Wakefield-based greeting card and gift retailer Card Factory said its profit before tax soared 368.5% to £52.4 million as revenue rose 27.1% to £463.4 million in the year to January 31, 2023.
On dividends, Card Factory said it remains prohibited from making distributions under the terms of its financing facilities “until such time as the CLBILS and Tranche ‘A’ of the term loans” are fully repaid.
“The final maturity date for tranche ‘A’ of the term loans is 31 January 2024, and accordingly the earliest that dividend payments will be considered is during the FY25 financial year,” said the Wakefield firm.
“Subject to continued financial performance in line with the strategic plan, the board envisages recommencing dividend payments at a level of 2-3x dividend cover based on profit after tax, subject to a leverage ratio assessed across the financial year of not more than 1.5x (excluding lease liabilities) being maintained after the distribution is made.”
Card Factory shares are up about 70% for the past 12 months, but they fell about 5% on Wednesday.
Card Factory CEO Darcy Willson-Rymer said: “I have been incredibly pleased with our performance this year which has been ahead of expectations.
“These strong results reflect positive momentum across the business, including notable progress on our strategic growth initiatives, buoyed by the marked shift of customer spend back towards the high street.
“Revenue growth has been underpinned by a strong performance of store-based sales and Everyday card ranges, alongside strong trading through the Christmas season, with new ranges and our compelling value for money offer clearly resonating with customers, driving both store transactions and average basket values.
“Proactive measures that we put in place to manage the inflationary pressures faced in the year, coupled with our strengthening financial position, have underpinned positive progress on our strategic priorities.
“Whilst remaining mindful of the ongoing impact of the cost of living crisis on our customers, we are confident that we are well positioned to make good progress in our transition to becoming the market leading omnichannel retailer of cards and gifts.”
On current trading and outlook, Card Factory said: “Trading in the first weeks of the new financial year has been encouraging and slightly ahead of the board’s expectations.
“Both Everyday and Seasonal ranges have performed strongly across cards and gifts during this time, with our offer across our FY24 Spring seasons of Valentine’s Day and Mother’s Day also landing well with customers, resulting in a robust performance.
“As we look ahead, we continue to have confidence in our ability to mitigate cost inflation through a combination of productivity initiatives and targeted price actions.
“This approach, together with our clear growth strategy and compelling value-led proposition, gives us confidence the group will continue to make strategic and financial progress in the year ahead.
“The board remains confident in the compelling growth opportunity for the business, as well as in our ability to use our expertise and the flexibility in our business model to drive profitability and returns for shareholders over the long term.
“As part of our capital markets strategy update, we will outline a pathway for revenues of around £650m and margins around 14% in FY27, supported by a capital investment plan of £24m per annum, over the next three years.”