Dividend boost as Card Factory revenue tops £422m

Shares of Wakefield-based greeting cards retailer Card Factory rose about 5% after it said revenue rose 6% to £422.1 million in the year to January 31 — and that it plans to pay another special dividend to shareholders.

However, profit before tax fell 12.3% to £72.6 million with Card Factory blaming the “impact of foreign exchange and national living wage.”

Total ordinary dividend per share increased 2.2% to 9.3p — and a special dividend of 15p per share was paid in December 2017.

Card Factory said a total of £268.4 million — 78.7p per share — has been returned to shareholders via dividends since the firm’s IPO in May 2014 and a further return of surplus cash is “expected to be made towards the end of the FY19 financial year in the range of 5-10p per ordinary share.”

Card Factory CEO Karen Hubbard said: “We delivered strong like-for-like sales growth in a tough trading environment. 

“We sold more cards than the prior year, and delivered a higher average card selling price and total basket size. 

“We also saw a record breaking number of customers shopping with Card Factory for both card and complementary non-card products, demonstrating our resilience against a backdrop of High Street footfall decline.

“Our store roll-out programme continues, with 50 new UK sites opened in the year, and our Card Factory online business has seen further growth, with increased visitors and sales, and represents a clear opportunity for future growth.

“From a profit perspective, we faced strong headwinds of £14.6 million in the year, principally due to the combined impact of foreign exchange and national living wage.

“Our cost saving initiatives during the year provided substantial mitigation and we have laid the foundations for further efficiencies to be delivered in the future.

“However, given the continuing headwinds, and as previously stated, any EBITDA growth in FY19 is likely to be limited. 

“Our unique, vertically integrated business model remains strong and we have now established a solid platform for future growth, with our four pillar strategy continuing to support strong cash generation and a progressive dividend policy.

“We currently expect to declare another special dividend with our half year results in the range of 5-10p per ordinary share.

“Whilst the new financial year is just two months old, we are satisfied with the start we have made and particularly pleased with the record seasonal performances from Valentine’s Day, Mother’s Day and Easter, and being recognised by our peer group as Specialist Retailer of the Year at the recent Retail Week annual awards.”