Last checked at 18 Jun 2014 07:00
18 June 2014
Card Factory plc ("Card Factory" or the "Group")
Interim Management Statement
Card Factory, the UK's leading specialist retailer of greeting cards, is pleased to announce its interim management statement for the period from 1 February 2014 to date. Operational and financial information relates to the 4 months ended 31 May 2014 unless stated otherwise.
Key highlights
· Ongoing positive growth in like-for-like sales from existing store estate
· Continued new store roll out with 29 net new stores opened
· Strong pipeline of future new store opportunities
· Appointment of Geoff Cooper (Non-Executive Chairman), Octavia Morley (Senior
Independent Non-Executive Director) and David Stead (Independent Non-Executive Director)
· Admitted to trading on the London Stock Exchange
· Completion of senior debt refinancing, significantly reducing annual interest cost
Recent trading performance
The Group continues to trade in line with the Board's expectations.
In the period under review, the Group has continued to grow like-for-like sales and expand its retail estate from its established new store roll out programme.
In the first four months of the current financial year, 29 net new stores have been opened, bringing the total estate to 742 stores as at 31 May 2014. The Group has a strong pipeline of additional new store opportunities and remains confident of opening a total of approximately 50 net new stores in the current financial year in line with historic opening rates.
As described in its IPO prospectus dated 15 May 2014 (the "Prospectus"), the Group has opened an average of over 50 new stores per year over the past 10 years and intends to continue to expand its store portfolio organically to up to 1,200 stores in total over the next 10 years, including up to 100 potential new stores in the Republic of Ireland.
Completion of senior debt refinancing
As announced on 2 June 2014, the Company also completed the refinancing of its existing senior bank facilities.
As set out in the Prospectus, the new senior bank facilities (used in part for the refinancing) include a £180 million term loan facility and a £20 million revolving facility (both with a 5 year maturity).
As previously announced, taking into account the IPO proceeds and transaction costs, the Group had net debt on 20 May 2014, the date that the Group's shares were admitted to listing, of approximately £160 million, representing approximately 2.0x underlying EBITDA for the year ended 31 January 2014. The financial position of the Group has not changed materially since.
Analyst visit
Card Factory is hosting a site visit for analysts today, including a tour of the Group's design studio and printing operation, a visit to local stores and a presentation from senior management. No new material financial or other information will be provided during the visit.
Interim results
The Group will announce its interim results for the 6 months ended 31 July 2014 in September.
Richard Hayes, Card Factory's Chief Executive Officer, said:
"We have had a positive start to our current financial year, further developing our distinctive value proposition and continuing to deliver on our clear growth strategy. The Board remains confident of the Group's ability to further grow market share for the foreseeable future."
ENDS
Enquiries
Card Factory plc +44 (0) 203 128 8100
Richard Hayes, Chief Executive Officer
Darren Bryant, Chief Financial Officer
MHP Communications +44 (0) 203 128 8100
John Olsen
Katie Hunt
Simon Hockridge
Notes to Editors
Card Factory is the UK's leading specialist retailer of greeting cards. It focuses on the value and mid-market segments of the UK's large, resilient and growing greeting cards market, and also offers a wide range of other quality products, including small gifts and gift dressings, at affordable prices. Card Factory principally operates through its nationwide chain of over 700 Card Factory stores, as well as through its online offerings: www.gettingpersonal.co.uk (which sells personalised cards and gifts) and www.cardfactory.eu.com (which sells a selection of the products available in Card Factory stores).
Card Factory commenced operations in 1997 with just one store and has expanded its store estate primarily through organic growth into a market-leading value retailer with a nationwide presence. The Group's stores are in a wide range of locations including on high streets in small towns through to major cities, shopping centre developments, out-of-town retail parks and factory outlet centres.
Under the current management team, Card Factory has developed a vertically integrated business model with an in-house design team, an in-house printing facility and central warehousing capacity of over 360,000 sq. ft. This model differentiates the Group from its competitors by significantly reducing external costs and adding value to customers in terms of both price and quality, underpinning the Group's motto: "compare the quality, compare the price".
Card Factory sold over 285 million single cards in the financial year ended 31 January 2014. In that year, the Group achieved revenue growth of 9.0% to £326.9 million and underlying EBITDA growth of 9.2% to £80.4 million (2013: £73.6 million) at a margin of 24.6%.
Cautionary Statement
This announcement is based on information from unaudited management accounts and contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of Card Factory plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, Card Factory plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.