Card Factory confirms intention to float on the stock exchange

Card Factory released its intention to float this morning, as it plans to raise £90m to reduce the firm’s debt.

The 700-store value greetings card retailer is owned by private equity firm Charterhouse.

It added that in the year to January 31, EBITDA jumped 9.2% as sales increased 9% to £326.9m. It achieved an EBITDA margin of 24.6%, selling 5.5 million cards each week.

Card Factory chief executive Richard Hayes said: “The scale, resilience and continued growth of this market reflect the fact that the giving of physical cards is and will remain ingrained in UK culture.

“In addition, our vertically integrated model, comprising in-house design, production and retail, gives us clear differentiation and allows us to provide exceptional value and quality for our customers while delivering best-in-class EBITDA margins.”

Hayes said Card Factory has achieved like-for-like growth every year since the first store opened in 1997.

He added that there is potential for “significant” growth of its store estate in the UK and Ireland to 1,200 stores in the next 10 years after successfully opening 50 stores on average each year. Card Factory also plans to grow its market share for online personalised cards and gifts through its Gettingpersonal.co.uk site.

Former Travis Perkins boss Geoff Cooper joined the board last month and Card Factory revealed Crew Clothing managing director Octavia Morley and Dunelm finance director David Stead are both joining the board as non-executive directors.

Cooper said: “I was attracted to Card Factory by its compelling business model, clear growth prospects and the strength of its executive management team. In the period I have worked with the Group, all these initial impressions have been confirmed. The addition of Octavia Morley and David Stead as non-executive directors will create a highly experienced and well-balanced board, capable of leading and supporting the Group in the effective execution of its growth strategy.”

Card Factory said it has invested £50m into the firm over the past 10 years to support business growth. Charterhouse currently has a 60% stake in the business with management owning the majority of the balance.

The UK greetings card market was estimated to be worth £1.4bn in 2012, growing at a rate of 1.4% a year between 2009 and 2012, according to OC&C. And management estimates the gifting market is worth £1bn to £2bn.