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Share Name Share Symbol Market Type Share ISIN Share Description
Card Factory Plc LSE:CARD London Ordinary Share GB00BLY2F708 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.25 0.7% 35.75 35.80 36.00 37.50 35.50 36.60 667,867 16:35:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Leisure Goods 451.5 65.2 15.1 2.4 122

Card Factory PLC Trading Statement and Capital Markets Day

28/07/2020 7:00am

UK Regulatory (RNS & others)


Card Factory (LSE:CARD)
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From Jul 2020 to Oct 2020

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RNS Number : 2225U

Card Factory PLC

28 July 2020

28 July 2020

Card Factory plc

("Card Factory" or the "Company")

Trading Update and Capital Markets Day

Card Factory, the UK's leading specialist retailer of greeting cards, dressings and gifts, is pleased to update the market on its trading performance and financial position.

Store Reopening

The Company undertook a phased approach to reopening stores, prioritising protection of colleagues and customers and taking account of local restrictions. An initial small phase was opened in a range of location types to test and adapt operations to Covid-secure social distancing and hygiene measures. Following positive feedback from both customers and colleagues, the store reopening programme accelerated as follows:

 
 From (date)     Number of stores   Locations          Aggregate trading 
                  opened                                stores 
 15 June 2020    89                 Eng.               89 
                -----------------  -----------------  ------------------ 
 23 June 2020    218                Eng.               307 
                -----------------  -----------------  ------------------ 
 26 June 2020    419                Eng., RoI, NI      726 
                -----------------  -----------------  ------------------ 
                                    Scotland, Wales, 
 3 July 2020     253                 Eng, RoI, NI      973 (1) 
                -----------------  -----------------  ------------------ 
 13 July 2020    33                 Scotland           1,006 (1) 
                -----------------  -----------------  ------------------ 
 24 July 2020    9                  Eng., Scotland     1,015 
                -----------------  -----------------  ------------------ 
 

1. Aggregate number of stores trading reduced due to localised lockdown in Leicester area where 6 stores have been closed

We currently have 1,015 of our 1,018 stores operating in accordance with Covid secure guidelines. In line with our continuous review of our stores estate, since the start of the financial year, 7 new stores have opened, 2 have relocated and 11 stores have closed. A further 4 stores are to be opened (where leases were entered into prior to the Covid-19 closures) and we anticipate c. 9 store closures, resulting in c. 1,013 stores by the end of the current financial year.

Sales

Sales realised from our stores have exceeded our initial expectations, with like-for-like sales since reopening down 21.6% (compared to an anticipated 50% reduction in the first month of reopening). Although the number of in-store transactions has fallen, reflecting footfall levels, the average spend has increased by 24.9%.

Online sales from both cardfactory.co.uk and gettingpersonal.co.uk continue to exceed previous year's sales, realising like-for-like sales up 68.9% for the current financial year to 19 July 2020. Online like-for-like sales were up 120.7% during the period of store closures, from 23 March to 14 June 2020. Since stores started to reopen, to 19 July, online like-for-like sales were up 60.5%.

We successfully launched the new cardfactory.co.uk website on 2 July 2020.

Aggregate revenue for H1 FY21 (i.e. 1 February to 31 July 2020) is expected to be approximately GBP100m (H1 FY20: GBP195.6m), with material impact from the 12 week period of store closures. Within this period of closure, important seasons including Father's Day and Easter were materially affected, and since reopening, there is understandable reduced demand for 'Thank You Teacher', Wedding and Children's Party ranges.

Cash Management

The Company has continued to manage costs, cash and creditors carefully and expects to remain within its revised banking covenants. Net Debt as at 19 July 2020 was GBP144.2m, which is below our original forecast, attributable to:

   --    increased revenues from store and online sales exceeding expectations; 
   --    measures to reduce costs; 
   --    improved terms agreed with suppliers and managing stock intake; 

-- cost deferrals amounting to c. GBP24.7m, including rents, VAT and some agreed delayed payments to suppliers. Deferred rents are generally payable over 12 months from September 2020.

To date, the group has received funding of GBP15.5m under the Coronavirus Job Retention Scheme, which has allowed us to protect roles during recent months. As previously announced, the group is eligible to issue commercial paper under the Covid Corporate Financing Facility, should it be required.

Outlook

The Board is pleased with the trading performance since stores have reopened; however, it is far too soon to determine whether initial trading reflects the release of pent-up demand following lockdown or the point at which consumer footfall and sales (both transactions and average spend) will settle to a sustainable level.

Capital Markets Day

The Company looks forward to presenting the refreshed growth strategy from 2pm today at its virtual Capital Markets Day briefing. Registration for the virtual Capital Markets Day briefing is available via the following link: https://webcasting.brrmedia.co.uk/broadcast/5f06f7424e934f0a0e3ec633

This briefing will be led by Executive Chairman, Paul Moody, and include presentations from a number of the operational management team. It will provide an overview of the new strategy, including opportunities to drive growth and improve returns, and will include our financial targets for FY25. Key FY25 targets include:

-- Revenue of c. GBP635m, of which c. 20% will be derived from a broadly equal split between (a) Online & Multichannel and (b) Retail Partnerships.

   --    Underlying PBT (after accounting for IFRS 16 Leases) of c. GBP105m. 

-- c. 5,600 distribution points (UK and International), of which c.1,100 will be group operated stores.

   --    Group market share of c. 45% of UK card volume. 
   --    Underlying PBT (after accounting for IFRS 16 Leases) to leverage range of 1.2x to 2.6x. 

-- Average capex over the 5 years from FY21 to FY25 will be c. GBP16m per annum, with capex during FY25 of GBP12m.

Annual General Meeting

The Company's 2020 Annual General Meeting (AGM) is to be held at 11am on 30 July 2020. Following the Directorate Change announcement made on 26 June 2020, the Company confirms that Paul Moody has temporarily stood down from the Remuneration Committee, whilst he continues in his role as Executive Chairman, pending the appointment of a new CEO. In addition, resolution number 3, set out in the notice of the Company's AGM dated 19 June 2020, for the re-election of Karen Hubbard, is proposed to be withdrawn and not put to shareholders at the AGM (or any adjournment thereof).

 
 Enquiries: 
 Card Factory Plc                              Tel: 01924 839150 
 Paul Moody, Executive Chairman 
 Kristian Lee, Chief Financial Officer 
 Tulchan Communications                        Tel: +44 (0) 207 353 
  James Macey White / Elizabeth Snow / Amber    4200 
  Ahluwalia 
 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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July 28, 2020 02:00 ET (06:00 GMT)

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