Card Factory delivers '˜solid' set of interim results

In the six months ended July 31, 2016 the Card Factory’s revenues rose by 4.8 per cent to £169.2m, while profit before tax grew by 7.3 per cent to £27.6m.

The Wakefield-based firm said it had achieved improvements in the quality and range of both card and non-card products. However, softer footfall resulted in lower than normal sales growth from stores.

The company revealed that 34 net new stores opened in the half year period, bringing the total estate to 848.

It said it had also achieved a strong pipeline of further new store opportunities. It is on track to deliver around 50 net new openings by the year end.

Karen Hubbard, the chief executive, said: “We have delivered a solid set of interim results with further growth in both revenue and profit, albeit with softer footfall resulting in slightly lower than normal sales growth from our stores.

“We remain highly cash generative and are pleased to be announcing another special dividend of 15 pence per share. Together with the interim dividend, this means we will have returned over £160m to shareholders since IPO just over two years ago.

“We remain the clear leaders in our market, with a strong value proposition, a unique vertically integrated operating model, significant scale advantages, and industry-leading margins. The potential for further growth - through like-for-like sales growth, further store roll-out and the full exploitation of our online channels - is exciting.

“Trading in recent weeks has been similar to the trends seen in the first half, with encouraging continued growth in average spend. We approach the important final quarter with confidence in the quality and value of our offer, including our new Christmas ranges, and remain confident of delivering full year underlying profit before tax within the range of expectations.

“We remain as convinced as ever of the strong growth prospects for the business, and of our ability to deliver further returns of surplus cash to shareholders over the medium term.”

The firm , which sells the majority of its cards for under £1, is proving popular with customers who are tired of paying steep mark-ups on greetings cards. The group has extended its product range into new ranges of candles, picture frames, cushions and doorstops.

Card Factory benefits from in-house design, printing and warehousing, which significantly reduces external costs and keeps the price down.

It designs and manufactures cards in Yorkshire and also uses third party providers.