Card Factory posts £14.6m drop in full-year profits

Card Factory has posted a £14.6m drop in its full-year profits which it has attributed to the weak pound and soaring wage costs.

Pre-tax profits for the fiscal year ending January 31 were £72.6m, down 12.3% on the previous year.

This is despite the card and gift retailer’s revenues increasing by 6% to £422m, with the company claiming rising costs had an “adverse impact on profit margins”.

Additionally like-for-like sales increased by 2.9% and online sales for the company surged by 67% despite calling the sales from its ‘gettingpersonal’ website “disappointing”.

Chief executive Karen Hubbard, commenting on the figures, said: “We delivered strong like-for-like sales growth in a tough trading environment. We sold more cards than the prior year, and delivered a higher average card selling price and total basket size.

“We also saw a record breaking number of customers shopping with Card Factory for both card and complementary non-card products, demonstrating our resilience against a backdrop of High Street footfall decline.

“From a profit perspective, we faced strong headwinds of £14.6 million in the year, principally due to the combined impact of foreign exchange and national living wage. Our cost-saving initiatives during the year provided substantial mitigation and we have laid the foundations for further efficiencies to be delivered in the future.

“However, given the continuing headwinds, and, as previously stated, any EBITDA (underlying earnings), growth in full-year 2018-19 is likely to be limited.”

Card Factory opened 50 net new stores last year, bringing the total of its UK estate to 915 stores and according to the report has a strong pipeline for the next financial year.