Business hit by Farepak failure makes comeback.

Byline: BY ALISTAIR HOUGHTON Daily Post Business Staff

CHRISTMAS savings company Park Group says it is bouncing back from the Farepak fall-out despite widening half-year losses.

The Birkenhead company reported a pre-tax loss of pounds 3.9m for the six months to September 30, compared with a pounds 2.9m loss for the same period the previous year.

Rival firmFarepak collapsed amid a blaze of publicity last October and consumer confidence in the Christmas savings sector was badly hit.

Park, which has led industry drives to restore confidence in the sector, said customer numbers fell from 617,000 last year to 399,000 this year, while Christmas savings revenue for the first half of this year fell from pounds 4.1m to pounds 3.3m in line with expectations.

But chairman and founder Peter Johnson said he was optimistic about the sector's future as orders for Christmas 2008 were already 30%above the same date last year.

And he believes Park can encourage many of the thousands of people who gave up on savings clubs after Farepak to sign up again.

He said: "The interim results reflect the expected impact on our business of the failure of Farepak in October last year and the consequential loss of customer confidence in the sector.

"The board remains very confident of the underlying strength of the business and is encouraged by the early indications for Christmas 2008 that show promising signs of recovery." The company always shows an interim loss, as so much of its business happens around Christmas.

Group managing director Chris Houghton said the company's increased spending on promotional activities and establishing trust accounts to increase confidence in the sector had helped the loss widen.

But he said the company was reaping the dividends of that investment, as next year's sales figures were on the up.

Park became a founder member of the Christmas Prepayments Association in June, and in August launched a new trust account scheme to give customers' payments added security.

He said: "We've worked with the Government to put added protection in place for our customers. The reflection of that return in customer confidence is these increased sales for next year.

"The proposition of saving for events is strong and we've got the ability to grow.

"We've got a substantial database of people who used to save.

"That database is as big as our existing business so we've got a fair opportunity to grow."

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