Trading Update

RNS Number : 4142F

Card Factory PLC

12 November 2015

 

12 November 2015

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

Trading Update

Card Factory, the UK's leading specialist retailer of greeting cards, dressings and gifts, is pleased to announce a trading update for the nine months ended 31 October 2015. 

Key highlights

·      Total sales growth of +7.9% (9 months ended 31 October 2014: +8.7%)

·      Continued store roll out with 45 net new stores opened (9 months ended 31 October 2014: 48)

·      Further development of both Getting Personal and Card Factory transactional websites

·      Board's expectations for the full financial year unchanged

Recent trading performance

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

In the nine months ended 31 October 2015, revenue increased by +7.9%, driven by a combination of like-for-like sales growth, new store roll out and further growth in our complementary online activities.  Our like-for-like sales growth continues to benefit from the innovation of our Design Studio with ongoing improvements in the quality and breadth of both card and non-card ranges.

Nine net new stores were opened in the third quarter, bringing a total of 45 net new store openings in the year to date.  This brings the total estate to 809 stores as at 31 October 2015.  We remain on track to deliver approximately 50 net new stores in the current financial year and have started to build a strong pipeline of additional new opportunities for the next financial year.  We remain confident of continuing our historic opening rate of approximately 50 net new stores per annum. 

Our principal online business, Getting Personal (www.gettingpersonal.co.uk), has continued to demonstrate good levels of growth in the third quarter although the business is now facing more challenging comparative figures having delivered 27.1% revenue growth in the second half of last year. As highlighted in our interim results, whilst we continue to target double digit revenue growth for Getting Personal for the remainder of the year, we expect that this will be at a lower level than the 24.9% revenue growth achieved in the first half.

The trial of the recently relaunched Card Factory transactional website is ongoing and we are pleased with progress to date.  Over the quarter we have introduced ranges of personalised cards and gifts to the website, the first time we have offered such products under the Card Factory banner.   We continue to believe that there is potential to grow this channel's revenues over the medium term from its current small base.

Financial position

The Group remains highly cash generative.

As at 31 October 2015, net debt was marginally higher than that reported in the interim results reflecting the build-up of stock for the forthcoming Christmas trading period.

The 2.5 pence interim dividend and 15 pence special dividend announced on 22 September will be paid to shareholders on 27 November.

Christmas trading and preliminary results announcements

The Group will announce its preliminary results for the year ending 31 January 2016 on Tuesday 5 April 2016, with a short trading statement to be issued in January.

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

"We have seen another period of consistent performance across the Group as we continue to drive growth from existing and new stores, as well as our expanding online operations.  We are well prepared for the important, competitive Christmas period, and remain confident of our ability to continue to increase market share whilst delivering on all four pillars of our growth strategy."

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

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 800 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.

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 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 2015, the Group achieved revenue growth of 8.1% to £353.3 million (FY14: £326.9 million) and underlying EBITDA growth of 9.6% to £88.2 million (FY14: £80.4 million) at a margin of 25.0% (FY14: 24.6%).

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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