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Rewards and promotions group Landround reported a slightly lower than expected full year loss and is on course to move into profit.
The pre-exceptional loss fell from £1.64m to £377,000 in the year to January 2008. Turnover rose from £5.27m to £6.57m with nearly all of the improvement coming from the Buy & Fly! rewards business. Travel Offers, which offers discount hotel accommodation, was a weak spot as its revenues fell.
Net cash increased from £700,000 to £1.1m. A placing at 20p a share raised £1.58m in December 2006.
Barclays has bought Goldfish, a major partner for Buy & Fly! in the UK. The contract lasts until next January and it is too early to assess whether Barclays will continue with it. This year Banesto, the Spanish bank, has ended its contract with the company.
White Label Rewards, which offers own branded versions of Buy & Fly!, made a small initial contribution last year but its deal with Citigroup will make a bigger contribution this year. Citigroup has launched its own brand rewards programme in Portugal, Belgium and Sweden with at least two more countries to be added this year.
House broker Daniel Stewart has cut its 2008-09 revenue forecast from £8m to £7.5m following the loss of a contract. However, it is increasing the profit forecast by 20% to £360,000. There are £3m of tax losses in the group so the tax charge should be minimal. The 2009-10 profit forecast is £900,000.
The shares rose 1p to 15p, which puts them on six times forecast earnings for this year, falling to little more than two for 2009-10. Even if a normal tax charge is assumed the 2008-09 multiple would be eight.
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