Trading Statement

RNS Number : 1454V

Card Factory PLC

26 January 2017

 

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

Trading update

A good Christmas trading period, with improved like-for-like performance

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 2016. 

Key highlights

·      A good Christmas trading period against a strong prior year comparative

·      Like-for-like store sales returned to growth within historic range in final quarter of the financial year

·      Year-to-date like-for-like store sales growth improved to +0.4% (11 months ended 31 December 2015: +2.8%)

·      Total year-to-date sales growth of +4.3% (11 months ended 31 December 2015: +8.1%)

·      51 net new stores opened in the period in line with historic and projected roll-out rate

·      The Board is confident of delivering full year underlying profit before tax for the current financial year slightly ahead of analyst consensus*

Recent trading performance

The Group delivered a good level of growth in the Christmas period driven by a combination of like-for-like sales growth and new store roll out. 

Year-to-date like-for-like store sales growth improved to 0.4% (11 months ended 31 December 2015: +2.8%).  Against a strong prior year comparative, Card Factory stores delivered a good Christmas trading performance with cumulative like-for-likes for the fourth quarter of the financial year returning to the historic range of 1% to 3%.

cardfactory.co.uk, our transactional site, continues to grow from a low base.  Including sales from cardfactory.co.uk, total Card Factory year-to-date like-for-like sales grew by 0.5% (11 months ended 31 December 2015: +3.0%).

As previously reported, having grown significantly over the previous two years, sales performance at gettingpersonal.co.uk, our online personalised gifting business, has been disappointing this year and continues to be broadly flat.  We continue to target medium term sales growth of at least 10% per annum for this business.

51 net new stores were opened in the period, bringing the total estate to 865 stores as at 31 December 2016.  Looking ahead to our next financial year ending 31 January 2018, the Group has a good pipeline of additional new store opportunities and we remain confident of continuing our historic opening rate of approximately 50 net new stores per annum. 

The Group continues to be highly cash generative.

*     The Board believes that the range of analysts' expectations for underlying profit before tax for the year to 31 January 2017 is currently £80.9m to £83.0m with consensus, based on a simple average, of £81.9m.

Karen Hubbard, Card Factory's Chief Executive Officer, said:

"As I approach my first 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 well to our card and non-card ranges.  As a result, like-for-like store sales in the fourth quarter of the financial year have returned to our expected range.

"Whilst all retailers will clearly face cost pressures in 2017, the proven strength of our retail proposition, underpinned as ever by our unique vertically integrated model, provides our business with significant competitive advantage.  We believe that this will enable us to further increase our market share as we have done every year since the business was formed in 1997."

ENDS

Enquiries

Card Factory plc                        (via MHP, below)

Karen Hubbard, Chief Executive Officer

Darren Bryant, Chief Financial Officer

MHP Communications                [phone]

John Olsen

Simon Hockridge                        

Nessyah Hart

Preliminary results announcement

Preliminary results for the year ending 31 January 2017 will be announced on Tuesday 28 March 2017.  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 [e-mail].  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 850 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: "compare the quality, compare the price".

In the financial year ended 31 January 2016, the Group achieved revenue growth of 8.0% to £381.6 million (FY15: £353.3 million) and underlying EBITDA growth of +7.7% to £95.0 million (FY15: £88.2 million) at a margin of 24.9% (FY15: 25.0%).

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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