TIDMCARD
RNS Number : 5405B
Card Factory PLC
11 January 2018
11 January 2018
Card Factory plc ("Card Factory" or the "Group")
Trading update
A solid Christmas trading period
Card Factory, the UK's leading specialist retailer of greeting
cards, dressings and gifts, is pleased to announce a trading update
for the 11 months ended 31 December 2017.
-- Total year-to-date sales growth of 5.9% (11 months ended 31 December 2016: +4.3%)
-- Strong year-to-date like-for-like store sales growth of 2.7%
(11 months ended 31 December 2016: +0.4%), with solid performance
over the Christmas trading period
-- 48 net new UK stores opened in the period, with 50 net new stores expected by the year end
-- cardfactory.co.uk had a strong Christmas trading period from a low base
-- gettingpersonal.co.uk sales performance is broadly flat for the year to date
-- Continued margin pressure leading to expected underlying
EBITDA for the year to be in the range GBP93.0-GBP95.0m
Recent trading performance
The Group delivered a solid level of sales growth in the
Christmas period driven by a combination of like-for-like sales
growth and new store roll out. This has contributed to strong
year-to-date like-for-like store sales growth of 2.7% (11 months
ended 31 December 2016: +0.4%).
48 net new UK stores were opened in the period, bringing the
total UK estate to 913 stores as at 31 December 2017. In addition,
the Group opened six new trial stores in the Republic of Ireland
over the period. Looking ahead to our next financial year ending 31
January 2019, the Group has a good pipeline of new store
opportunities and we remain confident of continuing our historic
opening rate of approximately 50 net new UK stores per annum.
cardfactory.co.uk, our transactional site, continues to grow
strongly from a low base. Including sales from cardfactory.co.uk,
total Card Factory year-to-date like-for-like sales grew by 3.0%
(11 months ended 31 December 2016: +0.5%).
Sales performance over the Christmas period at
gettingpersonal.co.uk, our online personalised gifting business,
was disappointing which has resulted in a broadly flat sales
performance year to date.
Across the Group, like-for-like sales growth has been driven
primarily by lower margin non-card categories, such as gifts and
dressings, with card sales stable year on year. Given this, and the
previously announced margin pressures being experienced by the
Group, the Board currently expects underlying EBITDA for the
current year to be in the range GBP93.0-95.0m.
The Group continues to be highly cash generative.
Karen Hubbard, Card Factory's Chief Executive Officer, said:
"As I approach my second anniversary with the business, it is
pleasing to report that Card Factory has traded well through the
competitive Christmas trading period with customers once again
responding positively to our card and non-card ranges. As a result,
like-for-like store sales have improved in the year to date.
"As we have reported previously, the Group has faced significant
cost pressures in the year; these, together with the further change
in margin mix given the ongoing out-performance of lower-margin
non-card categories, are reflected in our expected outturn.
"We anticipate that the combined impact of foreign exchange and
wage inflation in FY19 will result in GBP7-8m of additional costs;
whilst we have plans to mitigate this impact as far as possible, we
recognise that against this backdrop, any EBITDA growth for the
year is likely to be limited. Looking further ahead, cost headwinds
should ease unless there is a further dramatic shift in
sterling.
"We believe that our market leading proposition, underpinned by
our unique vertically integrated model, provides our business with
significant competitive advantage."
Enquiries
Card Factory plc +44 (0) 203 128 8100
Karen Hubbard, Chief Executive Officer
Kris Lee, Chief Financial Officer
MHP Communications +44 (0) 203 128 8100
cardfactory@mhpc.com
Simon Hockridge / Giles Robinson / Nessyah Hart
Preliminary results announcement
Preliminary results for the year ending 31 January 2018 will be
announced on Tuesday 10 April 2018. There will be a presentation
for analysts at 9.30am at the offices of UBS, 5 Broadgate, London
EC2M 2QS. Those analysts who wish to attend are requested to
contact Nessyah Hart of MHP on the above number or at
cardfactory@mhpc.com. A copy of the presentation will be made
available on the Card Factory investor relations website
(www.cardfactoryinvestors.com).
Notes to Editors
Card Factory is the UK's leading specialist retailer of greeting
cards, dressings and gifts. It focuses on the value and mid-market
segments of the UK's large and resilient greeting cards market, and
also offers a wide range of other quality products, including small
gifts and gift dressings, at affordable prices. Card Factory
principally operates through its nationwide chain of over 900 Card
Factory stores, as well as through its online offerings:
www.gettingpersonal.co.uk and www.cardfactory.co.uk.
The Group's clear strategy is focused on four pillars of
growth:
- continuing to grow like-for-like sales in existing stores;
- continuing to roll out profitable new stores;
- continuing to focus on delivering business efficiencies; and
- increasing penetration of the complementary online market.
Card Factory commenced operations in 1997 with just one store
and has expanded its store estate primarily through organic growth
into a market-leading value retailer with a nationwide presence.
The Group's stores are in a wide range of locations including on
high streets in small towns through to major cities, shopping
centre developments, out-of-town retail parks and factory outlet
centres.
Since 2005, Card Factory has developed a vertically integrated
business model with an in-house design team, an in-house printing
facility and central warehousing capacity of over 360,000 sq. ft.
This model differentiates the Group from its competitors by
significantly reducing costs and adding value to customers in terms
of both price and quality, underpinning the Group's motto: "Trusted
for quality and value to help celebrate everyone's life
moments".
In the financial year ended 31 January 2017, the Group achieved
revenue growth of 4.3% to GBP398.2 million (FY16: GBP381.6 million)
and underlying EBITDA growth of +3.8% to GBP98.5 million (FY16:
GBP95.0 million) at a margin of 24.7% (FY16: 24.9%).
Cautionary Statement
This announcement is based on information from unaudited
management accounts and contains certain forward-looking statements
with respect to the financial condition, results of operations, and
businesses of Card Factory plc. These statements and forecasts
involve risk, uncertainty and assumptions because they relate to
events and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results or
developments to differ materially from those expressed or implied
by these forward-looking statements. These forward-looking
statements are made only as at the date of this announcement.
Nothing in this announcement should be construed as a profit
forecast. Except as required by law, Card Factory plc has no
obligation to update the forward-looking statements or to correct
any inaccuracies therein.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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