TIDMCARD
RNS Number : 3970H
Card Factory PLC
15 November 2018
15 November 2018
Card Factory plc ("Card Factory" or the "Group")
Trading update
Card Factory, the UK's leading specialist retailer of greeting
cards, dressings and gifts, announces its trading update for the
nine months ended 31 October 2018.
Key highlights
-- Year-to-date ("YTD") group revenue growth of +3.4% (2018: +6.7%)
-- YTD Card Factory like-for-like ("LFL") sales of 0.0% (2018: +3.5%)
-- Continued store roll out with 41 net new UK stores opened YTD
and on track to deliver approximately 50 net new UK openings in the
full year
-- Card Factory website delivered YTD revenue growth of +70.9% (2018: +44.6%)
-- Getting Personal YTD revenue reduction of 8.9% (2018: +3.8%)
-- Board's underlying EBITDA expectations for the full financial year remain unchanged at
GBP89m - GBP91m
* Comparator data set out in this announcement is for the 9
months ended 31 October 2017
Recent trading performance
In the nine months ended 31 October 2018, group revenue
increased by +3.4% (2018: +6.7%).
Third quarter Card Factory store LFL sales of +0.1% improved the
YTD store LFL to -0.5%, reflecting an improvement in the
performance of our core Everyday Card product category and
increased average spend. Card Factory website sales grew +47.3% in
the third quarter, bringing YTD Card Factory website growth to
+70.9%. Including the strong growth delivered by the Card Factory
website, overall Card Factory LFL performance for the quarter was
+0.4%, resulting in a flat YTD LFL performance (0.0%).
Sixteen net new UK stores were opened in the third quarter,
bringing YTD net new UK store openings to 41 with one new store in
Republic of Ireland. As a result, the total number of stores as at
31 October 2018 was 963 including seven trial stores in Republic of
Ireland. The business remains on track to deliver approximately 50
net new UK stores in the current financial year and has a solid
pipeline of new store opportunities for the next financial
year.
Getting Personal continues to face a market environment defined
by heavy discounting and increasing customer acquisition costs. The
business is focused on delivering profitable sales via lower cost
acquisition channels, and continues to be a profitable contributor
to the group.
Financial position
The Group remains cash generative, driven by robust operating
margins, limited working capital absorption and relatively low
capital expenditure requirements.
As at 31 October 2018, net debt, before deduction of capitalised
debt costs, totalled GBP172.0 million (2018: GBP156.0 million). The
GBP12.2 million increase since the FY19 interim results reflects
the planned build-up of stock for the forthcoming Christmas trading
period.
The 2.9 pence interim dividend and 5.0 pence special dividend
announced on 25 September 2018, amounting in total to c. GBP27
million, will be paid to shareholders on 14 December 2018.
Christmas trading and preliminary results announcements
The Group will announce its preliminary results for the year
ending 31 January 2019 on Monday 15 April 2019. In addition, a
post-Christmas trading update is planned for 10 January 2019.
Karen Hubbard, Card Factory's Chief Executive Officer, said:
"Despite the continuation of challenging high street trading
conditions, we delivered positive LFL sales in the third quarter,
marking a slight improvement on the LFL performance seen in the
first half. This reflected further growth in average spend and
improved performance of our redesigned Everyday ranges, in addition
to our growing Card Factory online business.
"The business faces reduced, but ongoing, external cost
pressures such as national living wage and foreign exchange-related
input cost increases; the latter is expected to ease in FY20. We
remain focused on mitigating these headwinds with our ongoing
programme of business efficiencies.
"Given our new ranges and our seasonal performance to date, we
approach our Christmas trading period with confidence. We also
remain positive about the growth prospects for the business over
the medium term."
ENDS
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
Simon Hockridge / Giles Robinson / Tim Rowntree
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 complementary products associated with
card giving occasions. Card Factory principally operates through
its nationwide chain of over 950 Card Factory stores, as well as
through its online offerings: www.cardfactory.co.uk and
www.gettingpersonal.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.
In the financial year ended 31 January 2018, the Group reported
revenue growth of 6.0% to GBP422.1m (FY17: GBP398.2m) and an
underlying EBITDA reduction of 4.6% to GBP94.0m (FY17: GBP98.5m) at
a margin of 22.3% (FY17: 24.7%).
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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