Card Factory profits take hit “higher than initially expected”

Card Factory

The Card Factory has taken a hit to its margins “higher than initially expected” as it struggles with lower footfall and seeks to mitigate rising import costs.

In the six months to July 31, the retailer reported a 13.9 per cent drop in operating profits to £24.6 million, with underlying operating profits dipping 4.6 per cent to £27.7 million.

Underlying EBITDA dropped four per cent to £32.8 million while underlying profits before tax fell 4.8 per cent to £26.3 million.

Like-for-like sales saw a more positive performance with a 3.1 per cent boost, while revenues jumped 6.1 per cent to £179.6 million.

The retailer also grew its UK estate by 30 stores over the period, bringing its total to 895.

“We have delivered a solid set of interim results with strong growth in like-for-like sales and total revenue, despite the decline in footfall seen across the high street; however, profitability over the half year was impacted by foreign exchange, national living wage and some of the important investments we are making in the business for longer term growth,” chief executive Karen Hubbard said.

“Our business model remains highly cash generative and we are pleased to be announcing another special dividend of 15 pence per share.

“Together with the interim dividend, this means we will have returned £246.5m to shareholders since IPO in May 2014.”

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