On 16 February, we were excited to welcome management from Appreciate Group on Hardman Talks. Appreciate’s CEO, Ian O’Doherty, and CFO, Tim Clancy, gave a presentation on the group’s businesses of making “giving, receiving and experiencing easier and more joyful”.
The company outlined how its operations have been transformed in recent years with heavy investment in digitalising and modernising systems, products and the culture through its PACE strategy (productivity, appeal, clarity and experience). They outlined the main products, markets, competition and opportunities. The presentation also covered the company’s recent financial performance. An extensive Q&A session ranged across a broad range of topics inter alia including medium-term growth, investment plans, competition, revenue generation, board evolution, as well as some technical financial questions.
Appreciate Group facilitates pre-payment, gifts and engagement with staff and customers through many of the country’s most popular voucher, card and e-code products, which can be spent online, or at 24,000 retail sites. The model is increasingly digital. Appreciate offers investors potentially explosive growth through new digital offerings in the gifting/engagement markets, where its share is just 3%. This is uniquely combined with a dominant 71% market share in the consumer pre-paid Christmas savings market, which brings decades of key partnership management experience. FY21-FY22 has been a challenging period for Christmas savings, but Appreciate is generating the profits to fund the digital growth. Digitalisation not only opens new markets (a European comparator quadrupled sales in two years), but also improves efficiency and customer service, and typically sees share ratings double those of non-digital models.
Combining a profitable core, decades of experience – especially in managing key partnerships – and the latest technology gives Appreciate a unique fintech strategy. It is at the start of the transition to a digital model but has already attracted new partners like PayPoint. Comparable models are growing explosively, and are on higher valuations.