23rd Mar 2020 11:12
(Alliance News) - Card Factory PLC on Monday said it has closed all of its stores temporarily due to Covid-19 and warned it will not declare a final dividend for its recently ended financial year.
Earlier on Monday, the greeting cards retailer had said it was "reviewing our approach" after stores remained open on Sunday.
Card Factory explained it would keep its closures "under continuous review".
On its trading, the retailer reported a "satisfactory" start to its new financial year, despite high street footfall declines.
Card Factory said footfall slumped due to the spread of Covid-19.
It has turned to cost savings, as it eyes "significant reductions" in non-essential capital expenditure. New stores openings also have been limited.
The opening of seven stores will be delayed until the second half of its financial year.
Card Factory is also mulling not making a final payout for the financial year that ended January 31.
"We note and appreciate the various actions taken by the government to support businesses and their employees. The reduction in business rates provides a monthly cash saving of GBP2.0 million, while the deferral of all HMRC payments to the end of June 2020 contributes positively to the short term cash flow. The announced support for payment of wages for colleagues is welcomed," Card Factory added.
Net debt at the end of February stood at GBP137.0 million, and the company said it has access to a GBP200 million revolving credit facility which expires in 2023.
Card Factory said: "We remain confident that the long-term demand for cards and gifting remains robust, with people wanting to share sentiment around special occasions. Management remains focused on the delivery of its strategic business improvement initiatives which will ensure that Card Factory is best placed to meet this demand."
The company also said it will soon confirm a revised date for the publication of its full-year results.
The UK Financial Conduct Authority has asked companies due to produce preliminary financial statements in the next few days to delay publication due to disruptions caused by the coronavirus.
The watchdog urged all listed companies to observe a moratorium on the publication of preliminary financial statements for at least two weeks.
"The unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly," the FCA said in a statement at the weekend.
Card Factory shares were 11% lower at 30.01 pence each in London on Monday morning.
By Eric Cunha; [email protected]
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