TIDMCARD
RNS Number : 1358B
Card Factory PLC
05 June 2019
For release at 7.00am on 5 June 2019
5 June 2019
Card Factory plc ("Card Factory" or the "Group")
Q1 Trading Update
Positive like-for-like sales performance in a challenging
consumer environment
Card Factory, the UK's leading specialist retailer of greeting
cards, dressings and gifts, announces a trading update for the
quarter ended 30 April 2019 to coincide with its Annual General
Meeting to be held later today.
Key highlights
-- First quarter total Group sales growth of +6.4%
-- Card Factory like-for-like ("LFL") sales +2.3%
-- Continued store roll out with 14 net new stores opened (Q1 FY19: 10)
-- Strong cash generation
-- Board's expectations for the full financial year remain unchanged
Trading
Card Factory's total and positive LFL sales performance
represents an encouraging start to the year, although in part
reflects the weakness in the comparator period. In the context of
the continued challenging consumer environment, this performance
illustrates the strength of our quality and value offer and the
ongoing work to re-design and refresh products. Seasonal card and
everyday non-card ranges performed well in the quarter.
The opening of 14 net new UK stores (Q1 FY19: 10) in the quarter
brings the estate to 979 stores (including seven stores in the
ROI). We remain on track to open approximately 50 net new stores in
the current financial year. This includes a number of stores in the
Republic of Ireland and on retail parks, in both of which our
stores continue to perform well.
CardFactory.co.uk has had a good start to the year with
continued revenue growth, driven by the success of new ranges and
designs in both personalised and non-personalised products.
The trading performance at Getting Personal has continued to be
impacted by a market environment of heavy discounting and
increasing customer acquisition cost.
Financial position
The Group remains highly cash generative, driven by its strong
operating margins, limited working capital absorption and
relatively low capital expenditure requirements.
As at 30 April 2019, before the forthcoming payment of the
proposed final dividend for FY19 of GBP21.9m (FY18: GBP21.9m), net
debt was GBP151.3m (30 April 2018: GBP147.7m), each before the
deduction of capitalised debt costs.
Outlook
Card Factory has seen a positive start to the year. Considering
the uncertain macro outlook and the continuation of challenging
consumer conditions, and with the key trading periods still to
come, the Board expects LFL sales for the year to be marginally
positive, with full year profit expectations remaining
unchanged.
Karen Hubbard, Card Factory's Chief Executive Officer, said:
"We have had a positive start to the year with like-for-like
sales growth despite challenging consumer sentiment and negative
footfall on the High Street. We have seen a good customer reaction
to our seasonal card ranges over the quarter, with yet again record
card sales in volumes and value for both Valentine's Day and
Mother's Day. We continue to improve the range and quality of card
and non-card options. Our store opening programme remains on track
and we are pleased with the performance of recent openings.
"Overall, Card Factory remains in a strong position, continuing
to grow market share, with lessening cost headwinds and a platform
for medium term growth."
ENDS
Enquiries
Card Factory plc via Tulchan Communications (below)
Karen Hubbard, Chief Executive Officer
Kris Lee, Chief Financial Officer
Tulchan Communications +44 (0) 207 353 4200
James Macey White / Elizabeth Snow / Amber Ahluwalia cardfactory@tulchangroup.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 950 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 UK presence
and in the Republic of Ireland. 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: "quality
and value for all of life's moments".
In the financial year ended 31 January 2019, the Group achieved
revenue growth of +3.3% to GBP436.0 million (FY18: GBP422.1
million) and underlying EBITDA decrease of -4.9% to GBP89.4 million
(FY18: GBP94.0 million) at a margin of 20.5% (FY18: 22.3%).
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
Authority to act as a Primary Information Provider in the United
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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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