Card Factory Plc · LSE:CARD
Card Factory — H1 2025 Earnings Presentation
28 slides from Card Factory's earnings presentation, Sep 24, 2024
Slide 1: Creating celebrations for all life's moments
Creating celebrations for all life’s moments Card Factory plc FY25 Interim Results 24 September 2024
Slide 2: Agenda
Agenda Introduction Darcy Willson-Rymer Financial Performance Matthias Seeger Strategy Update Darcy Willson-Rymer Summary & Outlook Darcy Willson-Rymer Q&A Darcy Willson-Rymer & Matthias Seeger 2
Slide 3: Introduction
Introduction Darcy Willson-Rymer 3
Slide 4: Continued positive momentum driving performance in HY25
Continued positive momentum driving performance in HY25 • Revenue growth driven by stores and positive progress in executing our growth strategy. • HY25 topline growth ahead of both the celebrations occasions market and wider non-food retail sector*. • Very encouraging partnerships progress includin
Slide 5: Financial Performance
Financial Performance Matthias Seeger 5
Slide 6: HY25 financial highlights
HY25 financial highlights On track to deliver our full year expectations Continued sales growth in challenging environment PBT phasing to second half as expected Disciplined investments maintain a strong balance sheet Interim dividend of 1.2p per share HY25 = six months ended 31 July 2024. 6
Slide 7: Resilient financial performance
Resilient financial performance Revenue Adjusted PBT Adjusted EPS £233.8m £14.5m 3.1 pence (HY24: £220.8m) (HY24: £22.1m) (HY24: 5.0 pence) +5.9% -34.4% -1.9 pence Cash from DPS Net Debt Operations 1.2 pence £74.9m £17.5m (HY24: £71.9m) (HY24: 0.0 pence) (HY24: £36.3m) -51.8% +4.2% +1.2 pence Net de
Slide 8: Continued top line sales growth – Positive store LFL and new store expansion
Continued top line sales growth – Positive store LFL and new store expansion +5.9% year-on-year growth +5.9 ppts +0.0 ppts +0.0 ppts +£12.8m - +£0.2m £m 220.8 233.8 Total +6.1% CFO +8.8% +3.1% LFL +3.7% GP -12.5% Partnerships Online cardfactory Stores Group Revenue HY24 cardfactory Stores Online Par
Slide 9: Stores sales outperforming the market
Stores sales outperforming the market • Total cardfactory store sales of +6.1% in H1 Cardfactory BRC-KPMG* significantly outperformed non-food sector Stores sales which declined during the same Feb-Jul Avg Feb- Feb-Apr May-Jul Jul** period. Total Sales +6.1% -2.3% -2.8% -1.7% • cardfactory LFL store
Slide 10: HY25 PBT margin impacted by wage inflation; programme in place to mitigate in H2
HY25 PBT margin impacted by wage inflation; programme in place to mitigate in H2 Proven, continuous programme to focus on lowest cost delivery (Productivity, Efficiency, Range) in place to o set inflationary headwinds in H1 & H2 Margin % • Streamlining of store operations – labour Increase in freigh
Slide 11: Proven, continuous programme to focus on lowest cost delivery in place
Proven, continuous programme to focus on lowest cost delivery (Productivity, Efficiency, Range) in place to offset inflationary headwinds in H1 & H2 Optimised labour model FY25 flat vs and Store Efficiency FY24 Programme to eliminate Indicative development in non-value-added activities Adjusted PBT
Slide 12: Remain confident in our ability to deliver FY27 targets
Remain confident in our ability to deliver FY27 targets Same store sales growth through range development, plus growing partnerships and online Productivity and operational efficiencies in E2E value chain Cost price and wage inflation PBT Margin Rate FY24 2 3 4 PBT Margin Rate FY27 12
Slide 13: HY25 profit impacted by inflation in H1 versus mitigating actions in H2
HY25 profit impacted by inflation in H1 versus mitigating actions in H2 HY25 HY24 Change • Adjusted PBT of £14.5 million is down reflecting inflationary headwinds in HY25 Revenue £233.8m £220.8m +5.9% and the annualisation of HY24 investments. Product Margin £164.0m £155.2m +5.7% • Product margins s
Slide 14: Disciplined investment approach, strong cash performance
Disciplined investment approach, strong cash performance HY25 HY24 Change • Seasonal business cycle with greater cash EBITDA £45.3m £51.1m (£5.8m) outflows and working capital build up in the first half. Cash from Operations £17.5m £36.3m (£18.8m) Corporation Tax (£8.6m) (£6.1m) (£2.5m) • Operating
Slide 15: Reduction in net debt prior to dividend payments
Reduction in net debt prior to dividend payments £12.5 million reduction in net debt at 31 July 2024 prior to 15.5 74.9 reintroduction of dividends 71.9 £m • Final dividend in respect of FY24 18.0 59.4 (£15.5 million) paid during H1 in June; net debt is up by £3.0m after dividend payment. 16.0 £’m •
Slide 16: Disciplined Capital Allocation approach
Disciplined Capital Allocation approach Maintain a strong balance sheet Invest to deliver the strategy Target maximum leverage of 1.5x Deliver business plans; investments to accelerate business progress need to deliver attractive returns Regular, progressive returns to Disciplined use of surplus cas
Slide 17: Financial summary
Financial summary • Strong sales performance against backdrop of challenging market conditions. • Positive operating cash flows off-setting inflation and operational investment through disciplined management of capex investment. • As anticipated HY25 was negatively impacted by wage and freight price
Slide 18: Strategy Update
Strategy Update Darcy Willson-Rymer 18
Slide 19: Strategic growth pillars
Strategic growth pillars Stores: Card, Gifts & Online & Partnerships: Celebration Essentials: Omnichannel: Leverage and grow £13.4bn UK Celebration Deliver a seamless £80bn international profitable store estate Occasions addressable celebration experience market opportunity market 19
Slide 20: Positive progress on strategic initiatives: Stores
Positive progress on strategic initiatives: Stores • Total store revenue growth +6.1% as we continued to grow our profitable UK & ROI estate bringing our leading value proposition to more locations. • 15 net new store openings in H1, including fourth central London store in Cheapside. • Continue to
Slide 21: Positive progress on strategic initiatives: Cards and gifts
Positive progress on strategic initiatives: Cards and gifts • Strong performance across HY25 Spring seasons, driven by card range development aligned to key trends. • Gifts (+10.5% LFL) and celebration essentials (+3.2% LFL) a key driver of revenue growth as we continue to introduce new and expand e
Slide 22: Positive progress on strategic initiatives: Omnichannel and Online
Positive progress on strategic initiatives: Omnichannel and Online • Online momentum continued at cardfactory.co.uk with revenue growth of +8.8% supported by increased traffic and transactions. • Ongoing range development focused on driving online profitability through focus on higher margin product
Slide 23: Positive progress on strategic initiatives: Partnerships
Positive progress on strategic initiatives: Partnerships UK partnerships developments: • Full Aldi UK and ROI estate rollout secured with multi-year, full-service agreement. • Exclusive supplier of everyday greetings cards, doubling our presence to service all Aldi‘s circa 1200 stores from the end o
Slide 24: Summary & Outlook
Summary & Outlook Darcy Willson-Rymer 24
Slide 25: Preparations for Christmas
Preparations for Christmas • Well prepared for our key Christmas season. • Christmas rollout underway with marketing campaign activation and new promotional activity. • 80% of Christmas range new for FY25 including expanded gift offer with new ranges including toys, baby’s first Christmas and pet gi
Slide 26: Summary of HY25
Summary of HY25 • Resilient topline performance through HY25 led to growth ahead of the celebrations occasions market. • Very encouraging progress across our strategic growth pillars. • Growing our presence and reach through our expanding store estate and retail partnerships. • Demonstrating headway
Slide 27: Confident outlook for the full year
Confident outlook for the full year • Effective execution of efficiencies and productivity measures, meaning we are on track and have confidence to deliver our plans for the full year. • Disciplined management of working capital. • Continued strategic progress expected in H2, building on HY25 perfor
Slide 28: Q&A
Q&A Darcy Willson-Rymer & Matthias Seeger 28