Shares of Wakefield-based Card Factory fell about 18% after it said profit before tax fell 14.1% to £23.2 million despite revenue rising 6.1% to £179.6 million in the six months to July 31.
Like-for-like sales growth for Card Factory increased 3.1% with about 30% growth from the cardfactory.co.uk website.
But Card Factory CEO Karen Hubbard said profitability over the half year was hit by foreign exchange, the national living wage and important investments and that “full year profit outturn will reflect a continuation of some of the headwinds identified in the first half.”
Hubbard said: “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.
“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 £246.5 million to shareholders since IPO in May 2014.
“The board intends to retain its progressive ordinary dividend policy and to continue to return any surplus funds to shareholders whilst giving consideration to the leverage of the business …
“Trading in recent weeks has been similar to the encouraging trends seen in the first half, with continued growth in average spend as customers respond well to our new and better ranges.
“The board is confident that the group will continue to make further strategic progress, although notes that the full year profit outturn will reflect a continuation of some of the headwinds identified in the first half.”