Voucher and savings club Park reported a sharp drop in annual profits today, but said orders for this Christmas were up 17% amid signs the industry is on the mend following the high-profile collapse of rival Farepak.
Park chairman Peter Johnson said the savings figure for this festive season represented a “healthy recovery” after Farepak went into administration in 2006, leaving around 150,000 Christmas savers £40m (€50.7m) out of pocket.
The subsequent loss of confidence in the industry was reflected in Park’s annual figures today, with pre-tax profits from continuing operations in the year to March 31 falling to £5.2m (€6.6m) from £10.1m (€12.1m).
Total revenues in Christmas savings fell 33.8% to £143.5m (€182.m), following a drop in customer numbers from 612,000 to 398,000. Agent numbers fell to 94,000 from 116,000 and operating profits slid to £700,000 (€887,369) from £5.1m (€6.5m).
As well as reduced levels of activity, Park paid for the cost of improved protection for customers via the establishment of trust accounts.
It added: “We have worked hard during the year to restore customer confidence in the industry and to explore new ways to recruit customers.”
The company has embarked on television advertising and more web based activities in order to support its drive.
And Park said tougher economic conditions meant its business model was likely to prove more attractive to customers ahead of Christmas.
It added: “The savings concept is still very strong and during periods of economic uncertainty and inflationary pressures, our company provides an easy and convenient solution to help families plan for Christmas and avoid debt at an expensive time of year.”
The company’s online voucher shop, which sells high street vouchers direct to customers, more than doubled sales year-on-year to £2.3m (€2.9m) and saw transactions increase by 259%.