Retailer opened 51 new stores and saw revenues rise 4.3%, but profits fell due to lower footfall
Companies: Card Factory Plc
One of the UK's largest card retailers, Card Factory, has hiked its ordinary dividend and confirmed a 15p special dividend in its final results, despite seeing pre-tax profit fall 1.1% following "good performance" but lower footfall in a challenging retail market during the past 12 months.
The retailer saw revenue increase 4.3% to £398m after LFL sales growth from existing stores and contributions from its 51 new stores that opened during the period. Its estate now totals 865, with a "strong pipeline" for further stores in FY18.
However, growth in sales slowed considerably on the previous year, falling to 0.6% from 3% overall and to 0.4% from 2.8% in existing stores. This, the retailer says, was due to lower levels of footfall in the retail market.
The FTSE 250 company enjoyed a decent Christmas period with sales for the fourth quarter expected to be in the historical range of 1-3%. On an underlying basis, pre-tax profit and EPS both increased 3.8% to £98.5m and 19.8p respectively.
The city was forecasting slightly higher revenues of £400m, but slightly lower PBT of £82.41m. Consensus is expecting better growth in the next two years of 5.7% each year, with 2% and then 6% EPS growth during that time.
CEO Karen Hubbard said she had undertaken a review of the business since joining last year, adding that the business' existing "four-pillar" strategy (Online development, Business efficiencies, New store roll out, and LFL sales growth) was working, but that she believed there were further opportunities to explore:
"Over the last year, it is that established strategy which has allowed us to deliver a good performance in a challenging retail market. Our store LFL sales remained positive and our business continued to deliver best-in-class margins whilst remaining highly cash generative, allowing another 15p special dividend to be paid to shareholders in 2016.
Whilst the new financial year is only two months old and seasonal sales patterns are distorted by Easter and Mother's Day falling three weeks later than last year, we are pleased with everyday like-for-like sales in the year to date. I look forward to providing a further trading update at our AGM in May."
Shares in Card Factory opened flat on Tuesday, currently trading at a price/earnings ratio of 14.3.