Card Factory (CARD) has struck a more upbeat note discussing the state of the current financial year. Last year’s results were grim, with underlying sales mostly flat and profits – whether on a cash, operating or pre-tax basis – in decline, as margins took a sustained beating. But the board says it’s more “satisfied” with current progress, and believes it could muster a special dividend of 5p-10p this year if costs remain largely in line with expectations. Admittedly, pressure will persist – cash profit margins will fall by around 120 basis points this year – but chief executive Karen Hubbard believes investments that are being made now in new ranges and better efficiencies will pay off in 2020.
Given the renewed stability of sterling against the US dollar and other global currencies, many retailers are entering a more benign cost environment. Card Factory’s longer-term hedging policies gave it immediate protection in the aftermath of the Brexit vote, says financial chief Kris Lee, but it means that latter comparatives suffered.
Analysts at Peel Hunt still expect adjusted pre-tax profit of £78.5m for the year ending January 2019, giving EPS of 18p, compared with £80.5m and 18.9p in FY2018.
| CARD FACTORY (CARD) | ||||
| ORD PRICE: | 220p | MARKET VALUE: | £751m | |
| TOUCH: | 220-220.4p | 12-MONTH HIGH: | 341p | LOW: 185p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 64p* | NET DEBT: | 74% | |
| Year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 327 | 30.1 | 7.5 | nil |
| 2015 | 353 | 42.7 | 10.6 | 6.8 |
| 2016 | 382 | 83.7 | 19.5 | 8.5 |
| 2017 | 398 | 82.8 | 19.3 | 9.1** |
| 2018 | 422 | 72.6 | 17.1 | 9.3** |
| % change | +6 | -12 | -11 | +2 |
| Ex-div: | 3 May | |||
| Payment: | 8 Jun | |||
| *Includes intangible assets of £332m, or 97p a share | ||||
| **Excludes special dividends worth 15p a share | ||||
