Final Results

PARK GROUP PLC

("Park" or "Park Group")

10 June 2014

Preliminary Results for the Year Ended 31 March 2014

Park Group plc is the UK's leading multi-retailer gift voucher and prepaid gift card business focussed on the corporate and consumer markets. Sales are generated through e-commerce, our direct sales force, and agents.

Chris Houghton, CEO, commented - "The current year has started well and we are encouraged by the strength of our order books, which are well ahead of the level of twelve months ago. This significant advance, coupled with our focus on service, financial control and efficiency, will contribute to a positive outcome for the current year."

Financial highlights

Operational highlights

Enquiries -

Chairman's Statement

The results for the year to 31 March 2014 are consistent with the comments made at the time of the interim statement last December.

At this time last year I commented that while official statistics indicated that the UK economy was showing some signs of recovery, we were not detecting any immediate positive impact on Park. I am pleased to report that the growth in Gross Domestic Product (GDP) is now becoming increasingly apparent and this improvement coupled with rising consumer confidence and further product development is now having a positive influence across all our business divisions.

Financial performance

Group profit before taxation for the year to 31 March 2014 was £9.4m (2013 - £9.5m) while operating profit improved to £7.8m (2013 - £7.5m). Finance income was lower at £1.6m (2013 - £2.0 m) on higher average cash balances highlighting the depleted returns on cash available in today's financial markets, due to depressed interest rates. Park's cash management strategy remains very conservative and we will continue to administer our cash resources to generate optimal returns commensurate with very low risk.

Customer billings were lower at £336.0m (2013 - £352.0m) while revenue was £269.6m (2013 - £279.0m). Customer billings, as we have highlighted in previous reports, is a more appropriate measure of performance than revenue. It is linked to the introduction in June 2010 of flexecash®, Park's propriety payment system, and the associated change in the way in which we are required to report revenue from prepaid cards.

Dividend

Given the improving economic environment, the stable performance of the business and its strong cash generating profile, the board is proposing to raise the final dividend by 13 per cent to 1.75p per share (2013 - 1.55p) making a total dividend for the year of 2.30p per share (2013 - 2.10 p). Shareholder approval will be sought at the annual general meeting (AGM) to be held on 25 September 2014 to pay the final dividend on 1 October 2014 to shareholders on the register on 29 August 2014.

Placing

In June 2013 the company successfully placed 8.4m new ordinary shares at a price of 52.5p with a number of new and existing institutional shareholders, raising £4.2m after expenses. Investment of the proceeds has begun with funds being used to finance a number of exciting organic growth opportunities including further investment in our flexecash® system, ecommerce and online presence as well as IT infrastructure and market research into European markets. The proceeds of the placing are also being used to provide additional working capital.

Operating performance

Over recent years the company has delivered rising profits during a time of weak economic activity in the UK and Europe and despite challenging conditions for the wider retail sector. This has been achieved by focussing on product innovation, including the successful flexecash® prepaid card system, excellent customer service and tight control of costs. We will continue with this strategy.

Operating results for the reported period were affected by two principal factors.

Firstly, the 2013 marketing campaign for our consumer business, offering a range of gift vouchers, gift cards and other gift products for the festive season, coincided with the failure of a number of major high street retailers. This was a time of particular uncertainty on the high street and led to consumers being reluctant to commit to a 45 week contribution programme for the following Christmas. The marketing programme for Christmas 2014 is now complete and it is encouraging to report that the order book is some 10 per cent ahead of the level at the same time last year.

Secondly, our corporate business, which offers an extensive range of gift cards and vouchers, supplying reward and incentive schemes, and tailor-made solutions to match the requirements of individual customers, experienced reduced demand from the consumer credit sector, where Park has a number of important customers. Outside of this sector the corporate business made good progress with underlying growth in billings, excluding consumer credit, of 9 per cent compared with the previous year.

Strategy

The company has developed into a significant UK based e-commerce and financial services business which utilises the latest advances in communications technologies and platforms, to offer customers a wide and exciting range of incentive, reward and Christmas savings products. This is underpinned by strong customer service.

The company will continue to pursue organic growth by expanding its customer base, and creating new products and services, as well as entering new markets that fit with our core proposition of being a value-added prepaid currency provider. We will consider acquisition opportunities as they arise, provided they meet our market, financial and strategic objectives. We are also cautiously looking at continuing our European expansion, undertaking extensive market research.

Employees

On behalf of all shareholders I would like to thank all our employees for their hard work and effort during a challenging year. Their teamwork, commitment and dedication underpin our company and give us considerable optimism for the future.

Current trading and outlook

The current year has started well. The recovery in the UK economy, together with the associated improvement in consumer confidence and the more stable environment in the retail sector, are having a positive effect on our business. The combination of these factors and the steps taken by management to develop and grow our offerings, is reflected in rising order books across Park Group's operating divisions.

We look forward with optimism and will continue to focus on meeting the expectations of all our stakeholders.

Peter Johnson

Non-executive Chairman

10 June 2014

Chief Executive's review

Overview

Park made solid progress during the reported period, although the overall financial result was held back by weakness in the UK retail sector (caused by retailer failures in the early part of the year) and a reduction in business from corporate customers in the consumer credit market.

The ongoing recovery in the UK economy has a positive influence on Park and the order book in our consumer business for Christmas 2014 is well ahead of last year. The majority of our corporate business continues to deliver a good performance across its varied range of incentive and reward products and is achieving a solid financial outcome while also adjusting to the lower levels of business from the consumer credit sector.

Strategy

Our four key aims are to enhance our retailer proposition, grow our multichannel offering, expand the customer base and develop and exploit our infrastructure.

Systems and technology infrastructure are well established throughout the organisation ensuring we have a solid base upon which we can achieve these goals and improve profitability, without compromising customer service.

Our recent success and growth has principally been achieved by embracing the internet, information technology and mobile channels to transform our business model. While the customer base remains broadly similar, the way in which we interact with them is unrecognisable from a decade ago. The change has been revolutionary and as a consequence, Park has developed market leading products and systems to address the seismic shift in the way people and businesses now like to work and communicate.

flexecash® 

The company has focussed on product and service development to capitalise on this technology. Nowhere is this more evident than the successful development and launch of flexecash®, our payment system, which now has over 1,100 corporate users, with over £236m of value loaded since launch.

flexecash® has transformed the way Park serves its customers by offering them far greater flexibility, personal choice and convenience. The system was introduced progressively in line with a strategy of exploring new applications in a carefully controlled manner. One of the most recent developments allows card users to load value via an e-wallet and this application also enables them to exchange value for e-codes, which allows customers to shop online. This type of application, with its speed, security and 24 hour convenience, would have been unthinkable just a few years ago and illustrates how Park has grasped the opportunities offered by the internet to develop its business and enhance customer service.

IT development

Keeping pace with information technology (IT) requires continued investment in both hardware and software. The advance of social media offers the company further opportunities, which it is utilising to capture new business and enhance the customer experience. We are confident that this continued investment will improve margins over the medium and longer terms.

Controlling and managing information in a safe, secure environment is also essential to Park and its customers, as we become a significant player in the financial services market. In 2012 the company achieved accreditation for ISO 27001, which is the international standard describing best practice for an information security management system. During 2013 Park moved to a higher level within this standard, providing even greater comfort for our end users over security and data management control.

Customer relationship management

The proportion of orders placed via our websites continues to rise and is now over 56 per cent. Customers' payment preferences are also changing with an increasing use of direct debits. This is not only convenient for customers but also facilitates cash collection and reduces the cost of chasing slow payers. An added feature is that direct debit users are generally reliable and loyal with improved retention rates compared with other payment methods.

The company strives to communicate with its customers in a manner which is effective, convenient and matches their needs. The latest advances in internet technology and mobile telephony are incorporated in Park's marketing programmes and this is reflected in the design of the company's websites.

The Christmas campaign is characterised by an intensive, but carefully targeted advertising programme including television, print and digital media. In previous years, customers would respond to an advertisement by contacting the company to request a brochure, which would have lead to an order some two weeks or more later. Today orders are placed via company websites within minutes of screening, as more customers use tablets and smart phones to interact with us. This immediate reaction gives excellent feedback regarding the effectiveness and quality of the marketing programme and enables the company to adjust its marketing strategy very quickly in response to customer reaction.

Use of Park's Facebook pages is also growing and we currently have over 60,000 followers (2013- 30,000). The use of social media allows us to have a real-time dialogue with our customers. This helps us to increase orders by promoting products, holding competitions and generating friend recommendations for our services, as well as improving customer service by identifying and solving customer issues quickly. A further benefit of this method is that our customers can talk to each other and many of our more experienced customers often answer the questions of others, without Park needing to respond. This all helps to reduce operating costs.

Corporate

The corporate business, excluding sales to the consumer credit industry, delivered a good result with a particularly strong performance in the second half of the year. Billings for the year were 10 per cent lower at £137.5m (2013 - £152.6m) although excluding the consumer credit sector, underlying billings rose by 9 per cent compared with the previous year.

Park offers a large portfolio of gift cards and vouchers, which are used by an ever increasing client base as incentive and reward products. Customer numbers have grown steadily and we have relationships with thousands of UK businesses, who now choose Love2reward to help them recognise high-achieving employees, motivate those who need a challenge, incentivise customers or produce reward responses to research studies.

Each year the corporate business receives many thousands of new leads generated from its very active marketing programme. The online operation, highstreetvouchers.com, is a major source but other leads come from trade press advertising, sales promotions and magazine articles. There are also a significant number from the best sources possible: customer recommendations and word of mouth. Orders can be divided into three broad areas, staff rewards; sales and marketing; and the reseller market (where clients purchase a Park product and sell it on to their customers).

Our product range is designed to give customers the flexibility to develop schemes tailor-made to meet their individual requirements. As one of the largest providers of incentive and reward solutions in the UK, the business is a specialist in performance improvement schemes and has been providing market leading reward management products for over 20 years.

Client retention is a key measure of our corporate performance as it reflects all aspects of our service. In the year under review, the overall customer retention level was 83 per cent a very creditable performance.

One of the features of the year has been the rapid growth of the Everyday Benefits card, which is an employee voluntary benefit product. This card enables employers to give staff a Love2shop card, usually with value pre-loaded, which can then be used at over 13,000 retail outlets across the UK. The employee can also top it up and benefit from a discounted rate.

We have developed products for the home insurance market and although in early stages, feedback from the providers and their customers has been positive.

There are many examples of employee reward cards, which allow companies to recognise quality, performance and loyalty. If cards are customised with the corporate identity or a campaign theme, their perceived value is enhanced. Adding the personal touch to a reward mechanism lets the recipient know that they matter.

Park Travel, our full service travel agency, which redeems our Love2travel card, Love2shop prepaid card and vouchers as well as traditional payment methods for holidays, has performed well. This operation has delivered consistent growth since it was introduced and commission on holiday bookings showed a 28 per cent growth year-on-year with the number of bookings up by 37 per cent. The total value of holidays booked through Park Travel amounted to £2.5m for the year.

Consumer

The consumer business enables customers to budget for Christmas in a manner that allows them to manage their finances for the festive season in a careful, controlled and structured way and also includes internet sales to consumers. Billings for the year under review were 0.4 per cent below the level of the previous year at £198.6m (2013 - £199.4m), and are in line with the performance reported in the interim report of December 2013.

Each Christmas marketing campaign commences a year in advance of the festive season and peaks in the first calendar quarter, with a carefully targeted advertising and communications programme. Customers commit to making contributions over 45 weeks, ending a few weeks before Christmas, when orders are delivered. This long-established process of regular payments allows customers to plan and prepare for their Christmas expenditure over many months and they appreciate the way the programme smoothes their spending and overcomes any uncertainty or short term financial concerns. While the structure of the process has changed little over the years, the range of products and the ways in which customers interact with Park, have developed and improved steadily.

As already mentioned, the campaign for Christmas 2013 was affected by general economic uncertainty and the failure of a number of high street retailers in the early months of that year, which coincided with the time customers usually commence their contribution programme. The period from November 2012 to March 2013 was particularly challenging with a number of household names including Blockbuster, Comet, HMV, Jessops and JJB entering administration. This was a time of significant concern in the retail sector and led to some consumers being reluctant to commit to a multi-month contribution programme. Against this background, the modest reduction in Park's consumer billings is understandable and actually reflects the high level of customer loyalty to the company and their faith in our Christmas products, despite challenging economic conditions.

The number of UK agents trading for Christmas 2013 increased to 124,000 from 122,000 last year and the average customer order value rose to £440 from last year's level of £430 while customer numbers dipped to 403,000 from 423,000.

The outlook for the retail sector and consumer confidence in general began to improve during 2013 as the UK economy started to show increasing signs of sustained growth. The effect of this upturn on Park is reflected in the strong order book for Christmas 2014, which is running 10 per cent ahead of last year with cash contributions rising by a similar amount

The Irish business, which was acquired in 2010, made further progress and delivered an encouraging result with billings ahead by 17 per cent and the order book for Christmas 2014 is 7 per cent above that of the previous year. Park has been building its market share steadily. When it entered the Irish market, the Love2shop voucher was redeemable at 16 major retailers, today that number has risen to 41 and the new flexecash® card is accepted by 12. The launch, in December 2013, of the company's Irish web site www.love2shop.iegives customers direct access to Park's gift card and vouchers, which can be used locally at many leading retailers including Argos, Debenhams, ELC (Early Learning Centre), Halfords, Heatons, Mothercare, Pet Stop, River Island, Shaws, Shoe Zone and SportsWorld.

Park has always offered its customers a choice of ways to interact with the company. The online business, highstreetvouchers.com, typifies this approach by allowing customers to manage every aspect of their order themselves, from selection through to delivery. highstreetvouchers.com is an online retailer supplying a wide range of gift vouchers and prepaid gift cards for many of the UK's leading brands including: Arcadia, Argos, Asda, B&Q, John Lewis, Marks & Spencer, National Garden and Sainsbury's as well as Love2shop gift cards and Park's multi-store gift voucher, which is now accepted at 20,000 leading high street stores.

Many customers prefer the freedom and flexibility of highstreetvouchers.com and this is reflected in its rapid rate of growth. Billings advanced a further 27 per cent to £16.9m from £13.3m in the previous year and there were over 150,000 transactions. The signs are encouraging that this rapid expansion will continue. The site originated in the consumer division but now extends across Park's offering and affords corporate customers the opportunity to purchase gifts. It has become the biggest source of enquiries for the corporate business.

A further feature of the highstreetvouchers.com web site is that it can be used easily and conveniently by overseas customers to purchase gift vouchers, and gift cards for delivery to UK recipients. This makes the site especially attractive as a source of Christmas gifts for UK based friends and family. Payment is currently accepted from customers in more than 29 countries. This year, billings from overseas customers increased by 35 per cent, to £1.0m.

Trading conditions improved steadily during the year and this was reflected in rising confidence among both our consumer and corporate customers. The current year has started positively, is progressing well and we are encouraged by the strength of our order books.

This progress, coupled with our focus on service, financial control and efficiency, means that the group is well positioned to achieve further successes. We look forward to the coming year with confidence and anticipate further underlying growth.

Chris Houghton

Chief Executive Officer

10 June 2014

Financial review

Profit from operations

The group's operations are divided into two operating segments:

All other segments comprise central costs and property costs.

Revenue and margin from sales of flexecash® cards is included in both operating segments.

Operating profit is detailed below:

Operating profit for the year ended 31 March 2014 has increased by £0.3m to £7.8m.

In the consumer business, customer billings have decreased by 0.4 per cent to £198.6m. Revenue has also decreased by 2.8 per cent to £178.4m. Operating profit at £6.2m has increased by £0.7m from £5.5m in 2012/13. The decline in billings reflects a lower order book in the UK for Christmas 2013 of £174.1m, down 2.8 per cent. This was offset by strong growth in internet billings at £16.9m, up 26.3 per cent. The overall impact on gross margins was small. The current year has seen a lower level of impairment and depreciation charges on its intangible assets of £0.4m.

In the corporate business, customer billings have decreased by £15.1m (9.9 per cent) in the year to £137.5m, with operating profit decreasing by £1.0m. Whilst the growth in billings in the incentive and reward sector was strong, up £8.2m (9.5 per cent) in the year, the business saw a reduction in the value processed through its card system and the value of vouchers sold to corporates in the consumer credit sector of £24.0m (45.6 per cent). Revenue has declined by £4.3m (4.5 per cent) to £91.2m. The reduction in revenue is smaller than the decline in billings year on year, due to the reduction in billings, being primarily attributable to a lower level of billings from its card business. Card revenue is generally recognised as the margin earned on the value of cards spent rather than the gross value of customer billings. This decline in billings directly resulted in a reduction in gross margin and operating profit of £1.0m to £4.1m.

The decreased costs of other segments of £0.7m reflects primarily a reduction in staff costs of £0.4m and a reduction in professional fees of £0.3m.

Finance income

Finance income declined from £2.0m to £1.6m reflecting lower market interest rates available. This reduction was in spite of an increase in average total cash balances, including monies held in trust, over the prior year.

Taxation

The effective tax rate for the year was 22.6 per cent (2013 - 20.3 per cent) of profit before tax.

Earnings per share

Basic earnings per share (eps) decreased to 4.16p from 4.57p.

Dividends

The board has recommended an increase in the final dividend of 13 per cent to 1.75p per share. An interim dividend of 0.55p per share was paid on 7 April 2014. Subject to approval of the final dividend at the AGM, the total dividend for 2014 will be 2.30p per share.

Cash flows

At the end of March 2014 £14.8m (2013 - £10.8m) of cash and cash equivalents was held by the group with a further £0.5m (2013 -£0.5m) held as deposits with a maturity period of greater than three months but less than 12 months. In addition, £45.4m (2013 - £40.2m) was held by the Park Prepayments Trustee Company Limited. The trust holds payments received in respect of orders for delivery the following Christmas. The conditions for the release of this money to the group are detailed in the trust deed, which is available at www.getpark.co.uk and summarised in note 15. In addition, at 31 March 2014, the group held £12.1m (2013 - £8.1m) of cash in the Park Card Services Limited E money Trust (PCSET) to support the E money float in accordance with regulatory requirements.

The total amount of cash and deposits held by the group combined with the monies held in trust has increased in the year to £72.9m from £59.6m as at 31 March 2013. These total balances peaked at just over £165m in the year, representing an reduction of £5m over last year. This was due to the earlier release of vouchers to customers who ordered utilising our Christmas prepayments plan. The group had no bank borrowings in the period.

On 18 June 2013 the company placed 8.4m new ordinary shares at a price of 52.5p per share, raising £4.2m after expenses.

During the year, the group invested a further £0.6m in improving its customer facing systems, and a further £0.2m in associated computer hardware.

Interest income received from maturing deposits increased from £1.8m to £1.9m despite the general decline in rates being offered for new bank deposits.

Provisions

At the year end, provisions had increased to £37.2m from £36.8m. This was due to a reduction in the provision for unspent vouchers of £1.0m, offset by an increase in the amounts payable in respect of card billings of £1.5m. The value of unspent vouchers included in the provision, arise primarily from sales in the corporate business. Included within provisions is an amount of £53,000 (2013 - £168,000) in respect of future expected settlements of claims arising from the mis-selling of payment protection insurance. The group ceased to sell this insurance in 2007 when it closed its loan broking business.

Accounting policies

Revenue recognition

Revenue from cards is recorded differently to revenue from paper vouchers and is the margin earned based on customer billings, recognised when the value loaded on the card has been redeemed. Where cards are sold to businesses for onward gifting to consumers with no right of redemption, revenue includes an estimate of projected balances remaining on the card at expiry. The amount included in this year's income statement as revenue from flexecash® cards is £5.4m (2013 - £5.5m).

Pensions

The group continues to operate defined benefit pension schemes, where pensions at retirement are based on service and final salary. These schemes are now closed to future accrual of benefit arising from service with the group. The pension deficit based on the valuation performed at 31 March 2014 has increased to £1.2m (2013 - £0.3m).

The group has applied the revised standard IAS 19 Employee Benefits (2011 revised) which is applicable for accounting periods commencing on or after 1 January 2013. As a result, the group have restated the 2013 comparatives, of which the full impact is discussed at note 28. The group has recognised a credit of £1,000 (2013 - cost of £60,000 revised) in the income statement, and remeasurements in the statement of comprehensive income (SOCI) of a loss of £1.3m (2013 - gain of £0.2m) net of tax.

In the year ended 31 March 2014, contributions by the group to the schemes totalled £0.7m (2013 - £1.4m). The latest actuarial valuation performed as at 31 March 2013 indicated a technical provisions deficit (reflecting the liabilities to pay pension benefits in relation to past service as they fall due) of £3.8m (31 March 2010 - £3.3m) and expected future group contributions of £0.7m per annum.

Martin Stewart

Group Finance Director

10 June 2014

Risk factors

Park Group plc

Park Group plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR TO 31 MARCH 2014

Park Group plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2014

Park Group plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Park Group plc

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2014

NOTES TO THE ACCOUNTS

(1) Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS's) as adopted by the European Union (EU) including International Financial Reporting Interpretations Committee (IFRIC) interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

Park Group plc is incorporated and domiciled in the United Kingdom. The financial statements have been prepared under the historical cost convention, as modified by the accounting for financial instruments at fair value where required by IAS 39 Financial Instruments: Recognition and Measurement. The group and company financial statements are presented in sterling and all values are rounded to the nearest thousand (£'000) except where otherwise stated.

The accounting policies have, other than as stated in note 9, been applied consistently to all periods presented in these financial statements and by all group entities.

(2) Going concern

The group's business activities, together with factors likely to affect its future development, performance and position, are set out in the chief executives review. The financial position of the group, its cash flows, liquidity and solvency position and financial risks are described in the financial review.

The group's forecasts and projections, taking into account reasonably possible changes in trading performance and customer behaviour, show that the group has sufficient financial resources to fund the business for the foreseeable future despite the group's net liabilities and net current liabilities. Funds are utilised for working capital purposes as permitted under the terms of the Park Prepayment Protection Trust (PPPT). The group's working capital requirements are dependent upon a continuing level of prepaid sales to corporate customers and, at certain times during the year, amounts drawn from the PPPT to meet its working capital requirements (under the terms set out in note 15). The group's positive cash flow from its ongoing customer base, together with the facility to drawdown funds from the PPPT at certain times of the year, enables it to operate without reliance on any external funding. The group continues to trade profitably and early indications for growth in the current year are positive. Accordingly, the directors continue to adopt the going concern basis in preparing the consolidated financial statements.

(3) Changes to International Financial Reporting Standards

Interpretations and standards which became effective during the year

The following accounting standards and interpretations, that are relevant to the group, became effective during the period:

The amendments to IAS 1 require items presented within other comprehensive income to be grouped based upon the potential for subsequent reclassification to profit and loss ie: those that will be reclassified and those that will not be. As a result of adopting this amendment, the group has made changes to the presentation of these items within the statement of comprehensive income.

The group has adopted IFRS13 Fair Value Measurement which is effective for periods commencing on or after 1 January 2013. The standard establishes a single framework for measuring fair value and making disclosures about fair value measurement, where its use is already required or permitted by other standards within IFRS. Adopting this standard has not had a material impact upon the group's financial performance or position.

As a result of IAS19 R, the group has changed its accounting policy with respect to the basis for determining the income or expense relating to the net pension liability. The revision requires all actuarial gains and losses to be recognised immediately within the statement of comprehensive income and also replaces the expected return on assets and interest costs on the defined benefit obligation with a single interest component, based on the discount rate. Any plan amendments will be recognised in full in the period of the amendment. There are also a number of enhanced presentation and disclosure requirements. The impact of the change in policy on the current year is immaterial and the full impact on the prior period is shown within note 9.

Interpretations and standards which have been issued and are not yet effective

The following standards have been adopted by the EU but are not yet effective for the year ended 31 March 2014 and have not been applied in preparing the financial statements. Those standards that have relevance to the group are mentioned below:

The directors anticipate that the adoption of these standards and interpretations in future periods will not have a material impact on the financial statements when the relevant standards and interpretations come into effect.

IFRS 15 Revenue from Contracts with Customers was released on 28 May 2014. The board of directors is currently considering the impact of this standard on the group's financial statements including the timing of revenue recognition, income in respect of vouchers and balances on cards which will never be spent and whether revenue should be recognised on a gross or net basis in respect of certain revenue streams.

(4) Accounting policies

The financial information in this preliminary announcement has been prepared in accordance with the accounting policies described in the annual report and accounts for the year ended 31 March 2013 except as described in note 9. The annual report and accounts for the year ended 31 March 2013 can be found on our website at www.parkgroup.co.uk.

(5) Segmental analysis

The amount included within the other segments/elimination column reflects vouchers sold by the corporate segment to the consumer segment. They have been included in other segments/elimination so as to show the total revenue for both segments.

All other segments are those items relating to the corporate activities of the group which it is felt cannot be reasonably allocated to either business segment.

Comments on the effective tax rate can be found in the financial review.

(7) Earnings per share

The calculation of basic and diluted earnings per share is based on the profit on ordinary activities after taxation of £7,409,000 (2013: £7,717,000) and on the weighted average number of shares, calculated as follows:

(8) Reconciliation of net profit to net cash inflow from operating activities

(10) Responsibility Statement

To the best of each director's knowledge:

(11) The financial information set out above does not constitute the group's statutory accounts for the years ended 31 March 2014 or 2013 but is derived from those accounts.

Statutory accounts for 2013 have been delivered to the registrar of companies. The auditor, Ernst & Young LLP, has reported on the 2013 accounts; the report (i) was unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The statutory accounts for 2014 will be delivered to the registrar of companies following the annual general meeting. The auditors have reported on these accounts; their report is unqualified and does not include a statement under either section 498(2) or (3) of the Companies Act 2006.

The annual report will be posted to shareholders on or before 28 July 2014 and will be available from that date on the group's website: www.parkgroup.co.uk.