Wakefield-based greeting card and gift retailer Card Factory said its first-half revenue rose 5.5% to £195.6 million but profit before tax fell 14.4% to £24.3 million, impacted by the cost of holding increased stock levels for Brexit contingency planning.
The firm confirmed a special dividend of 5p per share, an additional return of £17.1 million to shareholders, and maintained an interim dividend of 2.9p.
Card Factory shares rose 2%.
The company said following a successful trial across 130 stores it now has an agreement with Aldi to supply half of its UK estate, totalling 440 stores, from November 2019.
“The board expects FY20 adjusted underlying EBITDA to be in line with market expectations,” said the firm.
Card Factory CEO Karen Hubbard said: “We have delivered a satisfactory sales performance in the first half of the year.
“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.
“We are pleased with the progress made on the strategic initiatives that are underway.
“These include using consumer insight to develop our customer proposition across all channels and a number of commercial partnerships.
“Maintaining a sharp focus on the execution of these various initiatives is a key priority for the senior leadership team.
“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.”
Analysts at Peel Hunt wrote: “The special cash return of 5p is welcome, but has been well flagged.
“Forecast momentum is flat at best here and whilst management is trying hard to move the dial it is difficult given that the underlying card market in the UK is uninspiring.
“Deals such as the Aldi one are a means to stimulate the top line, but our view is that some retail inspiration is required in the core stores.
“Better use of EPOS data should make that easier to target and the online side is improving too, but there are other retailers that warrant more attention than CARD, even if the multiple is low.”