24th Sep 2024 12:25
(Alliance News) - Card Factory PLC on Tuesday announced its half-year profit has dropped by more than 40% following this year's increases to the national living wage in the UK.
The Wakefield, West Yorkshire-based greeting cards and gifting firm said revenue for the six months to June 30 was GBP233.8 million, up 5.9% on-year from GBP220.8 million. However, pretax profit fell 43% to GBP14.0 million from GBP24.7 million.
Shares in Card Factory were down 17% at 118.92 pence each in London on Tuesday afternoon.
The firm said the fall in pretax profit reflected "substantial increases in national living wage, plus freight inflation and phasing of strategic investments".
The national living wage increased by 9.8% in April this year to GBP11.44 an hour for workers aged 21 and above. In 2023, the wage was GBP10.18 for workers aged 21-22 and GBP10.42 for workers aged 23 and over.
Card Factory declared an interim dividend of 1.20 pence, up on-year from none.
Chief Executive Officer Darcy Willson-Rymer said: "During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards. Together with the exciting partnership initiatives we are announcing today, we are helping more customers in more places celebrate life's moments.
"As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business. Our strategic growth ambitions are underpinned by a robust balance sheet and strong cash flow, alongside our disciplined approach to managing working capital and focus on driving efficiencies and productivity across the business. Moving forward, we believe we are well placed with a strong proposition that resonates with a broad customer base and delivers an unrivalled quality, value and choice offering."
By Emily Parsons, Alliance News reporter
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