At the time of the results statement in June, I commented that the current year has started well with both the corporate voucher and the Christmas savings businesses ahead of the comparable period 12 months earlier. I am pleased to report that this is indeed the case and that this progress has been continued.
In March 2010 we announced that the UK Financial Services Authority had authorised Park to issue electronic money, which would be used to operate flexecash®, our new prepaid card. The launch of this innovative product commenced in June and it is being introduced progressively to our existing markets. Early indications are positive with many clients including The Family Fund, a government funded charity which supports families with disabled children, AXA Insurance Services, Lloyds TSB, Michelin, Standard Life, and VW Commercial Vehicles purchasing cards.
Our Corporate voucher business has maintained last year’s strong performance with sales ahead by 38 per cent compared with the same period last year and new business is up by 10 per cent. This reflects the strength of our sales campaign and breadth of product offering, which is tailored to meet individual customer requirements.
The Christmas savings business is also performing well with orders currently up 10 per cent, building on the improvement of last year, which saw a significant rise in operating profit. In addition to developing its own client base the prepaid flexecash® card is opening up a number of exciting opportunities for the savings business. A range of product specific flexecash® cards such as Furniture, Jewellery, Technology and Toy cards have been introduced in the 2011 catalogue. Our savings customers are already aware of the flexecash® card having placed orders for £8 million of the love2shop card for the coming Christmas.
The online business, which serves both the corporate voucher and Christmas savings operations, continues to grow. An increasing number of customers choose to harness the efficiency and convenience of the internet to manage their relationship with Park, which has helped us to improve customer service and reduce costs. Online voucher sales via highstreetvouchers.com are 70 per cent ahead of the same period last year.
In August 2010 Park announced that the company had received a VAT refund, principally in respect of an over-declaration of output tax covering the period 1978 to 1996.
In this announcement it was noted that Park expected to receive a further amount in respect of statutory interest in due course. I am pleased to confirm that this has now been received bringing the total amount received in respect of this claim to just over £4.7 million. After professional fees the net amount received of £4.4 million has been added to the Group’s cash balances, which are currently in excess of £116 million, an increase of 28% year on year, providing further evidence of the robustness of Park Group’s finances.
Given the seasonal nature of Park’s business the majority of its sales are delivered in the second half. Nevertheless, the first half of the year is also extremely important as most orders for the year are booked in that period.
The Board is pleased with progress made in this regard and is confident that, unforeseen circumstances aside, we will be reporting another sound trading performance at the half year.