24th May 2016 06:47
LONDON (Alliance News) - Card Factory PLC Tuesday said it will inform shareholders whether it will return surplus cash to shareholders when it releases its interim results later this year, but said it has made a good start to the financial year as it reiterated its guidance.
The retailer of greeting cards and gifts said total sales in the first quarter to the end of April were 6.5% higher than the previous year, as a rise in the average spend of each customer offset a reduction in overall footfall.
Although total sales are still growing, it is at a slower rate. In the first quarter of the previous financial year Card Factory saw sales grow by 7.5% year-on-year.
"As many other retailers have commented, retail footfall trends varied across the first quarter. For Card Factory stores, an overall reduction in footfall offset continuing growth in average spend, with first quarter like-for-like sales growth softer than levels recently achieved," said the company.
Card Factory reaffirmed it aims to grow like-for-like sales by between 1.4% to 3.2% over the full year.
Card Factory also continued to open new stores, opening 20 new net stores compared to 19 stores a year earlier. Card Factory now has a total of 834 stores, and Card Factory said it remains on track to deliver 50 new net stores over the full year.
Looking at online sales, Card Factory said revenue growth in the first quarter was over 10%.
"The group remains highly cash generative, driven by its strong operating margins, limited working capital absorption and relatively low capital expenditure required for expansion," said the company.
At the end of April the company had net debt of GBP110.4 million compared to GBP123.8 million at the end of the last financial year in January, but that may rise once Card Factory pays the dividend for last year which will total GBP20.4 million.
"We continue to believe there is potential for further returns of surplus cash to shareholders in line with our stated policy. We anticipate providing an update on the quantum and timing of such distributions with our interim results for the 6 months ending 31 July 2016, due for release in late September," said the company.
By Joshua Warner; [email protected]; @JoshAlliance
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