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Card Factory profits rise 368%

CEO ‘incredibly pleased’ with £112m earnings as shoppers return to stores

 

An “incredibly pleased” Card Factory ceo Darcy Willson-Rymer has overseen pre-tax profits at the greetings retail giant rocket by 368.5% thanks to shoppers returning to stores and a strong golden quarter.

The preliminary results for the full year to 31 January, 2023, were released yesterday, 3 May, and showed in-store sales grew by 7.3% on a like-for-like basis, which the retailer attributed to the success of new ranges and implementation of target price increases where its top price point rose from £2.49 to £2.99, although it still sells many cards at 29p.

Above: CEO Darcy Willson-Rymer has overseen strong results
Above: CEO Darcy Willson-Rymer has overseen strong results

Pre-tax profits rose from £11.1million a year prior, to £52.4m including a £3.5m one-off benefit, as sales shot up 27.1% to £463.4m with Darcy stating: “Revenue growth has been underpinned by a strong performance of store-based sales and Everyday card ranges, alongside strong trading through the Christmas season.”

The company also posted an EBITDA (earnings before interest, taxes, depreciation, and amortization) of £112.0m which was a 28.6% increase compared with £85.6m a year ago.

However, online sales dropped by 18.8% year-on-year at Cardfactory.co.uk while Gettingpersonal.co.uk was down 34.7% with customers returning to the High Street and the impact of Royal Mail’s strikes over the Christmas trading period, but yesterday’s statement said its transition of the two websites to a new shared platform is now complete and will enable “range development and further functionality” – the digital side is still significantly up by 86.4% in comparison to pre-pandemic levels.

Above: The digital side is up 86.4% on pre-pandemic levels
Above: The digital side is up 86.4% on pre-pandemic levels

Darcy added: “I have been incredibly pleased with our performance this year which has been ahead of expectations. These strong results reflect positive momentum across the business, including notable progress on our strategic growth initiatives, buoyed by the marked shift of customer spend back towards the High Street.

“With new ranges and our compelling value-for-money offer clearly resonating with customers, driving both store transactions and average basket values.

“Proactive measures that we put in place to manage the inflationary pressures faced in the year, coupled with our strengthening financial position, have underpinned positive progress on our strategic priorities.

“While remaining mindful of the ongoing impact of the cost-of-living crisis on our customers, we are confident that we are well positioned to make good progress in our transition to becoming the market-leading omnichannel retailer of cards and gifts.”

In addition to last week’s acquisition of SA Greetings in South Africa, the report revealed Card Factory also signed a long-term master franchise agreement in April with Middle East-based Liwa Trading Enterprises, which will act as its exclusive franchise partner in the region, to open around 36 Card Factory-branded stores in the area.

Above: Chairman Paul Moody is confident in Card Factory’s growth ambitions
Above: Chairman Paul Moody is confident in Card Factory’s growth ambitions

Looking to the new financial year, the company said: “Trading in the first weeks has been encouraging and slightly ahead of the board’s expectations. Both everyday and seasonal ranges have performed strongly across cards and gifts during this time, with our offer across our FY24 spring seasons of Valentine’s Day and Mother’s Day also landing well with customers, resulting in a robust performance.”

As the business continues to open new outlets, taking its store estate to well over 1,000 already, further growth is still on the cards.

Card Factory chairman Paul Moody said: “There is clear, positive momentum within the business and early signs that the Opening Our New Future strategy will help deliver our growth ambition. While mindful of the ongoing impact of the cost-of-living crisis, we remain confident that our great value-for-money proposition across a range of products and price points will resonate with customers who continue prioritising celebrating life’s moments.”

Top: Continuing store openings like at Spennymoor earlier this year are helping Card Factory’s growth

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