Annual Financial Report & AGM Noticce

Card Factory PLC

19 May 2023

 

19 May 2023

Card Factory plc

Annual Financial Report and Notice of AGM

Card Factory plc ("cardfactory" or the "Company") announces that it has published its Annual Report and Accounts for the year ended 31 January 2023 and Notice of the Company's 2023 Annual General Meeting.

The Annual General Meeting is to be held at the Company's registered office, at Century House, Brunel Road, Wakefield 41 Industrial Estate, Wakefield, WF2 0XG at 11.00 a.m. on Thursday 22 June 2023. 

Copies of the documents listed below have been posted to shareholders on Thursday 18 May 2023:

1.      Annual Report and Accounts 2023;

2.      Notice of 2023 Annual General Meeting; and

3.      Form of Proxy for the 2023 Annual General Meeting.

The Annual Report and Accounts and the Notice of the 2023 Annual General Meeting will also be accessible later today via the Company's investor relations website www.cardfactoryinvestors.com. In compliance with LR 9.6.1, the Company has today submitted electronic copies of the above documents to the National Storage Mechanism appointed by the Financial Conduct Authority and these will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

cardfactory's preliminary results announcement on 3 May 2023 (which is available via the Company's investor relations website referred to above) included, in addition to the preliminary financial results for the year ended 31 January 2023, information on important events that occurred during the year and their impact on those financial results. That information, together with the information set out in the Appendix below is provided in compliance with the requirements of DTR6.3.5(2)(b). This information is not a substitute for reading the full Annual Report and Accounts for the year ended 31 January 2023.

For further information:

Ciaran Stone, Group General Counsel and Company Secretary Card Factory plc

Tel: [phone]

ENDS

Appendix

Principal Risks and Uncertainties

The principal risks and uncertainties facing the cardfactory group (the "Group") are set out below, together with details of how these are currently mitigated. For further information on how the Group manages risk, see pages 58 to 62 of the Strategic Report and also pages 72 and 73 of the Corporate Governance Report within the Annual Report and Accounts 2023 ("Annual Report").

Risk	Description	Mitigation
Strategic Risks
ESG compliance and climate change risks	Failure to meet requirements of institutional investors, customers and other stakeholders when it comes to ESG requirements, including provision of sustainable products and reducing waste and plastics (includes climate change risks).	An ESG strategy has been devised with five key work streams. Management will focus on these to achieve the ambition of growing the business in a socially and environmentally responsible way. Various actions in environmental and social have been implement. Please refer to the ESG section of the Annual Report on pages 36 to 43 for further actions being taken.
Adapting to customer preferences	Failure to anticipate and adapt to changes in customer preferences and shopping habits, market dynamics and competitor activity-channel shift.	Broader delivery of the overarching commercial strategy must ensure continual adaptation to changing customer preferences; in store, online and through our business partners. Historically, the business has had limited access to meaningful customer and marketing insight to drive improved decision making. The creation of a marketing and insight function has improved decision making. The commercial planning process continually reviews and responds to changing customer purchasing behaviour. As the business becomes fully omnichannel, the customer demands for fulfilment and service will increase as a connected, seamless experience becomes an expectation rather than a desire. In response, Click & Collect and multi-ship have been rolled out. Future developments are being scoped.
Brand customer experience	Failure to manage and promote the brand which could result in loss of market share.	Brand strategy in place which fully articulates cardfactory brand proposition and strategic framework to elevate the brand's key attributes and to create clarity around the omnichannel proposition with cross channel campaigns being developed to support awareness and growth including celebrate life's moments. We have significantly improved customer insight and data which is shaping our thinking and decision making across the business and we have invested in, trialled and launched a customer Service Excellence programme, which will continue to evolve. Market data shows that cardfactory has been successful in retaining and attracting customers through the strength and value for money we offer coupled with an increase in range and sales of gifts and celebration essentials. Additionally, the communication plan has a focus on investor relations with an increased focus on working with Corporate Affairs agency to proactively tell the cardfactory story. See the 'Our brand' section on pages 12 and 13 of the Annual Report for further information on our activities.
Operational Risks
Enterprise Resource Planning (ERP) implementation	Undergoing a design and phased implementation of a new ERP systems to replace aging core IT infrastructure. This process carries inherent risks, including potential business disruption, data loss, inability to achieve expected benefits, and failure to provide the necessary foundation for executing our strategic plan. Key aspects of this plan include developing an omnichannel customer experience, enhancing engagement with retail partners, and driving operational efficiencies in stores.	To minimise these risks, we have successfully completed the initial implementation phase, which encompassed finance and master data without any material disruption. We have also restructured the project to adopt a more incremental approach, which allows for smoother transitions between phases, reduced reliance on vulnerable legacy systems during peak trading seasons, and enables the achievement of critical strategic plan components. Furthermore, we have increased our focus on business process engineering, dedicated resources and change management strategies to support a successful ERP implementation.
IT infrastructure and security	Unsupported and legacy software, some of which is subject to material tailoring, requires ongoing support to maintain functionality and significant transactional volumes. There is a reliance on IT systems to support all operations, which could be exposed to cyber risk.	The IT strategy implementation includes ongoing specialist support for legacy systems and migration to new systems, including the ERP implementation with dedicated teams in place to manage the transition. Cyber expertise is employed within the business and appropriate cyber controls are in place. Plans designed to continue to address multiple cyber risks, alongside further risk mitigations arising from replacement of legacy systems, are also in place.
Business continuity	Prolonged loss or server disruption to Printcraft print and production facilities, web fulfilment centre and supply chain.	A business continuity and disaster recovery plan is in place, which includes the use of alternative suppliers for any impacted production processes. In relation to online fulfilment, any short-term outages can be mitigated by adjustment of delivery times for online orders. Business continuity plans are in place, which include the use of third parties. Planning permission has been obtained and groundworks completed on an additional building to create capacity for online fulfilment, to relieve capacity constraints.
Supplier CSR breach	Supplier CSR breach resulting in a potential breach of legislation (eg. Modern Slavery, Anti Bribery & Corruption) and for products supplied (eg. Safety and labelling standards), which could damage cardfactory's reputation and reduce sales.	Processes for suppliers to agree to appropriate standards, which are subject to regular audit and inspection by cardfactory teams (or receipt of alternative adequate independent report) to validate compliance, with a strict 'no audit - no order' policy adopted. Testing and pre-shipment sampling of production models is being undertaken. All product testing and quality control inspections is undertaken by authorised accredited providers. A dedicated quality control team is in place to test pre-shipment sampling of production models. The risk profile for most suppliers to Getting Personal is significantly lower, with limited supplies from the Far East. Plans are being developed to extend the quality control and technical teams' scope to include these suppliers with adoption of appropriate requirements to mitigate risks.
Retail partner exposure	cardfactory may not realise the growth in profitable revenue from retail partners, which is a significant component for future growth of the business and the brand or reputation could be damaged by the actions of retail partners.	A business development team has been formed to build relationships with existing partners and develop a pipeline of future partners. Brand standard requirements are in place to provide a clear framework for partners, with regular reviews adopted. Enhanced requirements will be incorporated in any future retail partner requirements.
Financial Risks
Geopolitical instability	Geopolitical instability leading to restrictions on trade Suppliers: Operating with a supply base whereby we have the total business or specific categories solely dependent on one supplier, region or country carries significant stock supply risk. China remains our biggest supply route. Customers: Restrictions on supply from certain countries may impact availability and retail selling prices. Geographies and governments: New legislation and import tariffs may force resourcing decisions.	Suppliers: - Diversifying the supply base by bringing more production back to the UK while also exploring other geographical territories. - Buyers have extensive industry knowledge, know of alternative suppliers if mitigation needs arise and manage any supply issues or problems. Customers: Moving supply to new territories and using UK-based suppliers (non-exclusive product) will mitigate the supply issue at the shelf edge, but could potentially drive increased cost, with price elasticity assessments to provide insights on consequences of future price increases. Geographies and governments:  Continual review of the import tariff duties and 'live' government legislative changes to ensure we are always sourcing from the best source to support the overall business.

Directors' Responsibility Statement

The Annual Report and Accounts 2023 contains a statement of directors' responsibility by Darcy Willson-Rymer, Chief Executive Officer, by order of the Board in the following form:

"We confirm that to the best of our knowledge:

·      the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

·      the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy."

Related Party Transactions

Details of the only material transactions with related parties during the financial year ended 31 January 2023 are set out in note 28 of the financial statements on page 142 of the Annual Report and Accounts.

 

END