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(Sharecast News) - Brexit stockpiling and higher wages led to a 14% fall in interim profits at Card Factory, the company said on Tuesday.
The greetings card retailer reported pre-tax profit of £24.3m for the six months to July 31 as cost of sales jumped 10% to £124.7m and operating expenses rose 6% to £42.4m. A special dividend of 5p per share was declared alongside the interim dividend of 2.9p, which remained unchanged.
Store wages were 12% higher at £39.9m as new stores were opened and pay increases awarded, while Brexit contingency planning saw the company holding increased stock levels and resulted in other direct expenses increasing by 12%.
This overshadowed a 6% rise in revenues to £195.6m despite the challenging high street environment after the opening of 26 new locations.
A reduction in costs is expected for the rest of the year as the FTSE 250 company said first half investment in supply chain operations and property management business efficiencies should deliver savings.
Chief executive Karen Hubbard said the period saw record sales for both Valentine's Day and Mother's Day and achieved against the backdrop of an "increasingly challenging UK high street environment and consequent weaker footfall".
"The successful seasonal trading, combined with more sophisticated use of data and improvements to our customer experience, gives us confidence for the key Christmas trading period ahead."
Card Factory shares were up 1.85% at 165.00p at 0805 BST.
(Writing by Frank Prenesti; Editing by Michele Maatouk and Josh White)
9 Aug 2018 10:42
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