Card Factory to deliver £700m float in London

 
Kasmira Jefford
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CARD Factory boss Richard Hayes said yesterday that it hopes to emulate the success of other value retailers such as Poundland after announcing plans for float that could value the group at around £700m.

The budget greetings chain, which has 700 stores, intends to raise £90m through an initial public offering that will allow its private equity owner Charterhouse to sell down its stake four years after buying a majority shareholding.

Card Factory also plans to use the proceeds to pay down debt while continuing to open around 50 shops a year in the UK and Ireland over the next 10 years, growing to around 1,200 shops. The group is the latest in a line of retailers to go public this year, although some have received a more muted reception, with convenience store group McColl’s and Boohoo both trading below their initial offer price.

However, Hayes shrugged off any concerns: “We are a value focused specialist retail and the recent value players that have come to market have done very well. Over the last four years the business has performed very well with [Charterhouse’s] support and we feel that it is now of scale that is befitting of a public company.”

Underlying earnings before interest, tax, depreciation and amortisation rose 9.2 per cent to £80.4m in the year to 31 January. The group sold 285m cards, helping to generate £326.9m in revenues, up nine per cent on the previous year.

Card Factory will also beef up its board with Geoff Cooper, the former boss of Travis Perkins, and David Stead, the financial director of homeware group Dunelm, both set to become non-executive directors.

BEHIND THE DEAL
INVESTEC | JOE THOMPSON

1 Thompson is a director in the corporate broking and equity capital markets team at Investec and worked on Royal Mail’s IPO.

2 Having trained and qualified as a chartered accountant with KPMG in 1998, he has worked for over 15 years in the City and, prior to Investec, spent eight years at Dresdner Kleinwort.

3 In 2008, Thompson was one of the founding directors of the equity capital markets and advisory division within Lloyds Banking Group.

Also advising...
Morgan Stanley and UBS are acting as joint sponsors on the deal, with Nomura joining the pair to act as joint bookrunners. Investec will be the joint lead manager, with David Flin joining Joe Thompson to form the team. STJ Advisors will provide financial advice and MHP Communications is handling PR.