Card Factory today scrapped its full-year dividend as higher costs and the ongoing impact of Covid-19 weighed on profit.
Card Factory reported revenue of £451.5m for the year to the end of January, up 3.6 per cent year on year.
Like-for-like sale dipped 0.5 per cent over the year.
Underlying profit before tax dropped 11.8 per cent to £67.2m.
Why it’s interesting
Card Factory’s full-year results gave an insight both into its trading before the pandemic and the ongoing impact of the lockdown.
The retailer said its like-for-like sales had been weighed down by weak consumer confidence and a sharp decline in high street footfall in the second half of the year.
The firm’s profit was also impacted by higher costs, including a rise in the national living wage and storage for increased cost levels.
But the greeting card specialist is now facing fresh pressure from the Covid-19 pandemic, which has prompted the closure of all its stores. Card Factory said 90 per cent of its staff had also been furloughed.
The decline in brick and mortar sales was partially offset by a surge in online trading, and the company said it had set up a second fulfilment centre in Wakefield to manage the increased demand.
However, Card Factory said the ongoing impact of the crisis meant it could not give financial guidance for the year and would not pay a dividend for the year.
The card chain said it was planning to open 10 per cent of its stores on 15 June in line with government guidance for non-essential retailers.
Shares in Card Factory rose sharply in early trading before settling up almost four per cent.
What Card Factory said
Chief executive Karen Hubbard said: “We delivered a reasonable sales performance in a challenging year for the high street, growing both our volume and value card market share in the mature and stable UK greeting card market. Our profitability was, however, impacted by a number of recurring cost pressures and other one off operational costs which we were not able to fully mitigate.
“Since the year end, whilst we have continued to evolve our medium and longer term plans, a key focus has been on appropriately managing our business and protecting our staff through the Covid-19 crisis.
“Our board and management team have reacted rapidly to the very dynamic situation and I am confident that we will exit this crisis with an operating model and customer proposition that will make Card Factory the customers’ first choice for greeting cards, everywhere and for all occasions, however the customer wishes to shop, although given the uncertainty we are unable to provide guidance on future performance.”