24th Sep 2019 08:13
(Alliance News) - Card Factory PLC has returned to like-for-like sales growth, it said on Tuesday, with performance strong despite continued weakness in the UK retail market.
Card Factory's like-for-like sales were up 1.5% on the year before for the six months to July 31, having declined 0.2% a year ago. Store like-for-like growth rose 1.2%, despite lower High Street footfall, with online sales surging 25%.
This helped the gift card retailer's revenue for the period climb 5.5% to GBP195.6 million, though pretax profit did decline 14% to GBP24.3 million. Underlying pretax profit slipped 7.9% to GBP22.0 million.
Profit was hurt by cost of sales rising well ahead of revenue, at just over 10%, as well as a slightly climb in finance expenses, as Card Factory increased stock levels in part due to Brexit contingency planning. Increase in the UK's national living wage also dented profit.
Card Factory has kept both the ordinary and special dividends flat for the half, at 2.9 pence and 5.0p respectively.
"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," said Chief Executive Karen Hubbard.
"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," she added.
Looking ahead, Card Factory noted ongoing economic uncertainty in the UK continues to dampen consumer sentiment, but it remains "positive" on the future of the gift card market.
Card Factory shares were up 4.4% at 169.10 pence each in London on Tuesday morning.
By George Collard; [email protected]
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