Card Factory shares rise as retailer raises profit expectations
- Card Factory shares have roughly doubled in the last 12 months
- The company now expects its annual result to exceed previous forecasts.
- His footfall was severely affected during 2020 and 2021 by curbs related to Covid
Card Factory shares soared on Monday after the group defied a weaker economic backdrop to see trade beat forecasts for the first half of the year.
The greeting card and gift company told investors it now anticipates its yearly performance to be “well ahead” of earlier expectations.
It follows a May update in which the firm said sales in the first weeks of the current fiscal year had been “encouraging” across its daily and seasonal ranges, while it saw robust demand during the Valentine’s Day seasons. and Mother’s Day.
Future Plans: In the summer of last year, the company launched a three-pronged growth strategy that included plans to expand its store ownership and online platform.
He added that he was optimistic about alleviating cost inflation through a combination of price increases and productivity improvements.
Card Factory Actions it soared 14.9 percent, or 13.2 pence, to 102 pence on Monday morning, making it the biggest gainer in the FTSE All-Share Index.
The retailer’s share price has risen roughly 97 percent in the past 12 months amid a sustained rally in its core business.
Card Factory saw footfall severely affected throughout 2020 and 2021 by pandemic-related restrictions forcing non-essential shops in the UK to close temporarily.
This particularly hit the group’s revenue from major seasonal shopping events such as Christmas, while many Britons also turned to online-only brands like Moonpig for their card and gift purchases.
Such was the drop in orders that the Wakefield-based firm warned in early 2021 that it was at risk of breaching agreements with lenders.
Card Factory eventually agreed a new £225m refinancing deal comprising a £100m revolving credit facility, a £75m loan and £50m through various Covid-19 loan schemes.
Easing stay-at-home rules helped the company rebound to profit last year, as sales exceeded pre-pandemic levels after customers shifted their spending to stores, offsetting a drop in demand. online.
Sales have remained healthy, even as cost-of-living pressures and Royal Mail strikes have hit the retail sector.
Russ Mould, AJ Bell’s chief investment officer, said: “It seems the Brits are still very attached to the idea of sending a greeting card to celebrate special occasions, and that’s reflected in a very upbeat business update from Card Factory.”
‘Card Factory has been steadily raising earnings expectations of late, so it must be doing something right in what is a very challenging retail environment.
“The company’s offering is perfectly aimed at cost-conscious consumers, and while some of this market has migrated online, there are still plenty of people who want to go into a store and peruse the cards while selecting extras like birthday balloons and poppers for parties. .’