LONDON (Alliance News) - Card Factory PLC on Tuesday reported a drop in its annual profit, as like-for-like sales were hurt by continued weakness of UK footfall during the year.
For the year ended January 31, the greeting cards retailer posted pretax profit of GBP66.6 million, 8.3% lower from GBP72.6 million a year ago.
Revenue meanwhile increased 3.3% year-on-year to GBP436.0 million from GBP422.1 million, driven by a strong online sales performance, up 56%.
Like-for-like sales dipped 0.1% during the year, due to widespread high street footfall decline, the company explained. A year ago, they had accelerated 2.9%.
Card Factory stores saw like-for-like down 0.5%, with Getting Personal, the company personalised card offering, down 8.4% due to heavy discounting and promotional activity.
"We delivered a robust performance for the year, maintaining flat like-for-like sales despite a tough consumer environment. Our focus has been on continual improvements to our customer offer, producing better, more innovative ranges of everyday and seasonal cards and maintaining our quality and value positioning, while also being more efficient and driving savings across the business," Chief Executive Officer Karen Hubbard said.
"Earnings before interest, taxes, depreciation and amortisation for the year however, was impacted by lower footfall and Getting Personal's disappointing performance," she added.
Ebitda increased 8.7% to GBP93.6 million from GBP86.1 million, while it fell 4.9% to GBP89.4 million on an adjusted basis.
The company opened 51 new stores during the year, which accounted for its "biggest growth channel". It is now looking for further openings both in the UK and internationally.
The company maintained its ordinary dividend at 9.3 pence per share, flat year-on-year after proposing a 6.4p final payout.
However, Card Factory slashed its special dividend to 5.0p per share from 15p paid to shareholders a year ago.
"We remain focused on shareholder returns and committed to distributing surplus cash to shareholders, a further return is expected to be made towards the end of the financial year 2020," the retailer said.
Looking ahead, the card retailer said it is "satisfied" with trading since the start of its new financial year, as both Valentine's Day and Mother's Day "saw record seasonal performance".
"As previously stated, Ebitda for the forthcoming year is anticipated to be broadly flat year-on-year in light of various external pressures, but we are confident we are laying the right foundations for future profit growth, whilst continuing to deliver healthy returns of cash to our shareholders," Hubbard added.
Card Factory shares were trading 1.8% higher at 180.29 pence each early Tuesday morning.
Card Factory (CARD)