(Alliance News) - Card Factory PLC on Tuesday said it swung to a loss in the first half of its financial year as store closures due to the Covid-19 lockdown meant revenue was cut almost in half.
For the six months ended July 31, the Wakefield-based greetings card and gift retailer reported a GBP22.2 million pretax loss, swinging from a GBP24.3 million profit the year before.
This resulted from a near halving of revenue to GBP100.5 million from GBP195.6 million and reflects the fact that stores were closed across the UK and Republic of Ireland from March 23 until phased reopening was complete on July 24.
These result was in line with Card Factory's expectations in light of the pandemic.
Its online performance was strong, with revenue up 64% on a like-for-like basis thanks to higher demand while physical stores were closed, as well as "positive response" to a July website relaunch.
On June 26, former chief executive Karen Hubbard left Card Factory after four years in the role. The company said its search for her successor is "progressing to plan".
In July, the company launched a "refreshed growth strategy" which includes growth targets for the period to financial 20205 including revenue of around GBP635 million, of which around 20% is to be derived from a broadly equal split between Retail Partnerships and Online & Multichannel. It is also targeting underlying pretax profit for the period to financial 2025 of approximately GBP105 million.
Against this strategy, Card Factory believes it has made "good early progress". The firm is "confident in the long-term stability of the card market."
No final dividend was declared for its financial year ended January 2020 due to the pandemic. Card Factory's dividend policy for the medium-term has not changed and will be reviewed in the shorter term, but no dividends are expected for financial 2021.
Executive Chair Paul Moody said: "The combination of our unique customer insight, vertically integrated business model and market leading position continues to ensure that we are well positioned to meet the increased online demand, supply our commercial partners and to present the optimum ranges in our stores.
"We are pleased with both the trading performance as our stores have reopened and the positive feedback from customers who are visiting less frequently, but spending more. Recognising the uncertainty of the impact of further Covid-19 measures and changes in consumer behaviour in the short term, we are focused on a flawless execution of Christmas and the implementation of our refreshed strategy."
Shares in Card Factory were up 1.5% at 37.50 pence in London on Tuesday morning.
By Anna Farley; annafarley@alliancenews.com
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Card Factory (CARD)