Card Factory posts drop in interim profit, shares slide

24th Sep 2024 09:28

(Sharecast News) - Card Factory tumbled on Tuesday as it posted a decline in first-half profit, partly due to increases in the national living wage.

In the six months to the end of July, adjusted pre-tax profit fell to £14.5m from £22.1m, reflecting "substantial" rises in the national living wage, as well as freight inflation and the phasing of strategic investments.

The retailer said that as previously guided, the benefit of its strategic investments and "robust" programme of productivity measures and efficiency savings in FY25 are weighted to the second half and that it has already seen these positively impact the cost base.

Revenue rose 5.9% on the same period a year earlier to £233.8m, with Cardfactory like-for-like revenue growth of 3.7%. The company said this was driven by its focus on developing its store estate and the quality and value offer.

Gifts and celebration essentials saw LFL growth of 6%, while cardfactory.co.uk saw revenue growth of 8.8%.

Chief executive Darcy Willson-Rymer said: "During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards.

"As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business. Our strategic growth ambitions are underpinned by a robust balance sheet and strong cash flow, alongside our disciplined approach to managing working capital and focus on driving efficiencies and productivity across the business."

At 0900 BST, the shares were down 16% at 120.62p.