Card Factory returns to profit
Card Factory has returned to profit thanks to shoppers coming back to its stores following the end of lockdown restrictions.
Announcing results for the year to the end of January 31, the card chain said pre-tax profit was £11.1m, up from a loss of £16.4m the year before. Store sales were the main driver of the performance for the Wakefield based firm, but online sales significantly ahead of pre-pandemic levels also helped as revenue climbed from £285.1m to £364.4m.
Store sales increased 33% during the period, and store like-for-like sales for the Christmas period recovered to what the business said were “near pre-pandemic levels”.
Net debt including lease liabilities was reduced from £252.6m to £194m and gross margins improved from 28% to 32%.
However, the company warned that cards could be about to get more expensive, following an increase in the cost of card. It said inflationary pressures have seen card prices already rising and higher price points are expected to last throughout the year.
Card Factory also said it had made progress on strategic priorities including merging its two websites – cardfactory.co.uk and gettingpersonal.co.uk – into one platform and the opening of a new “model store” with improved customer navigation.
“We saw a steady recovery in store performance as lockdown restrictions eased, particularly in the run up to Christmas with store sales approaching pre-pandemic levels in this key trading period. As we reopened our stores, we saw our online performance decline slightly year on year; however, we remain greatly encouraged that our Card Factory online sales were significantly ahead of pre-pandemic levels. This year will see us make further progress in developing our customer proposition, through a broader product range and improved online experience, as part of our transition to a leading omnichannel retailer.
“Looking forward, we remain confident our revenue levels for next year will continue trending towards pre-pandemic levels. We have taken pre-emptive action to help mitigate the inflationary pressures we are seeing across the business and we will continue to monitor and respond to developing macro environmental pressures. Our focus is on creating opportunities across our store estate while building out our wider capability which will allow us to deliver our strategic initiatives and drive growth at pace.
“We enter the year ahead with confidence in our ability to deliver our plan for FY23. We remain excited by the growth opportunity ahead and continue to focus on implementing changes to enable us to deliver on our transition from a store-led card retailer into a market leading, omnichannel retailer of cards and gifts.”
