(Alliance News) - Shares in Card Factory PLC fell significantly on Thursday after the company cautioned that profits would likely be squeezed by rising costs and "significant inflationary headwinds" going forward.
Shares sunk 16% to 53.50 pence each in London on Thursday afternoon.
Despite the potential challenges outlined in future trading, the greeting cards retailer said trading for financial 2022 was ahead of the board's expectations with performance recovering from April 2021 onward, as Covid-related restrictions eased.
Online sales had been a particular area of strength, Card Factory said, up 23% on a two year basis to GBP22.2 million.
However, looking ahead Card Factory warned earnings before interest, tax, depreciation, and amortisation margins look set to take a hit and as such, 2023 profit will come in lower than previously expected.
Revenue for the year ended January is expected to be in excess of GBP360.0 million, up from GBP285.1 million the year before. Profit before tax is forecast to be in the range of GBP7.0 million to GBP10.0 million, swung from a pretax loss of GBP16.4 million the year before. Ebitda is expected to be in the range of GBP71.0 million to GBP74.0 million.
"We continue to see improved trading performance across all channels, with transaction volumes in our stores outperforming high street footfall recovery, demonstrating the loyalty of our customers and strength of the brand," commented Chief Executive Darcy Willson-Rymer.
"The customer response to our Christmas ranges was particularly strong, across both card and complementary product ranges."
By Will Paige; willpaige@alliancenews.com
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Card Factory (CARD)