Card Factory delivers sales growth, but profits down

Card Factory’s ceo Karen Hubbard.
Card Factory’s ceo Karen Hubbard.

Continuing its long run of sales growth, Card Factory has reported interim results which showed its sales were up 6% (to £179.6 million) for the six months to end of July and like-for-like up 3.1% on the same period last year.

Karen Hubbard, ceo of Card Factory said the figures reflected the retailer’s “strong proposition which is resonating well with customers despite challenges in the wider consumer environment.” In her chief execution report she admitted that the Card Factory business has not been “immune to the cost headwinds of foreign exchange and national living wage.” She explains that these increased costs were partly mitigated by “business efficiencies, although the margin impact has been higher than initially expected, largely due to our decision not to raise prices so as to maintain our leading value proposition with our customers.”

Some of the Christmas offer that is now on sale in Card Factory stores.
Some of the Christmas offer that is now on sale in Card Factory stores.

These factors impacted on profits, with the underlying pre-tax profit before tax down by 4.8% to £26.3m (compared to £27.6m in the same period last year).

Reinforcing the belief that there is further potential for expansion, she added: “We remain as convinced as ever of the strong growth prospects for the business.”

Among the highlights was an uplift in sales in its non-card products, reflected in a growth in average spend as well as increased business from its online operations. Albeit from a low base, its Card Factory transactional website saw its sales grow by around 35% while its more established Getting Personalised site increased turnover by 5% after flat sales in the year previous.

Expansion of its online operations is one of the value chain’s four pillars of growth.
Expansion of its online operations is one of the value chain’s four pillars of growth.

Shareholders will be very happy as £51.2 million is being returned to them via a special dividend of 15p a share.

Card Factory looks set to open its 900th store in the next few days. Its retail park stores have performed ahead of expectations.
Card Factory looks set to open its 900th store in the next few days. Its retail park stores have performed ahead of expectations.

The group opened a further 30 stores in the period as well as its first store in the Republic of Ireland (which has been joined by a further three stores in Eire since the financial period). Its stores in retail parks “have performed ahead of expectations,” according to Karen.

There is a significant milestone in the midst as Card Factory plans to celebrate the opening of its 900th store in the next few days. This significant store is due to open in Epping Forest, Essex, coincidently only a few miles from Clintons’ head office.

 

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