Card Factory dives after profit fall
Shares were down 11% in morning trading after it booked a 14.1% decline in pre-tax profit to £23.2 million in the six months to July 31.
Shares in Card Factory tumbled on Tuesday after the retailer reported a sharp fall in half-year profits.
The group booked a 14.1% decline in pre-tax profit to £23.2 million in the six months to July 31, as the Brexit induced collapse in the pound, national living wage costs and “important investments” took their toll.
Card Factory joined other retailers in pointing out that costs have rocketed since the referendum, when sterling tanked against all major currencies including the dollar.
“The increase in this cost ratio principally reflects the foreign exchange headwinds where the business has always been well hedged, but the prolonged step down in the sterling/dollar rate has had an increased impact.
“Additionally, the improvement of the offering in our non-card range has resulted in that segment performing strongly with some impact to group margin,” the greeting card firm said.
The news sent shares in the company down 11% to 314p in morning trading.
Boss Karen Hubbard warned that full-year profit could also take a hit.
She said: “The board is confident that the group will continue to make further strategic progress, although notes that the full-year profit out-turn will reflect a continuation of some of the headwinds identified in the first half.”
In better news, Card Factory said revenue in the six months to July 31 rose 6.1% to £179.6 million, while like-for-like sales rose 3.1%.