card factory has posted strong results following its May listing, with continued store openings and strong online growth.
Revenues at the specialist retailer rose 8.9 per cent to £149.4m in the six months to end of July.
Underlying profit climbed 9.3 per cent to £26.1m for the period, while like-for-like sales rose 2.6 per cent.
The Wakefield-based company remains on target to add 50 net stores to its estate in the current financial year. Its online personalised card and gift business also experienced strong growth, with revenue up 16.4 per cent to £5.5m.
Card Factory returned a £7.9m bottom-line loss despite its strong performance, due to the costs of its initial public offering (IPO) and a subsequent debt refinancing deal.
Richard Hayes, chief executive officer of Card Factory, told The Yorkshire Post the company’s maiden listed results were ‘encouraging’.
He said: ‘We’ve done what we said we would do at IPO.
‘Group revenue is up, like-for-like sales are up, underlying group profit is up and we continue to see strong cash flow generation.’
The company’s development strategy focuses on four pillars of growth: like-for-like sales, new stores, business efficiency and developing its online business.
Improving quality, both in existing ranges and added lines, is central to its sales growth plan, but Mr Hayes denied this will drive up costs for customers.
He said: ‘If you were to visit a Card Factory store, you can see retail selling prices remain very competitive.
‘We’re focused on value for customers; we’ve done very well for the last 17 years with a value-focused proposition, that isn’t something we’re looking to change.’
In addition to boosting like-for-like sales, the first half of the year saw 37 store openings, compared with one store closure, bringing the total estate to 749.
‘We believe we have the potential to reach 1,200 stores across the UK and the Republic of Ireland,’ Mr Hayes said.
The company is currently exploring its options to expand into Ireland for the first time, he said.
Lease negotiations have formed a central part of Card Factory’s business efficiency strategy, in an effort to maximise growth. However, Mr Hayes said ‘every cost line’ is examined by the company.
Card Factory has been growing its online business since acquiring Getting Personal in 2011, which focuses on personalised gifts and non-card products, and launching its own-brand website in 2012.
While the growth seen in the first half of the year could not be guaranteed in the second half, Mr Hayes said the company is ‘optimistic’ about its online development, despite being a relatively new entrant to the market.
The company will continue its four-pillar approach going forward, Mr Hayes said, as the company heads into the lucrative Christmas run-up.
Analysts at Investec welcomed Card Factory’s results, calling its business model ‘a cash generation machine’.
‘We view Card Factory as a proven brand-led eight to 10-year roll out story with a compelling and highly differentiated value proposition,’ the investment bank said.