Interim Management Statement

RNS Number : 7288W

Card Factory PLC

12 November 2014

 



12 November 2014

Card Factory plc ("Card Factory" or the "Group")

Interim Management Statement

Card Factory, the UK's leading specialist retailer of greeting cards and related gifting items, is pleased to announce its interim management statement for the period from 1 February 2014 to date.  Operational and financial information relates to the nine months ended 31 October 2014 unless stated otherwise.

Key highlights

·     Ongoing positive growth in like-for-like sales from existing store estate

·     Continued new store roll out with 48 net new stores opened

·     Strong pipeline of future new store opportunities for the next financial year

·     Further development of complementary online division

·     Appointment of Tim Lloyd as Property Director

Recent trading performance

The Group continues to trade in line with the Board's expectations.

In the nine months ended 31 October 2014, revenue increased by 8.7%, driven by a combination of like-for-like sales growth, new store roll out and further growth in the complementary online division.  This growth rate is similar to that delivered in the nine months ended 31 October 2013 (9.0%).

With 12 net new stores opened in the third quarter, a total of 48 net new stores have been opened in the year to date, bringing the total estate to 761 stores as at 31 October 2014.  We remain on track to deliver approximately 50 net new stores in the current financial year, and we remain confident of the potential to expand the store portfolio to up to 1,200 stores in total, for which we already have identified locations.

Looking ahead to our next financial year ending 31 January 2016, the Group has a strong pipeline of additional new store opportunities and we remain confident of successfully continuing our historic opening rate of approximately 50 net new stores per annum. 

Both our retail brands, Card Factory and Getting Personal (www.gettingpersonal.co.uk), are well prepared and positioned for the forthcoming Christmas trading period.

Financial position

The Group remains highly cash generative before financing activities.

As at 31 October 2014, net debt was at a similar level to that reported at the interim stage reflecting ongoing monthly profit generation offset by the build up of stock for the forthcoming Christmas trading period.

The Board expects to report a further reduction in this net debt position at the year end.

Management

We are also pleased to announce the appointment of Tim Lloyd as Property Director.  Tim is a qualified surveyor and a retail-focused property agent.  Having previously been a partner at Fawcett Mead, he has worked with Card Factory since 2003 when our portfolio consisted of only 40 stores.  In addition to his extensive knowledge of the high street and property market, Tim is very familiar with our business model, the existing store estate and future roll out pipeline.

Investor site visit

Card Factory is hosting a site visit for investors tomorrow, Thursday 13 November, including a tour of the Group's design studio and printing operation and a visit to local stores.  No new material financial or other information will be provided during the visit.

Christmas trading and preliminary results announcements

The Group will announce its preliminary results for the year ending 31 January 2015 on 25 March 2015, with a short trading statement to be issued in mid January.

Richard Hayes, Card Factory's Chief Executive Officer, said:

"The Group continues to perform well with growth coming from the existing store estate and new store roll out programme as well as our smaller but developing online proposition.

"We continue to develop our product range and remain very focused on delivering a strong and clear value proposition to our customers.

"As we enter the important Christmas trading period, the Group is well positioned for further growth and we look forward to updating investors on our progress in the New Year."

ENDS

Enquiries                            

Card Factory plc	[phone]
Richard Hayes, Chief Executive Officer
Darren Bryant, Chief Financial Officer
MHP Communications	[phone]
John Olsen
Simon Hockridge

Notes to Editors

1.    Background information

Card Factory is the UK's leading specialist retailer of greeting cards and related gifting items. It focuses on the value and mid-market segments of the UK's large, resilient and growing 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 750 Card Factory stores, as well as through its online offerings: www.gettingpersonal.co.uk (which sells personalised cards and gifts) and www.cardfactory.eu.com (which sells a selection of the products available in Card Factory stores).

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.

Over the last 10 years, 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 external costs and adding value to customers in terms of both price and quality, underpinning the Group's motto: "compare the quality, compare the price".

Card Factory sold over 285 million single cards in the financial year ended 31 January 2014. In that year, the Group achieved revenue growth of 9.0% to £326.9 million and underlying EBITDA growth of 9.2% to £80.4 million (2013: £73.6 million) at a margin of 24.6%.

2.    Like-for-like definition

The Group defines like-for-like sales as the year-on-year growth in sales for Card Factory stores which have been opened for a full year, calculated on a calendar week basis.  As such, this reported like-for-like sales figure excludes sales:

• relating to Card Factory stores that have not yet been open for a full 52 weeks;

• from the Card Factory transactional website, www.cardfactory.eu.com;

• made via the separately branded personalised card and gift website, Getting Personal;

• by Printcraft, the Group's printing division, to external third-party customers; and

• from stores closed for all or part of the relevant period (or the prior year comparable period).

As highlighted in the IPO prospectus, like-for-like sales in the year ended 31 January 2014 benefitted to a small degree from the administration of a competitor in May 2012.

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.

 

END

 

 

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