// Card Factory delivers “satisfactory sales performance” at half-year mark
// The retailer is currently planning to roll out its supply partnership with Aldi after a successful trial
Card Factory has posted a decline in half-year profits amid preparations to roll out its supply partnership with German discount grocer Aldi.
In the six months to July 31, the card and gifts retailer recorded a 7.9 per cent decline in underlying pre-tax profit to £22 million, while revenue rose 5.5 per cent to £195.6 million.
Overall pre-tax profit fell 14.4 per cent to £24.3 million, like-for-like sales rose 1.5 per cent.
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Underlying EBITDA margin fell 14.7 per cent in the period compared with 16.1 per cent the previous year, which the business attributed to increasing stock levels “for Brexit contingency planning, investment in new lines and the acceleration of seasonal buying”.
The retailer opened 26 new stores in the period and is on track to open a total of 50 across the UK and ROI by the end of 2019.
Card Factory now expects its full-year adjusted underlying EBITDA to be in line with expectations.
Nevertheless, the retailer has agreed to roll out its partnership to supply cards to Aldi across half of its 440-store estate, starting November.
The move follows a successful trial last year which saw Card Factory supplying cards to 130 Aldi stores.
Card Factory also began a trial with Matalan to open concessions across 15 of its stores, and has also signed an exclusive partnership with Australian discount retailer The Reject Shop to supply its 360-store estate with branded cards, beginning next year.
“We have delivered a satisfactory sales performance in the first half of the year,” Card Factory chief executive Karen Hubbard said.
“A strong seasonal performance, which saw another year of record sales for both Valentine’s Day and Mother’s Day, was achieved against the backdrop of an increasingly challenging UK high street environment and consequent weaker footfall.
“The successful seasonal trading, combined with more sophisticated use of data and improvements to our customer experience, gives us confidence for the key Christmas trading period ahead.
“Although the current economic uncertainty continues to impact consumer confidence, we remain positive about the resilience of the card market, the strength of the Card Factory business model, and our growth opportunities for the business over the medium term.”