Outlook: Future growth from e-commerce
FY14 results were largely in line with expectations, with only the 13% increase in the final dividend surprising us, an indication of management’s confidence in the direction of the business. Sales fell 5% in FY14, reflecting changed behaviour among home collected credit customers (HCC) and weak consumer sentiment amid marketing for Christmas past. The decline in normalised PBT was held to 4% despite further pressure from low interest rates, supported by good cost control and a good performance from other business lines. Looking forward orders for Christmas future (2014) are up 10%, and with HCC sales already reduced, the underlying growth within the corporate division and the online direct business should be more visible. The shares offer an attractive and well-supported prospective yield of 4.2%.Park Group is a provider of prepaid gift cards, multi-retailer gift vouchers and digital rewards services to corporate and consumer markets. Co.'s brands include: Love2shop, a multi-retailer gift voucher and prepaid gift card brand; Park Christmas Savings, which helps families prepare and budget for Christmas in a controlled and careful manner; flexecash®, which issues e-money; Love2shop Business Services, which provides solutions from Co.'s own multi-retailer vouchers and prepaid cards to single store vouchers and cards, gift experiences, holidays and travel; and Evolve, which is a digital rewards platform that provides commercial organizations with a means to reward individuals.
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