A
£m
Division billings split
Consumer Corporate
Financial Year (£m) FY18A FY19A FY20A
Billings 412.8 426.9 419.9
Revenue 111.1 110.4 112.7
Gross profit 31.4 31.3 32.9
Gross profit margin % 28.3% 28.3% 29.2%
Operating Profit 11.5 10.9 10.1
PBT 12.6 11.3 7.7
PBT % 11.3% 10.2% 6.8%
Customer numbers (000's) 548.5 553.6 521.9
Clients numbers (000's) 34.6 37.2 42.2
Market Share
34
Appreciate’s market share overlaid within key market segments
*Source: estimates based on UK Gift Card and Voucher Association data
Incentives –£0.8bn6.9% Market Share
Employee Benefits –£1bn3.3% Market Share
Staff Rewards –£1.4bn6.7% Market Share
Other Consumers –£3.4bn0.2% Market Share (Not shown on chart)
Christmas Savings –£0.3bn71% Market Share
Inner Circle – UK
Market
Outer Circle –
Appreciate
Market Share
£6.9bn market
We have a good position in Corporate markets which are predicted to grow by 50% in the next 5 years. We have low penetration in theother consumer market which presents an opportunity to grow.
Corporate marketsConsumer marketsEstimated to increase by 50% during the next five years from 3.3bn to 5.0bn *Source UKGCVA data
Full Year Results August 2020
Competition
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• Argos for Business
• John Lewis for Business
• M&S Corporate Gifts
• Amazon incentives
• Tesco Corporate Gift Cards
RetailersRetailers have established B2B
offerings, but are limited to single
store
Multi-retailer OfferingsDirect competitors offering a
portfolio of redeemers (physical &
digital)
IntermediariesResell products from third-parties
aiming to be a one-stop shop
• One4All (Blackhawk)
• Compliments Card (Edenred)
• Spree Card (Sodexo benefits & rewards)
• SVM Cards (Blackhawk)
• Tillo (was Reward Cloud)
• Hemingways
• WeGift – instant incentives
• Variety
Full Year Results August 2020
Products and services
The Company provides a broad range of products including prepayment, gifting and engagement options
36
Gifting
Helping consumers convert their kind
thoughts into joyful gifts
Helping businesses attract & retain employees & customers.
B2C B2B
Prepayment
Helping consumers put money aside to ensure they can pay for
key events
Engagement
GetPark.co.uk
Prepaid instrument that can be redeemed from a curated group of partners: from high street & online retailers to experiences
Digital, Card, Paper
Partners benefit from increased footfall & basket value & pay a commission on the value of spendSome revenue is derived from non-redemption
SaaS, PaaS, AaaS, Single-Partner Products
Proposition
Channels
Core product
Core Product
Format
Revenue stream
Adjacent
products
Billings c.£35mBillings c.£185m Billings c.£170m
Full Year Results August 2020
Products – at a glance
Appreciate provides products with three formats: paper, card and digital. Paper is unregulated, card and digital are provided through our e-monies license.
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Paper
• Historically the main form of product
• Unregulated product providing a working
capital benefit to the Company
• Declining in popularity
• Product provided through in-house
Flexecash system and through
Mastercard
• Regulated through FCA e-monies license
• Increasing in popularity
Card
• Product provided through e-codes or virtual
Mastercard
• Regulated through FCA e-monies license
• Select recently launched providing
virtual Mastercards
• Select offers load to virtual wallet capability
• Opportunity to grow
Digital
Full Year Results August 2020
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Product billings split
Paper Card Digital
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Cash in Trust £m
Xmas Savers Trust E-monies Trust
Full year results August 202038
Leveraging our partners
• Over 200 redemption partners across high street retail, online retail, experiences hospitality and leisure for our own products.
• In addition we buy single store cards from 35 redemption partners and access e-codes from over 130 redemption partners.
• Continue to expand range across sectors –wider variety of retailers and experiential partners including Sainsbury’s, Superdry and Virgin Experience Days
• 90+ contracts signed in past 12 months
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Colleague
1. Raise our profile as an employer of choice within the region
2. Driving brand awareness and engagement will improve talent attraction and retention
3. Establish ourselves in the community
Activating the new brand and connecting our relocation story to build awareness
StakeholdersCustomers
1. Clarity and focus brings alignment and effectiveness
2. Building the connection with our new name and brand and increase recognition raising awareness of the Groups total offerings
1. Creates curiosity about Appreciate
Group plc and what we do
2. Broadens awareness of our products
and services
3. Bringing the brand to life to build
emotional connections that in turn
influences customer action
People will know who we are and want to work for & with us
Customers will recognise us as a trusted Group
We will represent an attractive opportunity
Customers
40
The Company sells across a diverse set of industries without concentration risk.
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Consumer billings 2019/20 £m Corporate billings by sector 2019/20 £m
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60.0
Full Year Results August 2020
Operational Processes and Cashflow
41
Xmas Savings Customers
OtherCustomers
CorporateCustomers
Agree product and payment plan.
Visit website and place order.
Contact sales team or order on portal.
Cash paid over ave 40 weeks.
Cash paid with order.
Cash paid with order.
Credit terms.
Cash held in Park Prepayment trust.
Cash held in App. plc bank account.
Cash held in App. plc account or debtor created.
Paper product dispatched.
Card/digital dispatched.
Paper product dispatched.
Card/digital dispatched.
Paper product dispatched.
Card/digital dispatched.
Cash moved to App. plc bank.
Cash moved to E-monies trust.
Cash remains in App. plc bank.
Cash moved to E-monies trust.
Cash remains in App. plc bank.
Cash moved to E-monies trust.
Customer redeems product.
Customer redeems product.
Customer redeems product.
Appreciate plc pay supplier.
Cash moved from E-monies trust.
Appreciate plc pay supplier.
Cash moved from E-monies trust.
Appreciate plc pay supplier.
Cash moved from E-monies trust.
Appreciate Group earns service fee.
Non redemption earned on expiry for all channels. Funds remain in E-monies trust until expiry.
Breakage income
Full Year Results August 2020
Company strategy
42
December 2018, we set out a strategic business plan to build a robust and scalable platform on which to grow. We categorised these plans under four pillars: Productivity, Appeal, Clarity and Experience (PACE).
• Rationalised brand
architecture
• New products / market
segments
• Separated hamper
business
• Product simplification
• New product
development discipline
• Group brand activation
and awareness activity
• End-to-end digital gift card
• Enhanced onboarding
• Optimised web
conversion
• Improved digital and
physical experience
• Increased resilience and
security
• Consistent CX framework
• Customer Committee
• New ERP system
• Office relocation
• Agile working and digital
office collaboration
• Streamlining of
operations
• Migration to cloud
• Chat functionality for
Customer Care
• HR Solution (MS Talent)
• Colleague development
initiatives
Productivity ClarityAppeal
Strategic focus
areas
Completed
initiatives• Digital test & learns
• Contactless-enabled
digital gift card
• Enhanced customer
experiences
• Enhanced social media
and marketing comms
• E-codes and e-cards
added to HSV.com
• Digital Gift Cards for
Corporate clients
Experience
We will align all our efforts with
clarity and focus
We will be easier to work with for
all of our customersWe will be more efficient and
effective
We will broaden our customer
appeal to drive growth
Hamper business decision
means focus and resources
will be on our core business
Customer now at centre of
business decisions, data
and product development
Increased collaboration,
enhanced talent pool and
capability
Impact Learnings from tests have
shown consumer appetite
for Select Digital Gift Card
Full Year Results August 2020
43