Card Factory reported higher revenue and improved cash generation, though like-for-like sales at its UK stores fell as consumer pressures and a hot summer weighed on footfall.
Darcy Willson-Rymer, Chief Executive Officer, said: “We made further progress in the first half towards building a broader, more diversified celebrations business. Despite continued pressure on the UK consumer, Group revenue increased and profitability remained broadly flat, with improved store profitability and disciplined working capital management delivering strong Free Cash Flow.”
The greetings card and gifts retailer said revenue rose 5.3% to £260.8m in the six months to 31 July, helped by last year’s acquisition of the online cards business Funky Pigeon and growth in wholesale.
Adjusted pre-tax profit was broadly flat at £12.7m, as improved store margins were offset by investment in its digital and international operations. On a statutory basis, pre-tax profit jumped 63% as one-off costs fell away.
Trading in its core UK stores was softer, with like-for-like sales down 2% amid subdued consumer confidence, though its Irish stores grew strongly and wholesale sales, through partnerships with the likes of Aldi and The Reject Shop, rose 14%.
The company generated positive free cash flow, unusual for its first half, and raised its interim dividend 8%.
Card Factory said it remained confident it would meet full-year expectations, citing strong plans for the crucial “golden quarter” of Christmas trading and noting that UK store sales had returned to growth in recent weeks.
It is continuing a £15m share buyback.