Card Factory profit and LFL sales drop as footfall declines
Card Factory posted a drop in full-year underlying profit and like-for-like sales on Tuesday but a rise in revenue amid a "tough" consumer environment.
In its preliminary results for the year ended 31 January 2019, the FTSE 250 retailer said underlying pre-tax profit declined 7.3% to £74.6m while LFL sales dipped 0.1% versus a 2.9% increase the year before.
Still, group revenue was up 3.3% at £436m, driven by a 3.8% rise to £419.7m at Card Factory. However, sales at personalised gifting business Getting Personal fell by 8.4% to £16.3m.
Underlying earnings before interest, tax, depreciation and amortisation were 4.9% lower at £89.4m.
The company said it took a hit from lower footfall on the high street and a disappointing performance from Getting Personal, with the sector hit by heavy discounting and promotional activity.
LFL sales at Card Factory stores dropped 0.5% during the year compared to a 2.6% increase in 2018, while online Card Factory sales were up 56.3%, slowing down from 67.5% the year before. Total online sales were flat versus a 5.9% increase the year before.
The final dividend was maintained at 9.3p a share and the group said it expects to declare a special dividend at the time of its interim results.
Chief executive officer Karen Hubbard said: "We delivered a robust performance for the year, maintaining flat like-for-like sales despite a tough consumer environment. Our focus has been on continual improvements to our customer offer, producing better, more innovative ranges of everyday and seasonal cards and maintaining our quality and value positioning, while also being more efficient and driving savings across the business. EBITDA for the year however, was impacted by lower footfall and Getting Personal's disappointing performance.
"Whilst the new financial year is just two months old, we are satisfied with the start we have made and are particularly pleased with record seasonal performances from Valentine's Day and Mother's Day. As previously stated, EBITDA for the forthcoming year is anticipated to be broadly flat year-on-year (excluding the impact of IFRS 16) in light of various external pressures, but we are confident we are laying the right foundations for future profit growth, whilst continuing to deliver healthy returns of cash to our shareholders."
At 0930 BST, the shares were up 4.9% to 185.69p.