(Alliance News) - Card Factory PLC on Tuesday said it expects to report revenue almost halved in the first six months of its financial year, as the Covid-19 pandemic forced store closure, but it said sales have exceeded its initial expectations since reopening.
Card Factory said it to report aggregate revenue of about GBP100 million in the half year to July 31, down 49% from GBP195.6 million a year before.
Card Factory has reopened 1,015 of its 1,018 stores since mid-June. Seven new stores were opened since the start of the financial year on February 1, and four more are planned to open on leases agreed prior to Covid-19. The company closed 11 stores during the period. It expects to open 4 stores and close a further 9 in the remainder of the year, leaving it with 1,013 stores.
Like-for like-sales since reopening dropped only 22% in comparison to a predicted drop of 50%. While footfall levels are lower, average spend has increased 25%, Card Factory said.
In other positive news, the Wakefield, English-based company recorded a 69% rise in online sales since the start of the financial year. Online like-for-like sales were up 121% during the lockdown and remain up 61% since Card Factory stores repopened.
Net debt on July 19 was GBP144.2 million, below the company's original forecast. It credited the increased online sales, cost reduction methods, re-agreed terms regarding stocks and suppliers, and cost deferrals of GBP24.7million.
Card factory said it remains optimistic about reopening, although it expeced reduced demand for Covid-effected ranges such as 'Thank You Teacher', Wedding and Children's Party.
"It is far too soon to determine whether initial trading reflects the release of pent-up demand following lockdown or the point at which consumer footfall and sales (both transactions and average spend) will settle to a sustainable level," said Card Factory.
The company's financial targets for financial year 2025 include increasing revenue sixfold, gaining 45% market share of UK card volume, and maintaining capital expenditure at GBP16 million over the five year period.
Card Factory said Executive Chair Paul Moody will step down from the Remuneration Committee of the board until a new chief executive officer is found. Chief Executive Karen Hubbard abruptly departed at the end of June after four years in the role, as Card Factory embarked on a "refreshed growth strategy".
Card Factory shares were up 6.8% at 44.65 pence in London on Tuesday morning.
By Neetika Kurup; neetikakurup@alliancenews.com
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Card Factory (CARD)