Preliminary results/media/Files/A/... · •Provisions reduction due to the paper voucher provision reducing from £36.2m to £30.2m as business mix continues to move from paper to

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


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


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)


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)


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


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

11

Reconciliation of reported to adjusted profit


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


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

13

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


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%

14

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


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%

15

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


• 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

16

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


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

17

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)


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


£-

£20

£40

£60

£80

£100

£120

£140

£160

£180

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

PPP Trust £m

Act 2017/18 Act 2018/19 Act 2019/20

£-

£20

£40

£60

£80

£100


Emonies Trust

Act 2017/18 Act 2018/19 Act 2019/20

£-

£50

£100

£150

£200

£250


Total Cash

Act 2017/18 Act 2018/19 Act 2019/20

£0

£10

£20

£30

£40

£50


Free Cash £m

Act 2017/18 Act 2018/19 Act 2019/20

Growth in trust requirements

Bank financing is in place to enable growth of higher margin regulated products


(£40)

(£20)

£0

£20

£40

£60

£80

£100

£120


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.

£0

£20

£40

£60

£80

£100

£120

£140


Paper Voucher Provision £m

Voucher Provision 2017/18 Voucher Provision 2018/19 Voucher Provision 2019/20


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

3

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

22

Implementing our strategic business plan


Productivity

We will be more efficient and effective

Infrastructure Investment


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


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

25

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


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


Key dates coming up• 29 September AGM and Trading Update• 24 November Half Year Results


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


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


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


-

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


Competition

35

• 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


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


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.

37

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


0.0

100.0

200.0

300.0

400.0

500.0

FY18A FY19A FY20A

£m

Product billings split

Paper Card Digital

0.0

20.0

40.0

60.0

80.0

100.0

120.0

FY18A FY19A FY20A

£m

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

39

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.

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Consumer billings 2019/20 £m Corporate billings by sector 2019/20 £m

0.0

10.0

20.0

30.0

40.0

50.0

60.0


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.





Cash moved to App. plc bank.

Cash moved to E-monies trust.

Cash remains in App. plc bank.


Cash remains in App. plc bank.


Customer redeems product.



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


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


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Documents

Preliminary results/media/Files/A/... · •Provisions reduction due to the paper voucher provision reducing from £36.2m to £30.2m as business mix continues to move from paper to