Sales grow at Card Factory as firm sets sights on more store openings

Sales at Wakefield-headquartered Card Factory grew 6.7% in the last nine months and the firm also opened 38 new stores in the timeframe. 

In a trading update for the nine-months to 31 October, the company said its sales performance was driven by growth in lower margin non-card categories, like gifts. Over the 12 month period, it expects to open 50 stores in the UK – its historical target of shop openings per year.

With the latest store additions, Card Factory now has 903 shops across the country and says its online shops, which are being led my new management teams, are also continuing to grow.

The group remains highly cash generative, driven by its strong operating margins, limited working capital absorption and relatively low capital expenditure requirements.

As of 31 October, before deduction of capitalised debt costs, net debt totalled £156m, up from £128m at 31 October 2016. This is higher than that reported in the interim results and the firm said it reflected the planned build-up of stock for the Christmas trading period.

Karen Hubbard, Card Factory’s chief executive, said: “We have had good third quarter sales, continuing the momentum seen over the first half of the year, with strong growth in revenue from lower margin non-card categories, such as gifts and dressings.

“The business faces ongoing external pressures such as foreign exchange and national living wage, which will continue to impact our margin for the remainder of the year and into FY19, despite the mitigation initiatives we have put in place.

“Nevertheless, we go into the important final quarter with an exciting and extended Christmas offer and remain confident that our quality and value credentials will continue to resonate well with our customers, with the added benefit of EPOS and contactless in every store.”

The 2.9 pence interim dividend and 15 pence special dividend announced on 26 September will be paid to shareholders on 15 December.

The group will announce its preliminary results for the year ending 31 January 2018 on Tuesday 10 April 2018, with a short trading statement to be issued in January.

Click here to sign up to receive our new South West business news...
Close