Despite Revenues Growing, EBITDA, PBT and EPS have all fallen.
Companies: Card Factory Plc
Card Factory (LON: CARD) has released its Interims for the six months to July 17, which have been impacted by foreign exchange, investment costs and a slip in footfall.
The high street card retailer reported a rise in revenues of 6% to £180m, yet PBT and underlying EPS fell 14%. Underlying EBITDA also fell 4% to £333m.
Shares fell 10% to 300p this morning as a result of the report.
Management said the erosion in profits was impacted by:
"Foreign exchange, national living wage and some of the important investments we are making in the business for longer-term growth."
Despite the slimmer margins, the Group is issuing an interim dividend of 2.9p, up from the 2.8p dividend issued in the same period last year. On top of this, a special dividend of 15p per share will be issued, a return of £51.2m to shareholders.
The Group is continuing to increase its high street presence, with 30 new sites opened during the period, including one trial site in Ireland and a further three since half-year end.
They also noted the potential in the online card market, which is estimated at around £100m, of which CARD's market share is currently <1%.
Management said they were "as convinced as ever of the strong growth prospects for the business" despite challenges in the wider consumer environment.
With a market cap of £1.2bn, Card Factory trades at a PE ratio of 17x versus the industry's 13x. In the five years to 2017, Revenue CAGR averaged 8% YoY and Net Profit CAGR averaged 51% YoY.