From yesterday : Trading Statement
Card Factory, the UK's leading specialist retailer of greeting cards, gifts and dressings, is pleased to announce its trading update covering the period from 1 February 2014 to date. Operational and financial information relates to the 11 months ended 31 December 2014 unless stated otherwise.
The Group continues to trade in line with the Board's expectations.
The Group remains highly cash generative. The Board expects to report a significant reduction in net debt at the year end to a level lower than the current range of market expectations (see Note 3 below).
In the 11 months ended 31 December 2014, revenue increased by 8.1%, driven by a combination of like-for-like sales growth, new store roll out and further growth in our online business, Getting Personal. This growth rate is similar to that delivered in the 11 months ended 31 December 2013 (8.9%).
Delivering on our four pillars of growth
1. Like-for-like sales growth in existing stores
Card Factory's like-for-like store sales grew by +1.8% during the period despite a strong comparable period last year when like-for-like sales grew by +3.1% (see Note 2 below).
The like-for-like performance since the half year reflects, in part, investment in localised pricing strategies adopted during the year, particularly in the final quarter. We will continue to adopt this approach to strongly defend our market leading position, whilst maintaining our focus on delivering best-in-class margins.
2. Continuing new store roll out
A total of 51 net new stores have been opened in the year to date, bringing the total estate to 764 stores as at 31 December 2014.
Looking ahead to our next financial year ending 31 January 2016, the Group has a strong pipeline of additional new store opportunities and we remain confident of continuing our historic opening rate of approximately 50 net new stores per annum.
3. Delivering business efficiencies
The Group has consistently delivered extremely strong margins by leveraging its vertically integrated model which has been established and developed over many years. The Board continues to balance the driving of economies of scale and business efficiencies with ongoing investment in the business in anticipation of future growth.
A key focus for this investment has been the continued roll out of our new EPOS system which is now installed in over 50% of the store estate. As disclosed previously, the Board anticipates a number of business efficiencies will flow from this system over the medium term.
4. Development of complementary online sales channel
The Group, as a relatively new entrant, continues to grow its online division rapidly, with continued double digit revenue growth achieved through Getting Personal since the half year stage.
As previously announced, Paul McCrudden, EMEA Head of Content Marketing at Twitter, has joined the Board as an Independent Non-Executive Director. Paul brings a wealth of digital and marketing experience that will be particularly helpful as we continue to develop our online activities.
Preliminary results announcement
The Group will announce its preliminary results for the year ending 31 January 2015 on 25 March 2015.