Park Group PLC (LON:PARKP) continued to trade well in H119, with order books in line with expectations, a reduced seasonal loss, strong cash flow and the dividend increased. Early results from the strategic review undertaken by the new senior management team indicate a further push towards full digital enablement, harnessing market trends to further grow the core multi-retailer redemption offering in existing markets and tap new areas with strong potential.
Good H1: Minimal IFRS 15 impact
Park’s business is highly seasonal, with c 75% of annual revenues and all of the profits falling into the second half of the year, including the key Christmas trading period. Importantly, for the current (FY19) year, the H119 results to 30 September show underlying trading and order books in line with expectations. The seasonal pre-tax loss reduced to £1.5m (H118: £1.9m), mainly due to timing factors, cash flow was strong and the interim dividend was increased by 5%. The anticipated IFRS 15 restatements show a relatively modest annual profit deferral of c 3%, with no impact on billings, ultimate profitability, cash flow or dividend-paying capacity. Our FY19 PBT estimate falls c 6% due to this profit deferral, and also as a result of expenses related to the strategic review undertaken by the new senior management team.
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