Personalised gift and party supply business Card Factory announced the return of its interim dividend after a revenue boost, despite wage rises and freight inflation hitting profit.
The company announced the recommencement of an interim dividend of 1.2p, “demonstrating commitment to delivering progressive returns to shareholders”.
Revenue in the six months ended 31 July increased by 5.9 per cent to £233.8m, from £220.8m in the same period of 2023.
Profit before tax, however, fell by 43.3 per cent, from £24.7m to £14m, due to “substantial increases in the national living wage, plus freight inflation and phasing of strategic investments,” the company said.
Earnings before interest, tax, depreciation and amortization fell by 11.4 per cent, from £51.1m to £45.3m, while basic earnings per share fell by 46.4 per cent, from 5.6p to 3p.
Darcy Willson-Rymer, chief executive officer, said: “I am delighted to be reporting further progress against our growth strategy with this resilient underlying performance in the first half of the year.
“During the period, we continued to see strong performance across our growing store estate, with gifts and celebration essentials now a core driver of revenue growth, building on our strength in greetings cards.
“As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business.”
Analysts at Panmure Liberum called Card Factory’s results “resilient” and said that the company’s valuation remained “exceptionally low”, rating the stock a ‘buy’.
“The interims reflect a resilient top-line, with all channels in growth. While the impact of inflation especially from wage increases were well-flagged, some may be disappointed by the year on year declines in profit.
“Profit before tax growth is expected to be weighted toward the second half of the year due to the phasing of planned investment, inflationary recovery actions and leveraging the benefits of the group’s vertically integrated business model.”
The company’s share price has risen nearly 12 per cent in the last month and more than 37 per cent in the year to date.