Card Factory has delivered underlying pre-tax profits up 25% and sales up 8% as its boss prepares to step down. Here’s the City’s reaction.

“Delivering more cash than expected Card Factory’s prelims have beaten most expectations. Although currency and national living wage headwinds will impact the new year, earnings progress will significantly exceed its peers, and its relative position with the customer is likely to improve again this year.

“There is major progress in non-card, which will be testament to the increased focus placed thereupon at head office.

“There is a degree of uncertainty introduced with the departure of the instrumental Richard Hayes but we hear nothing but good things about the new incumbent Karen Hubbard and it’s to be expected that it will be more of the same strategically.”

Jonathan Pritchard, Peel Hunt

 

“Clearly a stellar performance from Card Factory. The fact they have an integrated business model really helps to drive margin and at the same time reduce prices to customers. The increase in store numbers at roughly one per week has been impressive at a time when most retailers are stopping or at least slowing their openings.

“The fact they have an integrated business model really helps to drive margin and at the same time reduce prices to customers”

Paul Thomas, Retail Remedy

“For the future, they, like many retailers, will face the financial challenges of the increased costs the national living wage will bring. They have referenced it in their results today, saying they have a plan to mitigate around £1m of the expected £2.5m increase, but that will still leave them with an increased cost ratio closer to 17% for store wages going forward. The hope is that the sales will continue to grow, and offset some of the increase. Karen Hubbard is about to take over a very well run business. Her challenge will be to maintain the growth while absorbing increased costs.”

Paul Thomas, Retail Remedy

 

“Card Factory has delivered strong FY16 results, with headline figures slightly ahead of expectations. Investors should take confidence that the retiring chief executive leaves the business in good shape and we expect the shares to respond favourably today. The key components of growth remain firmly intact with store roll-out targets being hit and an ongoing robust organic performance. Encouragingly, there is strong growth across all categories – cards and non-card, as well as online. The potential for additional cash returns is significant, adding excitement to the long-term quality growth on offer.

“This is a strong set of results, which extends the track record of consistent delivery since the IPO in May 2014. Card Factory is a high-quality business, a market leader and has a strong management team with a proven track record.”

Adam Tomlinson, Liberum

 

“The specialist greeting card retailer has reported an impressive set of full-year figures up against tough comparatives. Sales growth was driven both by its expanding store portfolio, but also by ongoing growth at its maturing online proposition.

“Online has steadily grown in relevance, but it is stores that remain the main driving force of the business”

Greg Bromley, Verdict Retail

“While the retailer has continued to expand its non-card proposition, it admits margins here are lower compared with greeting cards. Online has steadily grown in relevance, but it is stores that remain the main driving force of the business.

“Card Factory has taken the time to note how the business has changed somewhat extraordinarily under chief executive Richard Hayes from a small greetings card retailer with 40 outlets to market leader with more than 800 stores. New chief executive Karen Hubbard joins the retailer with significant value retailing experience garnered from her time at B&M, and her immediate challenge – which may prove tricky as the business matures – will be to ensure Card Factory keeps up the rapid momentum achieved under its outgoing boss.”

Greg Bromley, Verdict Retail