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Highlights

  • Revenue rose 6.2% to £542.5m, with adjusted profit before tax (PBT) up 6.3% to £66.0m.

  • Acquisitions in Ireland and the US mark key steps in international expansion strategy.

  • FY26 outlook remains positive with continued growth expected despite inflationary pressures.

Cardfactory (LSE:CARD), the UK’s leading retailer of greeting cards and celebration essentials, has announced its preliminary results for the financial year ended 31 January 2025 (FY25), showing revenue growth and a positive outlook for the coming year.

Group revenue climbed 6.2% year-on-year to £542.5 million, driven by continued store performance, international expansion, and effective execution of strategic initiatives. Adjusted profit before tax rose 6.3% to £66.0 million, aligning with prior guidance. This growth was achieved despite economic pressures, including higher freight costs and a 10% increase in the National Living Wage.

Store sales performance was a significant contributor to this growth. Total store revenue increased by 5.8%, bolstered by a net addition of 32 new stores during the year. Like-for-like (LFL) store sales grew 3.4%, reflecting customer response to product range expansion and selective pricing adjustments. The results place Cardfactory ahead of the broader UK retail sector, based on data from the BRC-KPMG Retail Sales Monitor.

The company also marked a major step in its international strategy with the acquisitions of Garlanna in Ireland and Garven in the US. These purchases added to partnership revenues, which rose to £22.2 million from £17.0 million in FY24. Both newly acquired businesses are reported to be performing in line with expectations, expanding Cardfactory’s reach and routes to market.

Gross profit rose to £193.8 million, up from £184.9 million the previous year, with profit margins largely preserved despite rising operational costs. The retailer credits its ongoing efficiency and productivity initiatives for offsetting inflationary impacts. Notably, the company delivered £29.0 million in adjusted free cash flow, up from £27.1 million the previous year.

Capital expenditure stood at £18.4 million, reflecting strategic investments in store development and IT systems. Net debt (excluding lease liabilities) increased by £24.5 million to £58.9 million, mainly due to £43 million spent on acquisitions and dividends. A final dividend of 3.6p per share was proposed, bringing the total dividend for FY25 to 4.8p, up from 4.5p in FY24.

Trading in the early months of FY26 is reported to be in line with expectations. Seasonal events such as Valentine’s Day and Mother’s Day delivered encouraging results, with the Saturday before Mother’s Day marking a record trading day.

Looking ahead, the company maintains a positive forecast for FY26, expecting mid-to-high single-digit adjusted PBT growth. Key growth drivers include continued like-for-like sales gains, new store openings, and full-year contributions from recent acquisitions. Inflation is anticipated to remain around 4-5%, with additional cost pressures from wage and national insurance changes estimated at £14 million. However, management expects further savings through its ‘Simplify and Scale’ programme.