Card Factory has reported a turnaround in pre-tax profits thanks to shoppers returning to high streets following the easing of Covid restrictions.
The Yorkshire-based plc saw pre-tax profit of £14.3m in the six months to the end of July, up from a pre-tax loss of £6.5m in the same period last year. It told investors that revenue growth of more than 4% to £198m reflected a shift of consumer spending back to bricks and mortar stores.
During the half year, the brand opened six new stores in the Republic of Ireland and its first "small format" trial store in central London, while eight stores were closed. Card Factory said it was also in the final stages of launching click and collect services in 84 of its 1,026 stores.
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Possible international expansion was hinted at following work with consulting company Global Data to size up opportunities in the Middle East and India. Meanwhile, sales of balloons and party items were 29% higher following the end of pandemic restrictions and despite cost of living pressures, the retailer said its "value" positioning meant it was resilient.
Darcy Willson-Rymer, chief executive officer, said: "We are pleased to report a strong performance through the half which reflects continued good momentum within the business, as well as the reversal of lockdown trends with customers choosing to return to the high street. The pronounced shift in spend back towards stores supports our continued conviction in the value of our store estate within our customer proposition and as an enabler in our omnichannel ambitions.
"During the half, we have made good strategic progress as we focus on evolving our customer proposition across different channels and taking it to new markets. We recently opened stores in central London for the first time, with two trial stores forming part of our strategy to increase our presence in underpenetrated markets. We have also rolled our new model store format out to include five stores as we focus on evolving the in store customer experience.
"The inflationary pressures we are all facing into are well known, however the pre-emptive actions we have taken, such as the fixing of energy costs until September 2024 and targeted price increases, have helped to offset these. Despite these ongoing challenges, we remain confident that our customers will continue to want to celebrate life's moments and that value for money is increasingly important to them. Card Factory offers great value for money across a range of products and price points, and our experience so far this year confirms how well this resonates with consumers.
"Whilst we remain mindful of the challenging economic backdrop as we head towards the Christmas season, we feel well placed to navigate this and retain our focus on transitioning Card Factory to a market leading omnichannel retailer of cards and gifts."
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