GREETING cards retailer Card Factory, which floated on the London Stock Exchange last month, reported a good start to its new financial year and said it has a strong pipeline of new store openings.
The Wakefield-based company said it saw ongoing positive growth in like-for-like sales from its existing store estate.
The firm was constrained from saying too much so close after its float, but analysts said they believe like-for-like sales have continued their forward momentum.
Card Factory’s underlying sales grew 3.2 per cent in 2013 and by 3.1 per cent in 2014.
In the first four months of its new financial year, Card Factory opened 29 new stores, bringing the total estate to 742 stores.
Richard Hayes, Card Factory’s chief executive, said the group has a strong pipeline of additional new store opportunities.
He said the firm is confident it can open around 50 net new stores in the current financial year, in line with historic opening rates.
The group has opened an average of more than 50 new stores per year over the past 10 years.
It intends to continue to expand its store portfolio organically to up to 1,200 stores in total over the next 10 years, including up to 100 potential new stores in the Republic of Ireland.
“We have had a positive start to our current financial year, further developing our distinctive value proposition and continuing to deliver on our clear growth strategy,” said Mr Hayes.
“The board remains confident of the group’s ability to further grow market share for the foreseeable future.”
Earlier this month Card Factory completed a refinancing of its existing senior bank facilities.
The new senior bank facilities include a £180m term loan facility and a £20m revolving facility, both with a five-year maturity.
Card Factory said the refinancing will result in a significant reduction in its interest payments.
Card Factory’s shares tumbled after initial trading, reflecting caution from the market after a series of IPOs this year.
The initial public offering, which was at the lower end of price guidance, raised £90m for the company and more than £200m for the selling shareholders.
Mr Hayes said: “The bottom line is from a long-term perspective, the fundamentals of this business are very strong.
“I have no doubt that if we keep delivering as we have over the last 10 years that will be reflected in the share price.”
He said the management team is focused on expanding the business by rolling out new stores and developing the retail proposition.
The management team has retained a stake in the business, holding 19.2 per cent of ordinary shares, as has private equity backer Charterhouse, which holds 41.3 per cent.
Mr Hayes added: “We are committed to it through that share allocation.”
The group said that after taking into account the IPO proceeds and transaction costs, the group had net debt of £160m on May 20, the date the group’s shares were admitted to the London Stock Exchange.
It added that the group’s financial position has not changed materially since then.
Card Factory designs and manufactures cards in Yorkshire and also uses third party providers.
The group will announce its interim results for the six months to July 31 in Septem-ber.