- Everyday card ranges lift revenue growth
- Ability to mitigate cost inflation
- Opening more stores, expansion in Republic of Ireland
Shares in Card Factory (CARD) fell more than 5% to 105p despite reporting a 6.7% increase in like-for-like (LFL) revenue growth for the year ending 31 January 2023.
For context, the shares had enjoyed a strong run ahead of these results and today's weakness could represent some profit taking.
The UK specialist retailer reported pre-tax profit of £52.4 million compared to £11.1 million in the same period last year.
The pre-tax profit includes a one-off benefit associated with a CJRS (Coronavirus Job Retention Scheme) settlement of £2.5 million and a one-off benefit related to refinancing its debt facilities of £1 million.
HIGH STREET BOOST BUT ONLINE SALES KNOCKED
Year-on-year sales for its online operation fell 18.8% due to a combination of customers returning to the high street and the impact of the Royal Mail Strikes during the Christmas trading period. However, online sales were significantly up compared to pre-pandemic levels up 86.4% on a three-year LFL basis.
As part of its capital markets strategy, Card Factory has outlined a pathway for revenues of around £650 million and margins of around 14% in the full year 2027, supported by a capital investment plan of £24 million a year, over the next three years.
‘MUCH MORE TO COME’
Liberum analyst Adam Tomlinson commented: ‘The in-line prelims reflect the strong recovery in profitability (noting three upgrades since November) and free cash flow generation. Combined with good progress across all pillars of the strategy, including significant new retail partnerships, this has given management confidence to aim for revenue of £650 million by the 2027 financial year on a pre-tax profit margin of around 14%, representing a return to pre-pandemic margins.
‘It provides confidence that there is much more to come as Card Factory continues to transition from a store-based card retailer into a leading, omni-channel retailer of cards and gifts.’
LEARN MORE ABOUT CARD FACTORY
