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Card Factory keeps sending special greetings

The gift and stationery retailer has handed back more cash than expected - yet again.
April 5, 2016

Having already announced a special dividend worth 15p a share at the time of its half-year results in September, gift and stationery retailer Card Factory (CARD) is still handing cash back to shareholders. The final dividend worth 6p a share came in a penny ahead of broker Peel Hunt's expectations, and chief financial officer Darren Bryant says there's "significant potential" for further returns of surplus funds to investors. All in all, 23.5p was returned to shareholders last year, and if a similar amount is handed back this year, that implies a forward dividend yield of around 7.5 per cent.

IC TIP: Buy at 338p

That wasn't the only good news contained in these results, however. Store-based like-for-like sales grew 2.8 per cent last year, ahead of the 1.8 per cent growth rate recorded in 2014. However, there are a couple of headwinds expected this year. The first is the introduction of the new living wage (NLW) - which outgoing chief executive Richard Hayes says will cost the group £2.5m a year - as well as rising costs linked to the relative strength of the dollar.

Analysts at Peel Hunt expect pre-tax profit of £86.7m this year, giving EPS of 19.8p, compared with £82m and 19.1p in FY2016.

CARD FACTORY (CARD)
ORD PRICE:338pMARKET VALUE:£1.15bn
TOUCH:337-338p12-MONTH HIGH:389pLOW: 291p
DIVIDEND YIELD:1.8%PE RATIO:17
NET ASSET VALUE:78p*NET DEBT:47%

Year to 31 JanTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2012**26616.3nana
2013**30023.8nana
201432730.17.5na
201535342.710.66.8
201638283.719.58.5
% change+8+96+84+25

Ex-div: 5 May

Payment: 10 Jun

*Includes intangible assets of £331m, or 97p a share