Annual Financial Report & AGM Notice

Card Factory PLC

16 May 2024

 

16 May 2024

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 2024 and Notice of the Company's 2024 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 20 June 2024. 

Copies of the documents listed below (or notifications of electronic access to these documents) have been posted to shareholders on Wednesday 15 May 2024:

1.      Annual Report and Accounts 2024;

2.      Notice of 2024 Annual General Meeting; and

3.      Form of Proxy for the 2024 Annual General Meeting.

The Annual Report and Accounts; the Notice of the 2024 Annual General Meeting and the proposed rules of the Card Factory Long Term Incentive Plan and the proposed rules of the Card Factory plc Save As You Earn Scheme are accessible via the Company's investor relations website www.cardfactoryinvestors.com. In compliance with LR 9.6.1, the Company has 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 30 April 2024 (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 2024, 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 2024.

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 65 to 68 of the Strategic Report and also pages 78 and 79 of the Corporate Governance Report within the Annual Report and Accounts 2024 ("Annual Report").

Risk	Description	Mitigation
Strategic Risks
ESG compliance and climate change risks	Failure to meet requirements of Institutional Investors, customers and other stakeholders on ESG requirements may have an adverse impact on our colleagues, customers, suppliers and our reputation which could lead to a decline in sales and profits.	• 'Delivering a Sustainable Future' plan launched which outlines our sustainability strategy. The strategy is built around four key areas where we want to deliver a positive impact: climate, waste & circularity, protecting nature and people & equity. • Each pillar has a roadmap, detailing commitments and targets with owners assigned. • Various other actions in relation to ESG can be found on pages 32 to 39 of the Annual Report.
Operational Risks
IT infrastructure and security	Outdated, unsupported IT systems and software could expose the business to security incidents, unauthorised access and data breaches resulting in fines/ censure/outages/disruption/lost sales/ revenue etc.	• An IT strategy is in place that includes the approach being taken regarding the removal / migration of out of date / legacy systems, including ringfencing systems to provide an additional layer of security. Also, IT specialists support out of date / legacy systems and back up arrangements and an IT disaster recovery plan is in place.
Business continuity	Significant disruption to the operation, including support centre, distribution centres, the Printcraft site, design studio and IT systems could severely impact the Group's ability to supply stores and retail partners or fulfil online sales resulting in financial loss, fines, loss of sales and/or reputational damage.	• A 'Business Continuity Management Framework' and a 'Business Continuity Policy' are in place, which are reviewed annually and approved by the senior management team. • 'Crisis Management Plan' and business continuity plans are in place for all operations of the business which are reviewed annually or when major changes to processes occur or incidents arise. These plans include business impact analysis, crisis response teams, recovery techniques, resources etc. • An IT disaster recovery plan is in place for all operations of the business which is reviewed annually or when major changes to processes occur or incidents arise. • The business continuity and IT disaster recovery plans are tested annually with lessons learned being produced and plans updated accordingly.
Cyber	Prolonged loss or disruption to IT capability which could result in unauthorised access/data breaches, void of insurance cover, malware, ransomware, significant IT disruption, fines for negligence by the ICO, legal prosecution from customers, settlements, leading to a loss of sales, reduction in share price and lack of confidence by shareholders.	• The IT strategy includes our approach regarding the removal / migration of out of date / legacy systems as noted in the IT Infrastructure and Security risk. • Point of Sale meets all payment card industry (PCI) compliance requirements and PCI training is refreshed annually and completion rates tracked. • Two-factor authentication (2FA) has been implemented across the majority of our systems. • 'Bring Your Own Device' policy approved and in place with a mobile device management system rolled out to senior management and 2FA in place for password changes. • 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. • Data Protection Officer in place. • Crisis management and IT disaster recovery plans in place for all operations of the business which are reviewed annually or when major changes to processes occur or incidents arise.
Supply Chain	The Group uses many third parties for the supply of products, predominantly based in China. Risks include the potential for supplier failures, risks associated with manufacturing and importing goods from overseas, potential disruption at various stages of the supply chain and suppliers failing to act or operate ethically which could result in unavailability of stock leading to reduced sales.	• Multiple suppliers utilised across product and category ranges to off-set supply or cost pressures. • Detailed critical path process in place for each season detailing plans from design through to delivery, which is reviewed weekly and actions taken if issues arise. • All overseas suppliers sign up to an online compliance platform providing all necessary documentation including adherence to the Modern Slavery Act. • External and ethical audits and Sedex membership performed with a 'no audit, no order' policy. • All product testing and quality control inspections undertaken by authorised accredited providers. • Active monitoring of shipping channels and when issues arise these are discussed by the senior management team as to potential impact with plans drawn up to off-set any delays in goods being received. • Multiple shipping agents and lines are utilised.
Regulatory compliance	The Group is exposed to a diverse number of legal and regulatory compliance requirements including Modern Slavery Act, the General Data Protection Regulation (GDPR), Listing Rules, employment law, tax, FSC, product safety, competition law, etc. Failure to comply with these laws and regulations could lead to financial claims, penalties, awards of damages, fines or reputational damage which could significantly impact the financial performance of the business.	• Compliance responsibilities matrix in place detailing all compliance-related matters across the organisation with assigned owners. • Ongoing review of regulatory changes monitored by relevant owners to identify developments and ensure changes to operations, processes, training, as applicable. • External advisers in place who provide ad hoc information updates or highlight changes to existing legislation or new regulations coming into force that may impact the organisation. • Access to external bodies who provide updates on specific regulations e.g. product labelling and product safety. • Governance, Listing Rules, DTRs, Market Abuse etc. overseen by the General Counsel. • Quality assurance process in place to ensure that products comply with legal / ethical regulations / legislation etc.
Financial Risks
Geopolitical instability	Geopolitical instability may result in cardfactory being unable to secure the products required to fulfil customer demand on time and at acceptable prices. This could result in customer dissatisfaction, reputational impact, loss of market share, loss of sales and erosion of expected profit margins.	• Continual review of supply base to understand best route to market (and to protect prices and impact on trading performance) including options to move supply to new territories and using UK-based suppliers to assist in mitigating any supply issue. • Price elasticity assessments undertaken to provide insights on consequences of future price increases. • Review of import tariff duties and 'live' Government legislative changes in the UK and new territories to ensure we are always sourcing from the best source to support the overall business. • Continual review of global matters that may affect supply.
Cost price inflation	Increasing input costs without mitigating actions will either result in lower levels of profitability/generation of cash or forces higher prices resulting in possible impact on value perception and/or customers choosing to buy elsewhere.	• Input costs are monitored and proactive plans are developed as part of the annual planning and monthly review process to mitigate cost price inflation. • Hedging in place for foreign exchange, interest and energy; policies reviewed annually and hedging position reviewed monthly. • Management of freight rates process in place and market monitored to identify any potential increases so that these can be factored into pricing decisions.

Directors' Responsibility Statement

The Annual Report and Accounts 2024 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 2024 are set out in note 28 of the financial statements on page 153 of the Annual Report and Accounts.

 

END