Card Factory has reported a rise in sales despite pressure on UK consumers driving a decline across its high street stores. The retail chain, which operates 1,126 shops across the UK and Ireland, said revenues increased by 5.3% to £260.8 million for the six months to July 31, compared with the same period a year earlier.
Digital growth offsets store decline
The company was buoyed by a £12.8 million jump in digital sales, driven by the £24 million acquisition of Funky Pigeon from WH Smith in July. This helped offset a 0.7% revenue drop in its main stores business during the half-year.
Like-for-like store sales fell by 2%, but were partly offset by the opening of 23 new stores over the past year. Store sales in the Republic of Ireland rose by 24.3% year-on-year, supported by the continued store expansion programme there.
Profitability and outlook
Boss Darcy Willson-Rymer said the half-year represented “further progress” in efforts to become a broader and more diversified business across the gifting and celebrations market. He added: “Despite continued pressure on the UK consumer, group revenue increased and profitability remained broadly flat, with improved store profitability and disciplined working capital management delivering strong free cash flow.”
Adjusted pre-tax profits decreased slightly to £12.7 million from £13.2 million a year earlier. Card Factory told shareholders it has been “encouraged by trading” since the end of July, with UK like-for-like store sales returning to growth in recent weeks.
Mr Willson-Rymer added: “We remain focused on strengthening our store estate and increasing our share of the celebrations market. During the first half, we continued to optimise our stores and space, strengthened our value proposition and rolled out our new party range. In addition, the ongoing development of our partnerships and international businesses are broadening our reach and creating further opportunities for growth, and the integration of Funky Pigeon and delivery of the expected synergies remain on track.”
Shares in the company were up 2.5% at 74.5p.
