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Card Factory swings to a half-year loss

By Abigail Townsend

Date: Tuesday 29 Sep 2020

Card Factory swings to a half-year loss

(Sharecast News) - Card Factory became the latest retailer to reveal a tumble into the red on Tuesday, after Covid-19 shut stores and dented trading during key periods, including Mother's Day and Easter.
The card specialist said revenues for the six months to 31 July fell to £100.5m from £195.6m a year previously, while pre-tax losses were £22.2m. Card Factory reported interim pre-tax profits of £24.3m in 2019.

Covid-19 and the introduction of lockdown measures closed 1,018 Card Factory stores in the UK and Ireland "for a significant proportion" of the first half, leading to a 48.6% slide in revenues.

"The uncertainty throughout this financial period spanned important seasons such as Mother's Day, Easter and Father's Day, albeit we saw strong performance in our online business, which provided some offset to the reduction in store sales," the retailer said.

The group has now reopened 1,017 stores. Like-for-like sales eased 13.6% since the start of the second half, but that was better than the 20% slide expected by management, and in the last four weeks to 20 September, the decline had narrowed to 6.9%.

While footfall was down, Card Factory also said that customers were spending on average 24% more in store.

Executive chairman Paul Moody said: "We are pleased with both the trading performance and the positive feedback from customers, who are visiting less frequently but spending more.

"Recognising the uncertainty of the impact of further Covid-19 measures and changes in consumer behaviour in the short term, we are focused on a flawless execution of Christmas and the implementation of our refreshed strategy."

Card Factory is targeting revenue of around £635m by the 2025 full year and underling pre-tax profits of around £105m.

Jonathan Pritchard, analyst at Peel Hunt, said: "In all these situations, current trading is key and Card Factory has done well with sales down by just 7% in the last month. That could be a positive for the 'under-the-cloud' share price."

As at 1230 BST, shares in Card Factory were trading 2% lower at 36.25p.

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