Card Factory reports 'solid' revenue growth after opening 30 new UK stores

Card Factory, the Wakefield-based chain of greeting card and gift stores, dressings and gifts, has announced ‘solid’ revenue growth for the six months ending 31st July 2017.

During this period, the retailer experienced a 6.1% rise in total revenue growth to £179.6m, compare to £169.2m at the same period the previous year.

Like-for-like sales for Card Factory also increased by 3.1%, with around 30% growth from the cardfactory.co.uk website. Excluding the website, like-for-like sales performance for the retailer’s store network was 3% (H1 FY17: -0.1%).

In the first half of of the year Card Factory opened 30 new UK stores, bringing the total UK estate to 895 stores as of 31st July 2017.

The contribution of new store openings to overall group revenue growth was slightly lower than the first half last year, as a result of later opening dates.

The retailer remains on track to deliver approximately 50 new UK stores in the current financial year, having opened a further three new UK stores since the half year point and a further three trial stores in the Republic of Ireland.

However, the company said as a result of “foreign exchange, national living wage and some of the important investments”, underlying profit before tax decreased by 4.8% to £26.3m (H1 FY17: £27.6m). Operating profit also decreased by 13.9% to £24.6m.

During this time, interim dividend increased by 3.6% to 2.9p and a special dividend of 15p per share, resulting in a return of £51.2m to shareholders.

Karen Hubbard, chief executive officer, commented: “We have delivered a solid set of interim results with strong growth in like-for-like sales and total revenue, despite the decline in footfall seen across the high street; however, profitability over the half year was impacted by foreign exchange, national living wage and some of the important investments we are making in the business for longer term growth.

“Our business model remains highly cash generative and we are pleased to be announcing another special dividend of 15 pence per share. Together with the interim dividend, this means we will have returned £246.5m to shareholders since IPO in May 2014.

“The Board intends to retain its progressive ordinary dividend policy and to continue to return any surplus funds to shareholders whilst giving consideration to the leverage of the business.

“We are the clear leaders in the greeting card market, with a strong proposition which is resonating well with customers despite challenges in the wider consumer environment. Our unique operating model continues to differentiate us from the competition, allowing us to strengthen our market-leading position.

“Trading in recent weeks has been similar to the encouraging trends seen in the first half, with continued growth in average spend as customers respond well to our new and better ranges.

“The Board is confident that the Group will continue to make further strategic progress, although notes that the full year profit outturn will reflect a continuation of some of the headwinds identified in the first half.

“We remain as convinced as ever of the strong growth prospects for the business.”

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