Park Group: Upward Momentum Continuing
Edison | Mar 29, 2015 04:05AM ET
Momentum continuing
Park Group (LONDON:PRKG) has provided an update on second half year trading, for the year ending 31 March 2015. Preliminary results will be released on 9 June. The sales momentum that was apparent in H1, across all key business lines and products, has continued through H2. Management says that order indications for the financial year about to commence are also encouraging, giving confidence that growth will be maintained. We view the trading update positively. However, our estimates are already a little ahead of consensus, and we will wait for the full results to reassess these.
Strong trading update…
Park says that the encouraging trading levels it experienced in H1 have been maintained through H2, and that early order indications for FY16 (which begins on 1 April) are also encouraging. Improved consumer confidence, economic recovery, e-commerce distribution and Park’s continuing investment in product innovation are driving the top line forward across all key business lines. We also expect growth in the share of online activity to continue supporting efficiency. The financial position remains strong, with cash balances remaining well ahead of the previous year.
…confirms our above consensus forecasts
Customer activity in the Consumer division appears to be in line with our forecasts (8.5% billing growth). In the Corporate division, growth in incentive products is described as excellent, while the online business has again seen growth of more than 25%. Sales to the home collected credit sector continued to weaken as expected. Although we have not changed our estimates, we view the statement positively and believe that we are already ahead of the market consensus (source: Thomson Datastream). We forecast billings of £369.7m and believe consensus to be £368m. Our EBITDA forecast of £10.7m compares with £10.6m consensus, and our forecast EPS of 4.59p compares with a consensus 4.5p.
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