Card Factory has reported higher sales for the first half of its financial year, despite what chief executive Darcy Willson-Rymer described as continued pressure on UK consumers.
The retailer, which operates 1,126 shops across the UK and Ireland, said revenue rose 5.3% to £260.8 million in the six months to July 31, compared with the same period a year earlier.
Mr Willson-Rymer said the half-year represented “further progress” in the company’s efforts to become a broader and more diversified business across the gifting and celebrations market.
“Despite continued pressure on the UK consumer, group revenue increased and profitability remained broadly flat, with improved store profitability and disciplined working capital management delivering strong free cash flow,” he said.
### Digital sales offset store decline
Card Factory’s digital business benefited from a £12.8 million increase in sales, helped by the £24 million acquisition of Funky Pigeon from WH Smith in July.
The increase partly offset weaker performance in the company’s main stores business, where revenue fell 0.7% over the half-year. Like-for-like store sales declined by 2%, although the impact was partly offset by the opening of 23 new stores during the past year.
The retailer’s operations in the Republic of Ireland performed more strongly, with store sales increasing 24.3% year-on-year as the company continued its store expansion programme there.
### Profit remains broadly stable
Adjusted pre-tax profit decreased slightly to £12.7 million, from £13.2 million a year earlier.
Card Factory said it had been “encouraged by trading” since the end of July. It added that UK like-for-like store sales had returned to growth in recent weeks.
Mr Willson-Rymer said the company remained focused on strengthening its store estate and increasing its share of the celebrations market.
“During the first half, we continued to optimise our stores and space, strengthened our value proposition and rolled out our new party range,” he said.
He also pointed to the development of partnerships and international businesses as areas that were broadening the company’s reach and creating further opportunities for growth.
Card Factory said the integration of Funky Pigeon and delivery of the expected synergies remained on track.
Shares in the company were up 2.5% at 74.5p.
