REG - Card Factory PLC - Final Results
07/05/2025 07:00
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RNS Number : 5883H Card Factory PLC 07 May 2025
7 May 2025
Card Factory plc ('cardfactory' or the 'Group')
Preliminary results for the year ended 31 January 2025
Strong strategic progress driving profitable growth.
cardfactory, the UK's leading specialist retailer of greeting cards, gifts and
celebration essentials, announces its preliminary results for the year ended
31 January 2025 ('FY25').
Financial summary(1)
Financial Metrics FY25 FY24 Change £ Change %
Revenue £542.5m £510.9m £31.6m +6.2%
EBITDA £127.5m £122.6m £4.9m +4.0%
Adjusted Profit Before Tax(2) £66.0m £62.1m £3.9m +6.3%
Profit Before Tax (PBT) £64.1m £65.6m £(1.5)m -2.3%
Adjusted Leverage (exc. Leases)(3) 0.7x 0.4x 0.3x n/a
Net Debt (exc. Leases) £58.9m £34.4m £24.5m +71.2%
Cash from operations £105.6m £118.7m £(13.1)m -11.0%
Basic EPS 13.8p 14.4p (1.4)p -4.2%
Adjusted EPS 14.3p 13.5p 0.8p +5.9%
Dividend per share 4.8p 4.5p 0.3p +6.7%
1.For further information and definitions of Like-for-like (LFL) and other
alternative performance measures see Explanatory Notes (below) "Alternative
Performance Measures ('APMs').
2.Adjusted PBT excludes transactions that are either one-off in nature or
otherwise not part of the Group's underlying trading performance. In FY25 this
includes one-off restructuring costs (£1.9 million), acquisition-related
costs (£1.0 million), refinancing costs (£0.5 million) and unrealised gains
on derivative contracts (£1.5 million).
3. Adjusted leverage is the ratio of Net Debt (excluding lease liabilities) to
EBITDA less lease related charges which is consistent with our covenant
reporting.
Darcy Willson-Rymer, Chief Executive Officer, commented:
"Our performance in FY25 demonstrates the strength and resilience of
cardfactory and our strategy as we continue to evolve the business into a
leading global celebrations group. We delivered strong revenue growth,
outperforming the wider celebration occasions market. Further expansion of
our store estate combined with continued development of our gift and
celebration essentials categories, were key drivers of our performance."
"We are now halfway into our 'Opening Our New Future' growth strategy and I am
pleased with what we have achieved across the business. With entry into new
markets, including the US, and expansion of existing partnerships, we are
reaching more customers, in more locations."
"As we move into FY26, good momentum has continued during our Spring seasons.
Despite an uncertain and inflationary backdrop, we remain confident in our
ability to deliver mid-to-high single-digit percentage profit growth,
underpinned by our strategic focus, our ongoing productivity and efficiency
programme and our strong financial discipline. I want to thank our dedicated
colleagues whose passion and focus on helping our customers celebrate life's
moments, continues to drive our success."
Highlights:
· Strong revenue growth of +6.2% to £542.5 million and Adjusted PBT
growth of +6.3% to £66.0 million in line with guidance, driven by effective
execution of our strategy.
· Total store sales growth of +5.8% and LFL store sales +3.4% growth,
ahead of the wider retail sector(4) reflects the continued strength of our
store estate and developing celebrations offer.
· Targeted acquisitions of Garlanna in the Republic of Ireland and
Garven in the US accelerating our partnerships strategy by increasing our
international presence and routes to market.
· Disciplined financial performance, with delivery of multiyear
efficiency and productivity programme, alongside sales growth, successfully
offsetting inflationary impacts in FY25 to maintain Adjusted PBT profit
margins.
· Expectations for FY26 of mid-to-high single-digit percentage
increases in Adjusted PBT remain unchanged and the Board remains confident in
the compelling growth opportunity for the business.
4. BRC-KPMG Retail Sales Monitor February 2024 - January 2025.
Financial highlights:
· Group revenue growth of +6.2% to £542.5 million for the full year
(FY24: £510.9m):
o Total store revenue up +5.8% including positive contribution from +32 net
new stores.
o LFL Store revenue grew +3.4% through combination of range expansion and
development, as well as targeted pricing action.
o Partnerships revenue of £22.2 million in FY25 (FY24: £17.0 million)
includes contributions from Garlanna, acquired in September 2024, and Garven,
acquired in December 2024, both of which are delivering in line with our
expectations.
· Gross profit of £193.8 million (FY24: £184.9m) with margins broadly
maintained vs. FY24, as we successfully mitigated the majority of increased
freight costs and a c.10% increase in National Living Wage.
· Adjusted PBT growth of +6.3% to £66.0 million (FY24: £62.1m)
reflects the disciplined management of operating costs and the benefits of our
ongoing efficiency and productivity programme.
· Good cash performance with adjusted free cash flow ahead of FY24 at
£29.0 million (FY24: £27.1m).
· Net debt (exc. lease liabilities) increased by £24.5 million to
£58.9 million (FY24: £34.4m), reflecting the combined expenditure of £43.0
million on acquisitions and dividends.
· Capex investment in FY25 of £18.4 million (FY24: £27.8m) enabled
strategic progress through store estate development and IT infrastructure.
· Recommended final dividend of 3.6p per share, resulting in a total
dividend of 4.8p per share for FY25 (FY24: 4.5p).
Strong delivery against our strategic objectives:
· Stores: Highly profitable store estate growing revenues significantly
ahead of the retail sector
o Opened +32 net new stores in FY25, adding to our extensive store footprint
which totalled 1,090 as of 31 January 2025.
o Space optimisation programme allowed in-store innovations such as
stationery and kids zones which contributed significantly to LFL store revenue
growth, by underpinning category expansion of gift and celebration essentials,
driving double-digit LFL growth in key categories including confectionery
(+25%), soft toys (+22%) and stationery (+18%).
o Targeted pricing action drove around a third of LFL store revenue growth.
· Categories: Growing share of the celebration occasions market through
expansion of our gift and celebration essentials offer, leveraging our
continued leadership in the card market
o Expanded proposition, with 70% of gift ranges new for FY25 including new
baby, toys, gift food, balloon and confectionery ranges driving LFL growth of
+5.7% in gift and celebration essentials.
o Range development supported higher retail pricing of gifts which
contributed to a +6.7% year-on-year improvement in store Average Basket Value
(ABV) in FY25, with approximately half of all baskets in FY25 including gift
or celebration essentials items.
o Retain our authority within the UK card market with LFL growth of +0.7%
across seasonal and everyday cards, reflecting trend-focused range development
and our strong customer appeal and value credentials.
· Partnerships: Encouraging progress with new agreements and market
entries in FY25
o Full-service partnership model capability now in place and delivering
success with UK partners, leading to rollout for international partners in
FY26.
o Full rollout to the Aldi UK & Ireland estate completed in September
2024 and secured extension of our partnership with The Reject Shop in
Australia, to a new multiyear agreement, including seasonal range supply.
o First wholesale supply agreement with a nationwide US retailer, initially
covering over 1,100 stores with a curated Christmas card range. This was
extended to Valentine's Day and Mother's Day in Q1 FY26, in addition, roll out
of a curated Everyday card and celebration essentials range launched in April
2025 in 93 stores.
o Targeted acquisitions of Garlanna in the Republic of Ireland and Garven in
the US accelerating our partnerships strategy by increasing our international
presence and routes to market.
o Refocusing our partnership model in the Middle East market in the
near-term from low-cost franchise trial to wholesale agreements, closing the
existing four franchised stores in in H1 FY26.
· Online and omnichannel: Continued focus on developing our online
offer and omnichannel propositions
o cardfactory.co.uk LFL sales in line with FY24 as we focused on refining
online ranges to support online margin growth.
o Full online range review undertaken resulting in removal of stock cards to
focus on personalised print on demand alongside an expanded online celebration
essentials range, featuring premium personalised balloons, personalised
tableware and decorations.
o Continued to develop omnichannel propositions as we work to leverage USP
of our extensive store estate. This included improvements made to our
nationwide Click & Collect service, with average order value higher than
online and store ABVs. New balloon appointment trial went live at the end of
Q1 FY26, enabling customers to pre-order inflated balloon arrangements online
and collect in store.
o Decision taken to close gettingpersonal.co.uk as of 31st January 2025 to
focus on driving efficient, profitable online growth at cardfactory.co.uk.
Efficiency and productivity programme
· Building on our proven, proactive approach to managing inflationary
headwinds in FY26 our multiyear 'Simplify and Scale' efficiency and
productivity programme will continue to offset inflationary cost pressures,
alongside sales growth and pricing.
· The annualised benefit of our labour optimisation programme
introduced in H1 FY25, will make a significant contribution to the 'Simplify
and Scale' programme in FY26.
· Additional efficiency and productivity benefits in FY26 will be
driven by investment in our technology infrastructure, operational warehouse
efficiencies; insourcing of third-party manufacturing; and central overhead
efficiencies such as the restructuring following the closure of
gettingpersonal.co.uk and automation of processes.
Current Trading
· Trading through the first months of the new financial year has been
in line with management expectations.
· Good momentum continued across our FY26 Spring seasons of Valentine's
Day and Mother's Day with card range development and new gift and celebration
essentials products resonating strongly with customers.
· New record trading day reported on Saturday before Mother's Day FY26.
Outlook
· The Board's expectations for FY26 remain unchanged and we expect to
deliver mid-to-high single-digit percentage increases in Adjusted PBT in FY26,
with margin in line with FY25 reflecting:
o Continued sales growth, underpinned by LFL growth, new stores and
annualization of acquisitions.
o Annualised benefit of sales and profit contribution from the acquisitions
of Garven and Garlanna.
o Expected average inflation of 4-5% across the cost base, including circa.
£14 million from changes to National Living Wage and Employer National
Insurance contributions.
o Continued benefit of our proven efficiency and productivity programme,
targeting circa. 1% reduction in the underlying cost base before inflation.
o We currently do not expect there to be a material impact from tariffs on
the Group's financial performance in FY26.
· PBT growth will be weighted towards the second half of the year,
following a similar profile as in FY25. This reflects the timing of the
National Living Wage increase in H1, and the majority of efficiency
opportunities in our 'Simplify and Scale' programme, being realised in H2.
· Beyond FY26 we will continue to build on the growth achieved since
our Capital Markets Strategy Update in May 2023. Since FY23, we have added
£80 million in revenue and increased Adjusted PBT by +35%. Against the
backdrop of significantly higher inflation than anticipated we are targeting
Adjusted PBT growth in the mid-to-high single digit percentage range and
mid-single-digit percentage sales growth each year going forwards.
· cardfactory remains well positioned to capitalise upon the
significant opportunity presented by the celebration occasions market across
all countries we operate in.
Preliminary results webcast
There will be a meeting for analysts and investors in Canary Wharf at 10 am.
In order to register to attend the event in person and receive full attendance
details, please contact cardfactory@teneo.com (mailto:cardfactory@teneo.com)
We will also provide a live video and audio webcast of the presentation,
available by registering via the following link:
https://storm-virtual-uk.zoom.us/webinar/register/WN_nI3zL19uTtW3Nqpa1SupeA
(https://storm-virtual-uk.zoom.us/webinar/register/WN_nI3zL19uTtW3Nqpa1SupeA)
A copy of the webcast and the accompanying presentation will be made available
via the cardfactory investor relations website: www.cardfactoryinvestors.com
(http://www.cardfactoryinvestors.com) .
Enquiries:
Card Factory
plc
via Teneo (below)
Darcy Willson-Rymer, Chief Executive Officer
Matthias Seeger, Chief Financial Officer
Teneo
+44 (0) 207
353 4200
Jo Blackshaw / Anthony Di Natale
cardfactory@teneo.com (mailto:cardfactory@teneo.com)
CHAIR'S STATEMENT
Introduction
The strong top and bottom-line growth delivered in the year reflects our
continued clear market leadership in card combined with the emerging strength
of our celebrations proposition. As we progress delivery against our 'Opening
Our New Future' strategy, we begin to see the operational and financial
benefits as we look to meet our ambition of becoming a leading global
celebrations group.
Our unwavering focus on value and quality remains central to our customer
offer. Our ability to innovate and evolve ranges ensures that we are relevant
and accessible to a broadening base of customers. A clear focus on improving
productivity and efficiency enables us to target the lowest possible operating
costs, supporting the achievement of stable profit margins.
The Board recognises and appreciates the hard work and commitment of
colleagues throughout the business. Against a challenging economic background,
the business has continued the cultural journey, with our customers
benefitting from increased customer-centric decision-making that is helping to
build our reputation as a celebrations retailer.
Year in review
FY25 saw encouraging progress against our strategic objectives with our store
estate, in particular, making further good progress through space optimisation
and range development. As a consequence, both Like-for-like card sales and
average basket value increased.
Internationally, FY25 saw encouraging progress. Two further acquisitions, in
the Republic of Ireland and US, will help build our internal capability whilst
adding in-market presence. We are confident that the US market presents a
significant opportunity for the business in the medium term. Our wholesale
model is resonating well with partners both in the UK and internationally,
evidenced by contract renewal and geographical expansion with key partners.
The decision to close gettingpersonal.co.uk as of 31st January 2025 will allow
the business to focus on driving efficient, profitable online growth at
cardfactory.co.uk. The Board recognises the growth potential of our online
business and continues to support the development of this strategic
initiative.
Outlook and macro environment
Trading through the first months of the new financial year has been in line
with management expectations. The Board was encouraged by the good momentum
from the second half of FY25, that continued across our FY26 Spring seasons of
Valentine's Day and Mother's Day. A particular highlight was a new record
trading day being achieved on Saturday before Mother's Day FY26.
The Board's expectations for FY26 remain unchanged; we expect to deliver a
mid-to-high single-digit percentage increase in Adjusted Profit Before Tax in
FY26 with margin expected to be in-line with FY25.
Changes to the rates of the National Living Wage and Employer National
Insurance contributions will result in annual cost inflation of c.£14 million
in FY26. We expect to offset this through a combination of our productivity
and efficiency programme, product range development and retail pricing.
Our capital allocation policy details the methodology for determining the
extent of any surplus cash and how that may be returned to shareholders. In
line with this policy, the Board has recommended a final dividend of 3.6 pence
per share, resulting in a total dividend of 4.8 pence per share for FY25
(FY24: 4.5 pence).
ESG strategy
The Board continued to provide oversight of progress towards the 'Delivering a
Sustainable Future' plan. This plan will deliver on cardfactory's commitment
to combine our focus on maintaining value and business growth with playing our
part in helping to protect the planet, supporting our communities, and
managing the impacts of environmental and social changes on our business and
supply chain. Positive progress was made across all five pillars of the plan:
climate, waste and circularity, protecting nature, people and equity, and
governance.
Board appointments
In June 2024, the Board welcomed Pam Powell as Senior Non-Executive Director,
following Roger Whiteside stepping down. Pam is an internationally experienced
blue-chip consumer FMCG marketeer and brings extensive non-executive and
consumer facing executive experience which will prove valuable to the Board's
strategic debates. Pam was appointed a member of each of the Company's
Remuneration Committee, Audit & Risk Committee and Nomination Committee.
Nathan (Tripp) Lane also stepped down from the Board in July 2024.
Summary
The Board remains confident in the compelling growth opportunity for the
business, which has a clear strategy to become a leading global celebrations
group.
Paul Moody
Chair
7 May 2025
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
Progress on our growth journey continued at pace in FY25 with further strong
revenue and profit growth. As the leading omnichannel retailer of cards, gift
and celebration essentials in the UK and with a growing international
presence, we are well positioned to capitalise upon the exciting opportunity
presented by the celebration occasions market across all the countries we
operate in.
Our ambition is to become a leading global celebrations group. We are
achieving this by reaching more customers, in more locations through our
channels and markets and increasing our share of wallet in the £13.4 billion
UK celebration occasions market. This is underpinned by our vertically
integrated model that drives efficiency and allows us to target the lowest
possible operating costs as a value business.
Colleagues continue to focus on our core values, ensuring we put the customer
first in our decision-making. By doing so, we continue to make good,
profitable progress that is resonating with customers as we deliver on our
purpose of making celebrating life's moments special, and accessible for all.
FY25 performance
In FY25, we achieved strong sales and Adjusted PBT growth in line with market
expectations which was driven by effective execution of our strategy. Our
revenue growth of +6.2% to £542.5 million was ahead of the wider celebration
occasions market. We maintained stable profit margins through disciplined
financial performance and the delivery of our efficiency and productivity
programme which, alongside sales growth, successfully offsets inflationary
impacts.
UK consumers continue to celebrate life's moments, with around 99% of UK
adults shopping for celebrations in the 52 weeks to 26 January 2025. While
Kantar reports a modest -0.8% decline in the celebrations market, improving
momentum emerged towards the end of 2024. cardfactory outperformed the market,
with basket spend up +5.4% versus a -2.0% market decline, supported by a +2.9%
year-on-year rise in market penetration to 61%. Despite higher shopping
frequency, customers remain price sensitive, with value perceptions of
cardfactory driven by low and consistent pricing. Our proposition continues to
resonate strongly in this environment, reinforcing our leadership in value-led
celebration retail.
Our highly profitable store estate delivered revenue growth significantly
ahead of the retail sector in FY25. Total store revenue grew +5.8% with 32 net
new stores opened in FY25, bringing our extensive store footprint to 1,090 as
of 31 January 2025. Our capex light approach to space optimisation also
significantly contributed to LFL Store revenue growth of +3.4% in FY25 as it
continued to underpin strategic category expansion of gift and celebration
essentials. This drove double-digit LFL growth in key categories including
confectionery (+25%), soft toys (+22%) and stationery (+18%).
We continue to grow our share of the celebration occasions market through the
expansion of our gift and celebration essentials offer +5.7% LFL while
leveraging our continued leadership in the card market +0.7% LFL. With 70% of
gift ranges new for FY25, highlights included new baby, toys, gift food and
confectionery ranges, as well as an updated and expanded party range and
balloon offer, where we remain the UK market leader. Range development also
enabled higher retail pricing on gifts which contributed to a +6.7%
year-on-year improvement in average basket value ('ABV') with approximately
half of all baskets in FY25 including gift or celebration essentials items.
Further growth was achieved across both seasonal and everyday cards as we
added more choice through trend-focused range development and our strong value
credentials.
Partnerships revenue grew by 30.6% to £22.2 million including contributions
from Garlanna, acquired in September 2024, and Garven, acquired in December
2024. Both businesses are delivering in line with our expectations as we focus
on identifying and unlocking opportunities in their respective markets. Our
full-service partnership model continued to deliver success with UK partners,
with rollout for international partners in FY26. We completed rollout to the
full Aldi UK & Ireland estate in September 2024 and extended our
partnership with The Reject Shop in Australia, to a new multiyear agreement,
including seasonal range supply. In the US, we secured our first wholesale
supply agreement with a nationwide retailer covering over 1,100 stores,
initially with a curated Christmas card range which was extended to a curated
Valentine's Day and Mother's Day offer in FY26.
We continued to focus on developing our online offer and omnichannel
propositions with cardfactory.co.uk LFL sales in line with FY24 as we refined
our ranges to support online margin growth. The decision was taken to close
gettingpersonal.co.uk as of 31st January 2025 to focus on driving efficient,
profitable online growth at cardfactory.co.uk. Development of our omnichannel
propositions also continued with improvements made to our nationwide Click
& Collect service, with average order value ('AOV') 55% higher than online
AOV, which continues to be materially higher than store ABVs.
Our proven productivity and efficiency programme remains key to offsetting
inflationary impacts and maintaining profit margins. In FY25, this was further
developed into a multiyear 'Simplify and Scale' programme with key initiatives
for the past year including the implementation of a new industry-recognised
labour management system to enable prioritisation of value-add customer
service activity and remove store inefficiencies. Inflation management was
also supported through our pricing methodology with strategic range
development introducing a 'good', 'better' 'best' approach to evolve card
pricing architecture.
Strategy delivery
Two years on from our Capital Markets Strategy Update in FY23, we have made
good progress on our 'Opening Our New Future' growth strategy. By delivering
on our building blocks of growth we are achieving growth ahead of the wider
celebration occasions market, combining our market-leading greeting card offer
with an expanding range of gifts and celebration essentials.
Since FY23, we have added £80 million of sales (+17%) to our business and
increased Adjusted PBT by +35%, despite a much higher level of inflation than
originally anticipated. Our profitable and expanding retail footprint combined
with the increasing penetration of our gift and celebration essentials offer
has delivered a +7.3% store sales CAGR since FY23. We continue to grow our
store network in FY25, including in underpenetrated markets such as London and
Republic of Ireland, and in FY26 we expect new store opening to continue at a
similar rates to those achieved over the past two years.
By leveraging our leadership in card, we are achieving good levels of growing
celebration and gift attachment rates as we continue our transition into a
celebrations destination. Previous work on our space optimisation programme
allowed in-store innovations such as stationery and kids zones which helped
contribute to the strong growth seen from key expanded categories. This
approach is allowing us to further unlock gift and celebration essentials
range expansion while maintaining our authority and choice for card. This is
supported by further card range curation in-store to optimise choice and
release space for new and expanded gift and celebration essential ranges. As
we further develop our marketing and trading strategy, we are continuing to
grow share of our 24 million customers' annual celebration spend, building on
the 1ppts growth in share of wallet we have seen across the past two years.
In FY25, we secured new retail partnerships while expanding existing contracts
as seen through our successes in Aldi and The Reject Shop in Australia, as
well as our first US wholesale agreement. By acquiring well-established,
accretive businesses, which included Garlanna and Garven in FY25, we have been
able to accelerate our plans to create an international footprint. As we
continue with positive discussions with new prospective partners in the UK,
Republic of Ireland and other international markets of interest, we took the
decision to refocus our partnership model in the Middle East market. In the
near-term we will move from the current low-cost franchise trial to broader
wholesale agreements, leading to the closure of the existing four franchised
stores in H1 FY26.
We have made progress building our online presence as part of our omnichannel
strategy. We have stabilised and improved our online platform and have a
fuller understanding of online growth and profit levers. With the foundations
for growth now in place, we recognise that online requires further focus,
which is now underway.
People & culture
At cardfactory we use our cultural transformation as a key growth enabler with
our priorities centred around customer, community and purpose. Our customer
and community focus ensures our customers sit at the heart of our business. At
the same time, it remains vital for us to create an inclusive culture which is
empowered by exceptional leadership and driven by passion and commitment.
Keeping our purpose at the heart of everything we do helps us drive
collective, collaborative decision-making across the business.
Areas of focus in FY25 included colleague induction and onboarding, internal
mobility and talent acquisition, and continuing to develop the colleague
experience. To ensure we maintain our lowest cost to operate proposition and
reflecting the closure of gettingpersonal.co.uk, we undertook a role
restructure leading to a headcount reduction of 49 roles in our support centre
and online fulfilment.
ESG progress
In FY25, we have continued the process of embedding sustainability
considerations across the business, with key focus areas including waste
reduction through product design and operational changes. We progressed our
greenhouse gas emissions reduction initiatives, including a successful AI
energy management system trial across approximately 200 stores with further
rollout to 800 stores planned this year. This forms part of our Net Zero
pathway activity which in FY26 will also include the transition of our diesel
van fleet to plug-in hybrid EVs. We also evolved our 'Giving Something Back'
programme facilitating more opportunities for colleagues to support local
charities and launching a new donation scheme for discontinued stock.
For FY26, at a strategic level we have begun a full supply chain climate risk
review. Operationally, we continue with our plastic reduction work,
eliminating bubble wrap use at Printcraft and cellophane wrap from all
own-label roll wrap.
Summary
cardfactory continues to make good progress delivering on our 'Opening Our New
Future' growth strategy and at the same time we remain proactive in managing
inflationary pressures. With robust operating cash flow and the continued
strength of our balance sheet, we are well-positioned to confidently invest in
our growth ambitions.
Darcy Willson-Rymer
Chief Executive Officer
7 May 2025
CHIEF FINANCIAL OFFICER'S REVIEW
Financial highlights
The Group delivered a robust performance and made significant strides towards
our strategic ambition including continued, resilient growth in stores revenue
and successful expansion in partnerships.
· Total sales of £542.5 million increased by £31.6 million
(+6.2%) year on year.
· Strong revenue growth of +5.8% across our stores in the UK
& Ireland underpinned by Like-for-like (LFL) sales growth of +3.4%
compared to last year, with particularly strong growth in revenue from gift
and celebration essentials.
· Our international growth accelerated with the acquisitions of
Garven in the US and Garlanna in the Republic of Ireland for combined net
consideration of £22.5 million.
· Growth in Adjusted PBT of +6.3% to £66.0 million, at a margin
of 12.2%, margins are in line with prior year as our strong performance and
efficiency programme offset the impact of inflationary headwinds.
· Robust balance sheet, with strong cashflow from operations and
net debt of £58.9 million (FY24: £34.4 million). The net debt position
reflects £43.0 million of acquisitions and dividends during FY25.
· Store portfolio in UK & Ireland stands at 1,090 stores at
31 January 2025, up by +32 from 1,058 stores on 31 January 2024.
· Successful refinancing in April 2024, delivered a new four-year
£125 million committed revolving credit facility which provides greater
flexibility and a firm platform from which we can execute our strategy.
· Dividend per share for FY25 progressively increased by 6.6% to
4.8 pence with a 1.2 pence interim dividend paid in December 2024 and a final
proposed dividend of 3.6 pence per share.
Financial performance
FY25 FY24
Revenue £542.5m £510.9m
EBITDA £127.5m £122.6m
Adjusted Profit Before Tax £66.0m £62.1m
Profit Before Tax £64.1m £65.6m
Adjusted earnings per share 14.3 pence 13.5 pence
Basic earnings per share 13.6 pence 14.4 pence
Dividend per share 4.8 pence 4.5 pence
Net debt £58.9m £34.4m
Cash from operations £105.6m £118.7m
Adjusted Leverage (exc. Leases) 0.7x 0.4x
Adjusted PBT excludes transactions that are either one-off in nature or
otherwise not part of the Group's underlying trading performance. In FY25 this
includes one-off restructuring costs (£1.9 million), acquisition-related
costs (£1.0 million), refinancing costs (£0.5 million) and unrealised gains
on derivative contracts (£1.5 million).
Sales
Total Sales
FY25 FY24 Change
£m £m %
Stores 506.8 478.9 +5.8%
cardfactory Online 8.8 8.8 +0.1%
Getting Personal 4.4 5.9 -25.4%
Partnerships 22.2 17.0 +30.6%
Other 0.3 0.3 -
Group 542.5 510.9 +6.2%
LFL Sales
FY25 FY24
cardfactory Stores +3.4% +7.7%
cardfactory Online +0.1% +0.4%
cardfactory LFL +3.3% +7.6%
Getting Personal -27.4% -26.1%
Total Group sales for FY25 were £542.5 million, an increase of £31.6 million
or +6.2% when compared to the previous year. The sales growth in FY25 was
underpinned by LFL sales in cardfactory stores of +3.4% and a £5.2 million
increase in partnerships revenue, including £3.9 million of revenue for
Garlanna and Garven, which we acquired in the year.
Store sales across the UK & Ireland of £506.8 million increased by £27.9
million or +5.8% compared to the prior year, with LFL sales of +3.4%. Everyday
ranges performed strongly, with gifts (+17.8%) and celebration essentials
(+3.5%) showing continued positive momentum on LFL sales, supported by
positive LFL growth in everyday card. Approximately a third of the total LFL
growth was delivered through targeted price increases. Total store sales and
LFL store sales both outperformed the wider retail sector LFL sales as general
high street footfall was down year-on-year.
Average basket values increased by +6.7%. The increase in basket values was
supported by higher average selling prices, delivered via a combination of the
price activity described above and continuing to expand and develop our range,
particularly in gift and celebration essentials. Gift and celebration
essentials had positive LFL growth of 5.6% compared to 2024 and now represents
50.2% of total sales, with approximately one in every two baskets now
containing a gift or celebration essentials product.
We continue to optimise and improve our store portfolio and during FY25 added
32 net new stores to our store network. We opened 40 new stores and closed 8
increasing our portfolio to 1,090 stores. The value of our flexible approach
to the store portfolio is illustrated in the incremental sales growth
delivered by non-LFL sales in the year.
Our partnerships business, which focuses principally on B2B sales, delivered
total sales of £22.2 million in FY25, compared to £17.0 million in FY24.
This included an £11.6 million contribution from SA Greetings (FY24: £10.4
million) as well as a £3.9 million contribution from Garlanna and Garven
since they were acquired during the year in September and December 2024
respectively. Other partnerships delivered total sales of £6.7 million,
including increased contributions from the annualisation of our offer across
the Matalan store estate in the UK and the expansion of our existing agreement
with Aldi in both the UK & Ireland.
In online, cardfactory.co.uk delivered positive sales growth towards the end
of the year resulting in LFL growth for the full year of +0.1%. Following the
cessation of trade on the Getting Personal platform, we are now focused on
driving efficient, profitable growth at cardfactory.co.uk.
Within Online, Click & Collect is a key component of our omnichannel
offer, differentiating cardfactory.co.uk from pure play online and bricks and
mortar retailers in allowing customers to Click & Collect and, since the
year end, book balloon appointments in a select number of trial stores. Total
online sales (including Getting Personal) declined by £1.5 million, entirely
driven by Getting Personal. Following a review of our online offer, we made
the decision to close the Getting Personal platform from 31 January 2025.
Sales on our cardfactory.co.uk platform grew slightly in the year as we
focused on delivering improved margins.
Gross profit
FY25 FY25 FY24 FY24
£m % Sales £m % Sales
Group sales 542.5 510.9
COGs (164.4) (30.3%) (155.9) (30.5%)
Product margin - constant currency 378.1 69.7% 355.0 69.5%
FX (losses)/gains (0.8) (0.1%) 0.6 0.1%
Product margin 377.3 69.5% 355.6 69.6%
Store & warehouse wages (134.4) (24.8%) (124.0) (24.3%)
Property costs (25.0) (4.6%) (24.7) (4.8%)
Other direct costs (24.1) (4.4%) (22.0) (4.3%)
Gross profit 193.8 35.7% 184.9 36.2%
Adjusted gross profit 192.9 35.6% 184.9 36.2%
Product margin calculated on a constant currency basis using a consistent
GBPUSD exchange rate across both periods. FX gains and losses reflect
conversion from the constant rate to prevailing market rates.
Overall gross profit for the Group increased by £8.9 million, or +4.8%, to
£193.8 million. This reflects a slight reduction in gross margin from 36.2%
in FY24 to 35.7% this year, largely due to increased wage costs and a lower
effective FX rate. The cost of goods sold (COGs) figure for FY25 includes a
one-off impact of £0.6 million relating to the cessation of trade of the
Getting Personal platform which reduced the underlying gross margin by 0.2%.
Product margin, when calculated using a constant GBPUSD exchange rate
year-on-year, was favourable with an increase of +0.2ppts to 69.7%. This
product margin improvement was achieved in spite of a slight shift towards
lower-margin non-card products in the sales mix, 51.8% non-card in FY25 which
is an increase on a 50.5% proportion in FY24.
The Group purchases approximately half of its goods for resale in US Dollars
from suppliers in the Far East. Our well-established currency hedging policy
continues to protect us against unexpected volatility in GBPUSD exchange
rates. Our average USD delivered rate in FY25 of 1.2589 was lower than the
prior year (FY24: 1.3121) as expected, which reflects market rates at the time
hedges were entered into. Our hedging policy operates over a three-year
period, with most hedges placed in the 12-24 months prior to delivery, which
was a particularly volatile period for FY25 including record historical low
GBPUSD rates in late 2022. The average spot rate during FY22 and FY23, when
most of our FY25 deliveries were contracted, was 1.2365. Going forward we
expect average delivered rates to move slightly higher, reflecting subsequent
increases in market rates.
The net foreign exchange (FX) loss of £0.8 million includes £1.5 million of
unrealised gains on our derivative portfolio that will mature in future years
and do not reflect current period trading performance. Given the size of these
gains in FY25, we have excluded the gain from our Adjusted results. Previously
these values have been negligible. The increase in underlying FX loss
year-on-year reflects the reduction in average delivered rates described
above.
Store and warehouse wages increased by £10.4 million (8.5%), which included
the impact of the National Living Wage increasing by +9.7% in April 2023 and
+9.8% from April 2024, as well as the further expansion of the store
portfolio.
Building on our strong track record of managing inflation through a
combination of pricing, efficiency and productivity, we have carried out a
robust programme of activity to drive profit margin, as previously guided.
We have actively managed the impact of specific retail inflationary pressures,
successfully offsetting a significant proportion of these inflationary wage
increases through driving greater efficiencies and improving productivity in
our stores via the introduction of a new industry-recognised labour management
system implemented in H1.This is optimising labour costs, prioritising
value-add customer service activity and removing inefficiencies whilst also
allowing us to reduce temporary seasonal and agency labour costs.
This detailed programme also includes evolving our pricing architecture
through a 'good, better, best' approach to range development across card, gift
and celebration essentials, enabling product margin improvements.
Property costs, which cover business rates, insurance and service charges
(rent is reflected in depreciation and interest costs as a result of the lease
accounting rules in IFRS 16) increased by £0.3 million or 1.2%, compared to
an increase in the overall size of the store portfolio of 3%.
Other direct expenses include warehouse costs, store opening costs, utilities,
maintenance, point of sale and pay-per-click expenditure. We have seen some
direct costs increase year on year including energy commodity costs and costs
of transmission and distribution. The Group continued to benefit from its
long-term energy hedge in FY25, which fixed commodity unit costs at FY22
levels until September 2024. Following expiration of this hedge, we saw
increases in commodity costs in the last third of the year. We continue to
have good visibility of commodity costs going forward, with the majority of
the Group's requirements out to September 2026 secured.
EBITDA & operating profit
FY25 FY25 FY24 FY24
£m % Sales £m % Sales
Group sales 542.5 510.9
Gross profit 193.8 35.7% 184.9 36.2%
Other operating income - - 2.0 0.4%
Operating expenses (66.3) (12.2%) (64.3) (12.6%)
EBITDA 127.5 23.5% 122.6 24.0%
Adjusted EBITDA 128.6 23.7% 120.6 23.6%
Depreciation & amortisation (12.2) (2.2%) (10.4) (2.0%)
Right-of-use asset depreciation (36.4) (6.7%) (34.7) (6.8%)
Impairment reversals/(charges) 0.4 0.1% (1.1) (0.2%)
Operating profit 79.3 14.6% 76.4 15.0%
Adjusted Operating profit 80.7 14.9% 75.5 14.8%
Operating expenses (excluding depreciation and amortisation) include
remuneration for central and regional management, business support functions,
design studio costs and business insurance together with central overheads and
administration costs.
Total operating expenses increased by £2.0 million compared to the prior
year, £3.4 million of which arose from acquisition-related activity,
annualisation of SA Greetings, plus the in-year acquisition of Garven and
Garlanna. This also includes the one-off impact of a write down of trade
debtors at SA Greetings. We have also incurred one-off restructuring costs
associated with the closure of the Getting Personal website and streamlining
central support operations as well as transaction costs related to the
acquisitions of Garlanna and Garven totalling £1.9 million, which have been
excluded from Adjusted results.
We have seen successful early results from our productivity and efficiency
programme, which saw operating expenditure prior to acquisitions and one-off
costs decrease. This programme and the focus on cost efficiency has enabled us
to continue to invest in key areas such as major long-term IT projects and in
marketing, where spend has historically been very low, whilst reducing our
overall core expenditure. The net impact of the above has seen the operating
expenses as a percentage of sales reduce by 0.3% year on year in spite of the
inflationary headwinds seen in FY25.
As a result, driven primarily by the improved trading performance, EBITDA
improved to £127.5 million (FY24: £122.6 million); however, the reduced
gross margin as a result of increase in the National Living Wage, means EBITDA
margin fell slightly from 24.0% to 23.5%.
Right of use asset depreciation increased by £1.7m in FY25 as a result of an
overall increase in the store portfolio in the past couple of years, a higher
overall average asset value per store and gains in FY24 on disposal of lease
assets. We maintain an average lease term at inception across the portfolio of
five years, with a break clause typically at three years. On average 20% of
the lease portfolio renews each year, enabling us to capture reductions in
market rents where available. During FY25, we achieved net rent reductions on
average of around 7% which will flow through depreciation charges in future
years.
EBITDA after deducting depreciation and interest charges relating to store
leases, was £83.5 million (a margin of 15.4%) in FY25 compared to £81.8
million in FY24 (a margin of 16.0%).
Depreciation and amortisation, at £12.2 million, was higher than the prior
year which reflects the increased capital investment over the last two years
and also amortisation related to intangible assets, principally
customer-related assets and brands, recognised as a result of the acquisitions
of Garlanna and Garven.
Profit Before Tax
FY25 FY25 FY24 FY24
£m % Sales £m % Sales
Group sales 542.5 510.9
Operating profit 79.3 14.6% 76.4 15.0%
Gain on acquisition - - 2.6 0.5%
Net finance costs (15.2) (2.8%) (13.4) (2.6%)
Profit Before Tax 64.1 11.8% 65.6 12.8%
Non-underlying transactions 1.9 0.4% (3.5) (0.6%)
Adjusted Profit Before Tax 66.0 12.2% 62.1 12.2%
Net finance costs increased by £1.8 million to £15.2 million, which includes
interest paid on bank debt, amortisation of refinancing costs and lease
interest, offset by interest income earned on cash investments.
The composition of net finance costs is set out in the table below.
FY25 FY24
£m £m
Interest on bank loans and overdrafts 6.4 6.5
Interest received on deposits (0.2) -
Loan issue cost amortisation 1.0 0.6
IFRS 16 leases interest 8.0 6.3
Total finance expenses 15.2 13.4
FY25 FY24
£m £m
IFRS 16 depreciation 36.0 34.5
IFRS 16 leases interest 8.0 6.3
Total IFRS 16 44.0 40.8
IFRS 16 depreciation includes impairment and gains/losses on disposal. Total
costs in this table reflect lease costs not included in the calculation of
EBITDA, above.
The average cost of debt, taking into account margin, indexation and the
impact of hedging activity, in the period was 7.1% (FY24: 7.4%). This decrease
was a result of a lower margin rate achieved in the refinancing completed in
April 2024, in addition to gradually lowering market rates of interest. As a
result, bank loan interest reduced year on year despite a higher level of
overall borrowings as a result of the recommencement of dividends and the
acquisitions of Garven and Garlanna.
Loan issue cost amortisation of £1.0 million includes a £0.5 million one off
charge as a result of the refinancing completed in April 2024. IFRS 16 leases
interest has increased, reflecting both the increase in size of the store
portfolio and changes in market interest rates reflected in renewals. Our
average lease term is five years, with higher rates of interest applicable on
new and renewed leases compared to those entered into five years ago.
Adjusted Profit Before Tax, which excludes the impact of one-off transactions
in the period that are not reflective of the Group's underlying trading
performance, was £66.0 million compared to £62.1 million in FY24, an
increase of 6.3%. Adjusted PBT margin of 12.2% is in line with the prior year,
despite the significant inflationary headwinds seen in FY25.
Reported Profit Before Tax for the year was £64.1 million, down £1.5 million
from £65.6 million for the previous year.
The total reported Profit Before Tax for the year includes non-recurring
finance charges of £0.5 million in respect of the refinancing completed in
April 2024, £1.0 million of transaction costs and amortisation related to the
acquisitions of Garven and Garlanna, £1.9 million of one-off restructuring
costs and unrealised gains on derivatives of £1.5 million. These items are
not considered to be reflective of the underlying trading performance of the
Group or they are one-off in nature and as such have been excluded from
Adjusted PBT. (FY24: One-off gains in relation to SA Greetings gain, Covid
provision release and Getting Personal impairment totalling £3.5 million
excluded from Adjusted PBT).
Taxation
The tax charge for FY25 of £16.3 million reflects an effective tax rate of
25.4% and increased £0.2 million compared to FY24.
The effective rate of tax for the year is higher than the equivalent rate
applied for the same period last year (24.5%) largely due to the annualisation
of increases in corporation tax rates effective from 1 April 2023. The rate is
slightly higher than the standard rate applicable to the current financial
year (25.0%).
The Group makes UK corporation tax payments under the 'Very Large' companies'
regime and thus pays its expected tax bill for the financial year in quarterly
instalments in advance. Corporation tax payments in FY25 totalled £16.7
million (FY24: £13.5 million).
Earnings per share
The net reported result for the year was a Profit after tax of £47.8 million,
decreased from £49.5 million in FY24. As a result, basic earnings per share
(EPS) for the year was 13.8 pence, with diluted EPS of 13.7 pence.
FY25 FY24
Profit after tax (£m) 47.8 49.5
Adjusted EPS (pence) 14.3 pence 13.5 pence
Basic EPS (pence) 13.8 pence 14.4 pence
Diluted EPS (pence) 13.7 pence 14.3 pence
Adjusted EPS, which excludes the post-tax effect of one-off transactions in
the period, was 14.3 pence compared to 13.5 pence in FY24. A reconciliation of
all Alternative Performance Measures is set out in the appendix below.
Cash flows
FY25 FY24
£m £m
Cash from Operating Activities (after tax) 88.9 105.2
Cash used in Investing Activities (40.5) (30.0)
Cash used in Financing Activities (42.9) (73.2)
Impact of foreign currency exchange rates (0.1) (0.8)
Net Cash Flow for Year 5.4 1.2
Operating cash flows less lease repayments 43.3 61.5
Operating cash conversion (%) 82.9% 96.8%
Free Cash Flow 17.3 27.1
Adjusted Free Cash Flow 29.0 27.1
The Group continued to deliver strong cash performance in FY25, with cash from
operations (before corporation tax payments) of £105.6 million. This reflects
cash outflows considered one-off in nature of £11.7 million (related to the
refinancing costs, acquisition transaction costs and Covid provision
settlements) or due to timing differences on working capital outflows due to
an additional weekly payment run falling into FY25 compared to the previous
and subsequent year. As a result cash from operations decreased from £118.7
million in the prior year.
Working capital outflow increased, partially due to timing of payments
considered one-off in nature of £6.0 million compared to the prior year.
Total fees of £1.6 million were paid as a result of the refinancing completed
in April 2024. Furthermore, £3.3 million was paid in FY25 as a settlement of
part of the remaining Covid provision which is non-recurring.
Operating cash conversion, which is the ratio of Cash from Operations to
EBITDA, decreased as a result of the outflows in working capital as above to
82.9% (FY24: 96.8%).
Capital expenditure decreased to £18.4 million in the year (FY24: £27.8
million) as expected, as we continued to invest in infrastructure and growth
projects to support our strategy.
Free cash flow, which we define as net cash before M&A activity,
distributions or debt repayments, was £17.3 million. Adjusted free cash flow
increased year on year to £29.0 million when the impact of one-off cash
outflows are excluded.
We invested £22.5 million in the acquisitions of Garven and Garlanna during
the year and paid total dividends of £19.8 million in respect of a final
dividend for FY24 (4.5 pence per share) and an interim dividend for FY25 (1.2
pence per share).
Acquisitions
During the year, we accelerated our international growth plans by completing
two acquisitions, Garlanna in the Republic of Ireland and Garven in the United
States.
On 4 September 2024 the Group acquired 100% of the issued equity of Garlanna
Holdings Limited ('Garlanna') for an enterprise value of €3.6 million (£2.9
million) calculated on a cash free, debt free basis. This consideration was
settled in cash funded from existing facilities.
Garlanna trades as a publisher and wholesale supplier of cards, wrap and gift
bags in the Republic of Ireland. Garlanna's historical revenues have typically
been less than 1% of the consolidated annual revenue of the Group. The
acquisition has strengthened the Group's position within the Republic of
Ireland market and is expected to provide further wholesale opportunities,
particularly in the convenience sector.
On 4 December 2024 the Group acquired 100% of the members' interest of Garven
Holdings, LLC ('Garven') for an enterprise value of $25.0 million (£19.6
million) calculated on a cash free, debt free basis. This consideration was
settled in cash funded from existing facilities.
In line with cardfactory's growth plan, this acquisition accelerates our
partnerships strategy in one of our key international target markets. It marks
cardfactory's physical entry into the US gift and celebration essentials
market, which represents the biggest market globally at c.£70 billion. Garven
has an established customer base of general and specialty retailers which will
allow cardfactory to drive design and buying synergies, alongside
opportunities to introduce its own ranges into the US wholesale market.
Garven's historical revenues have typically been less than 5% of the
consolidated annual revenue of the Group. We have started to explore the full
range of potential growth opportunities with our new colleagues in both
businesses and enhancing our presence and offer in both the US and Ireland.
We are working to explore and identify growth opportunities with our new
colleagues in both businesses, and enhancing our presence and offer in both
the US and Ireland
The accounting for the acquisitions has been completed and has resulted in the
recognition of intangible assets of £12.9 million and £8.7 million of
goodwill. We expect to exclude the amortisation of acquired intangibles from
our Adjusted PBT going forward.
Capital expenditure
Total capital investments to grow the business and deliver the strategy were
£18.4 million in FY25, decreased from £27.8 million in FY24.
Key investments included a point of sale (POS) till upgrade in stores which is
expected to roll out across FY26, developing our network infrastructure in
stores and the continued delivery of our long-term project to upgrade our
business support systems, with extended ERP functionality in relation to
inventory management.
In addition, we continue to invest in opening new stores and refreshing the
store estate, including continued delivery of our store optimisation
programme, which has enabled expansion of gift and celebration essentials in
store , without negatively impacting card LFLs.
Looking forward, we continue to expect capital expenditure will average £20
million per annum through to FY27. FY26 priorities include the POS till
rollout across our store estate, implementation of enhanced ERP functionality
and other infrastructure projects to enable us to deliver online growth and
improved partnership capabilities.
Net debt
FY25 FY25 FY24 FY24
£m Leverage £m Leverage
Current borrowings 0.1 7.1
Non-current borrowings 73.9 37.9
Total Borrowings 74.0 45.0
Add back capitalised debt costs 1.4 0.7
Gross Bank Debt 75.4 45.7
Less cash (16.5) (11.3)
Net Debt (exc. Leases) 58.9 34.4
Leverage (exc. Leases) 0.5x 0.3x
Adjusted Leverage (exc. Leases) 0.7x 0.4x
Lease Liabilities 110.4 100.8
Net Debt (inc. Leases) 169.3 135.2
Leverage (inc. Leases) 1.3x 1.2x
Our balance sheet remains strong. In FY25 we delivered strong underlying
operating cashflows and made disciplined investments in line with the
principles of our capital allocation policy.
Net debt increased to £58.9 million in FY25, which includes expenditure on
acquisitions, dividend payments and the one-off cash flow impacts described
above. We have accelerated our international growth strategy with the
acquisitions of Garven and Garlanna, for cash consideration of £22.5 million,
net of cash acquired as above. We have also recommenced dividends payments in
FY25, with total payments of £19.8 million.
The Group focuses on net debt excluding lease liabilities, this reflects the
way the Group's covenants are calculated in its financing facilities. Leverage
compares the ratio of net debt to EBITDA as calculated above, Adjusted
Leverage reflects adjustments in the Group's bank facilities to deduct
lease-related EBITDA charges from EBITDA. A full description, calculation and
reconciliation of Alternative Performance Measures is provided in the appendix
below. Both metrics remain comfortably below the Group's long-term target to
keep leverage below 1.5x throughout the year.
The Group's banking facilities and amounts drawn in the current and prior
periods are summarised in the table below:
31 January 31 January
2025 2024
Facility £m £m
£18.75m Term Loan 'B' - 18.8
£125m/£100m Revolving Credit Facility 75.0 26.0
Overdraft facilities - 0.2
Property mortgage 0.4 0.6
Accrued interest - 0.1
Gross Bank Debt 75.4 45.7
On 26 April 2024, the Group successfully concluded a refinancing of its debt
facilities, having agreed a new four-year £125 million committed revolving
credit facility with a syndicate of banks. The previous revolving credit
facility and Term Loan B have been fully repaid and cancelled.
The new facilities have an initial maturity date in April 2028, with options
to extend by up to 19 months, subject to lender approval. The facilities
include a £75 million accordion, which can be drawn subject to lender
approval. The interest margin on the facilities is dependent upon the Group's
leverage position, with margins between 1.9-2.8% which is lower than the
previous facilities.
The new facilities include covenants for a maximum leverage ratio (calculated
as net debt excluding leases divided by EBITDA less rent costs for the prior
12 months) of 2.5x and a fixed charge cover ratio of at least 1.75x. The
leverage covenant is consistent with the Group's definition of Adjusted
Leverage. The Group expects to operate comfortably within these covenant
levels for the foreseeable future. These facilities provide a firm platform
from which we can execute our strategy with all previous dividend and capital
restrictions removed.
At 31 January 2025 the Group had undrawn committed facilities of £48.8
million (FY24: £74.0 million), resulting in total cash and committed
facilities of £65.3 million (FY23: £85.3 million)
The Group's cash generation profile typically follows an annualised pattern,
with higher cash outflows in the first half of the year associated with lower
seasonal sales and investment in working capital ahead of the Christmas
season. The inverse is then usually true in the second half, as Christmas
sales led to reduced stock levels and higher cash inflows. As a result, net
debt at the end of the year is usually lower than the intra-year peak, which
typically occurs during the third quarter and also higher than the intra-year
low which is usually at the end of December. The Group's intra-year working
capital requirement (reflecting the difference between these two points) is
typically £70-80 million.
Capital structure and distributions
The Group has a disciplined capital allocation approach, which aims to balance
investing to deliver the strategy with sustainable, progressive cash returns
to shareholders and long-term growth in shareholder value.
Our capital allocation policy has four key tenets, each with relevant
guardrails and controls designed to ensure balanced application:
1. Maintain a strong balance sheet, targeting a maximum leverage of 1.5x
during the year.
2. Invest to deliver the strategy, investment to accelerate progress must
deliver attractive returns relative to the cost of capital.
3. Regular, progressive cash returns to shareholders via an ordinary
dividend with dividend cover between 2-3x adjusted earnings.
4. Disciplined return of surplus cash to shareholders, total returns will
not exceed free cash generated.
Investment may include M&A activity, where the Board considers that the
proposed transaction delivers both attractive returns and a significant
enhancement or acceleration to our strategic objectives.
During FY25, we invested £22.5 million in the acquisitions of Garlanna and
Garven, as described above.
On 24 September 2025, the Board declared an interim dividend for FY25 of 1.2
pence per share which was paid on 11 December 2025 to shareholders on the
register on 1 November 2024.
At the Annual General Meeting on 19 June 2025, the Board will recommend to
shareholders a final dividend of 3.6 pence per share for the year. If
approved, the dividend will be paid on 27 June 2025 with a record date of 30
May 2025.
At the present time, considering the ordinary dividends paid and proposed in
respect of FY24 and FY25, completed acquisitions, the Group's liquidity
profile and available cash and committed facilities for FY26, the Board does
not consider there to be surplus cash for further returns.
The Board remains confident in the future cash flow generation prospects of
the Group and, in future, where the Board concludes that the Group has excess
cash, taking into account, inter alia, the performance and prospects of the
Group, together with any potential investment opportunities, the Board expects
to make additional returns to shareholders. The Board will consider at the
time the most appropriate method of returning such cash to shareholders.
Outlook
The Board remains confident in the compelling growth opportunity for our
business, in particular to grow our share of our customers' total celebrations
spend.
Our expectation to deliver mid-to-high single digit percentage growth in
Adjusted Profit Before Tax in FY26 is unchanged.
This will be underpinned by the continued growth of our core stores business,
integration and delivery from our acquired businesses and ongoing successful
execution of our efficiency and productivity programme to maintain PBT margin
rates.
Further, we expect to continue to be significantly cash generative, supporting
continued progressive cash returns to shareholders in line with our capital
allocation policy.
The macro-environment remains uncertain and cost inflation, particularly in
wages and employment taxes in the UK will continue at elevated levels into
FY26.
We are well placed to manage these challenges and are confident in our ability
to offset cost inflation over the course of the year to deliver our
expectation of profit growth. We currently expect the phasing of profit
delivery in FY26 to be similar to FY25, reflecting the seasonal nature of the
business and the timing of wage and tax inflation in H1.
Matthias Seeger
Chief Financial Officer
7 May 2025
Condensed consolidated financial statements
Consolidated income statement for the year ended 31 January 2025
Note 2025 2024
£'m £'m
Revenue 4 542.5 510.9
Cost of sales (348.7) (326.0)
Gross profit 193.8 184.9
Other operating income 20 - 2.0
Operating expenses 5 (114.5) (110.5)
Operating profit 5 79.3 76.4
Gain on bargain purchase - 2.6
Finance income 8 0.2 -
Finance expense 8 (15.4) (13.4)
Profit before tax 64.1 65.6
Taxation 9 (16.3) (16.1)
Profit for the year 47.8 49.5
Earnings per share Pence Pence
- Basic 11 13.8 14.4
- Diluted 11 13.7 14.3
All activities relate to continuing operations.
Management assess the underlying performance of the Group based on the
adjusted profit before tax of £66.0 million in FY25 (2024: £62.1 million).
After tax, this gives adjusted earnings per share of 14.3 pence (2024: 13.5
pence).
Consolidated statement of comprehensive income
For the year ended 31 January 2025
2025 2024
£'m £'m
Profit for the year 47.8 49.5
Items that may be recycled subsequently into profit or loss:
Exchange differences on translation of foreign operations (0.2) (0.5)
Cash flow hedges - changes in fair value 1.4 (2.9)
Cost of hedging reserve - changes in fair value (0.1) 0.1
Tax relating to components of other comprehensive income 9 (0.4) 0.7
Other comprehensive income for the period, net of income tax 0.7 (2.6)
Total comprehensive income for the period attributable to equity shareholders 48.5 46.9
of the parent
Consolidated statement of financial position
As at 31 January 2025
Note 2025 2024
£'m £'m
Non-current assets
Intangible assets 12 356.5 331.4
Property, plant and equipment 13 48.7 45.9
Right of use assets 14 110.2 99.2
Deferred tax assets 0.6 1.2
Derivative financial instruments 0.9 0.6
516.9 478.3
Current assets
Inventories 15 61.1 50.0
Trade and other receivables 17.0 11.6
Tax receivable 1.7 -
Derivative financial instruments 2.4 0.9
Cash at bank and in hand 16 16.5 11.3
98.7 73.8
Total assets 615.6 552.1
Current liabilities
Borrowings 17 (0.1) (7.1)
Lease liabilities 14 (21.7) (25.3)
Trade and other payables (76.8) (80.1)
Provisions 20 (5.4) (7.5)
Tax payable - (0.4)
Derivative financial instruments (0.3) (1.7)
(104.3) (122.1)
Non-current liabilities
Borrowings 17 (73.9) (37.9)
Lease liabilities 14 (88.7) (75.5)
Deferred tax liabilities (1.4) -
Derivative financial instruments (0.4) (0.8)
(164.4) (114.2)
Total liabilities (268.7) (236.3)
Net assets 346.9 315.8
Equity
Share capital 3.5 3.5
Share premium 203.2 202.7
Hedging reserve 1.0 (0.6)
Cost of hedging reserve (0.1) -
Reverse acquisition reserve (0.5) (0.5)
Merger reserve 2.7 2.7
Translation reserve (0.6) (0.4)
Retained earnings 137.7 108.4
Equity attributable to equity holders of the parent 346.9 315.8
Consolidated statement of changes in equity
For the year ended 31 January 2025
Share capital Share premium Hedging reserve Cost of hedging reserve Reverse acquisition reserve Merger reserve Translation reserve Retained earnings Total
equity
£'m £'m £'m £'m £'m £'m £'m £'m
£'m
At 31 January 2023 3.4 202.2 3.5 (0.1) (0.5) 2.7 0.1 56.9 268.2
Total comprehensive income for the period
Profit or loss - - - - - - - 49.5 49.5
Other comprehensive income - - (2.2) 0.1 - - (0.5) 0.1 (2.5)
- - (2.2) 0.1 - - (0.5) 49.6 47.0
Hedging (losses) and costs of hedging transferred to the cost of inventory - - (2.5) -- -- -- -- -- (2.5)
Deferred tax on transfers to inventory -- - 0.6 - - - - - 0.6
Deferred tax related to Share-based payments -- - -- - - - - (0.2) (0.2)
Transactions with owners, recorded directly in equity
Shares issued 0.1 0.5 - - - - - - 0.6
Share-based payment charges - - - - - - - 2.1 2.1
Dividends (note 10) - - - - - - - - -
Total contributions by and distributions to owners 0.1 0.5 - - - - - 2.1 2.7
At 31 January 2024 3.5 202.7 (0.6) - (0.5) 2.7 (0.4) 108.4 315.8
Total comprehensive income for the period
Profit or loss - - - - - - - 47.8 47.8
Other comprehensive income - - 1.4 (0.1) - - (0.2) (0.4) 0.7
- - 1.4 (0.1) - - (0.2) 47.4 48.5
Hedging gains and costs of hedging transferred to the cost of inventory - - 0.2 -- -- -- -- -- 0.2
Deferred tax related to Share-based payments - - - - - - - (0.1) (0.1)
Transactions with owners, recorded directly in equity
Shares issued - 0.5 - - - - - - 0.5
Share-based payment charges - - - - - - - 2.3 2.3
Dividends (note 10)(1) - - - - - - - (20.3) (20.3)
Total contributions by and distributions to owners - 0.5 - - - - - (18.0) (17.5)
At 31 January 2025 3.5 203.2 1.0 (0.1) (0.5) 2.7 (0.6) 137.7 346.9
(1) Dividends include £0.5 million of dividend equivalents payable on
employee share awards.
Consolidated cash flow statement
For the year ended 31 January 2025
Note 2025 2024
£'m £'m
Cash from operations 18 105.6 118.7
Corporation tax paid (16.7) (13.5)
Net cash inflow from operating activities 88.9 105.2
Cash flows from investing activities
Interest received on bank deposits 8 0.2 -
Purchase of property, plant and equipment 13 (11.4) (18.8)
Purchase of intangible assets 12 (7.0) (9.0)
Acquisition of subsidiaries net of cash acquired 22 (22.5) (2.2)
Proceeds from disposal of fixed assets 0.2 -
Net cash outflow from investing activities (40.5) (30.0)
Cash flows from financing activities
Interest paid on bank borrowings 8 (6.4) (6.5)
Proceeds from bank borrowings 19 258.5 167.0
Repayment of bank borrowings 19 (228.5) (190.6)
Other financing costs paid 8 (1.6) -
Shares issued under employee share schemes 0.5 0.6
Payment of lease liabilities 19 (37.6) (37.5)
Interest paid in respect of lease liabilities 19 (8.0) (6.2)
Dividends paid 10 (19.8) -
Net cash outflow from financing activities (42.9) (73.2)
Impact of changes in foreign exchange rates (0.1) (0.8)
Net increase in cash and cash equivalents 5.4 1.2
Cash and cash equivalents at the beginning of the year 11.1 9.9
Closing cash and cash equivalents 16 16.5 11.1
Notes to the condensed consolidated financial statements
1 General information
Card Factory plc ('the Company') is a public limited company incorporated in
the United Kingdom. The Company is domiciled in the United Kingdom and its
registered office is Century House, Brunel Road, 41 Industrial Estate,
Wakefield WF2 0XG.
The Group financial statements consolidate those of the Company and its
subsidiaries (together referred to as the 'Group').
2 Basis of preparation
This preliminary announcement and condensed consolidated financial statements
have been prepared in accordance with the recognition and measurement
principles of UK-adopted International Accounting Standards ('UK-IFRS') in
conformity with the requirements of the Companies Act 2006.
It does not include all the information required for full annual accounts. The
financial information contained in this preliminary announcement does not
constitute the company's statutory accounts for the years ended 31 January
2025 ('FY25') or 31 January 2024 ('FY24') but is derived from these accounts.
Statutory accounts for the year ended 31 January 2024 have been delivered to
the registrar of companies, and those for the year ended 31 January 2025 will
be delivered to the registrar in due course. The auditor has reported on those
accounts; the audit reports were (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
Going concern basis of accounting
The Board continues to have a reasonable expectation that both the Group and
the parent company have adequate resources to continue in operation for at
least the next 12 months and that the going concern basis of accounting
remains appropriate.
The Group has delivered a strong financial performance in the current
financial year, with continued growth in sales and good progress towards our
overall strategic goals. Furthermore, the Group has delivered robust operating
cash flows before movements in working capital. Trading since the balance
sheet date has remained in line with expectations and there have been no
material events that have adversely affected the Group's liquidity headroom.
On 26 April 2024, the Group entered into an updated £125 million revolving
credit facility. The new facilities have an initial maturity date in April
2028, with options to extend by up to 19 months, subject to lender approval.
The facilities include an uncommitted £75 million accordion, which can be
drawn subject to lender approval. The interest margin on the facilities is
dependent upon the Group's leverage position, with margins between 1.9-2.8%
which is lower than the previous facilities. The new facilities include
covenants for a maximum leverage ratio (calculated as net debt excluding
leases divided by EBITDA less rent costs for the prior 12 months) of 2.5x and
a fixed charge cover ratio of at least 1.75x. The Group expects to operate
comfortably within these covenant levels for the foreseeable future.
The Board believes that the updated facilities provide adequate headroom for
the Group to execute its strategic plan. At 31 January 2025, net debt
(excluding lease liabilities) was £58.9 million and the Group had £48.8
million of undrawn facilities.
The UK Corporate Governance Code requires that an assessment is made of the
Group's ability to continue as a going concern for a period of at least 12
months from the signing of these financial statements; however it is not
specified how far beyond 12 months should be considered. For the purpose of
assessing the going concern assumption, the Group has prepared cash flow
forecasts for the 12 month period following the date of approval of these
accounts, which incorporate our debt facilities and related covenant measures.
These forecasts are extracted from the Group's approved budget and strategic
plan which covers a period of five years. Within the 12-month period, the
Group has considered qualitative scenarios and the Group's ability to operate
within its existing banking facilities and meet covenant requirements. Beyond
the 12-month period, the Group has qualitatively considered whether any
factors (for example the timing of debt repayments, or longer-term trading
assumptions) indicate a longer period warrants consideration.
The results of this analysis were:
• The Group's base case forecasts indicate that the Group will
continue to trade profitably, generate positive operating cash flows and
retain considerable liquidity headroom against facility limits whilst meeting
all covenant requirements on the relevant test dates in the 12-month period.
• In the Board's view, there are no other factors arising in
the period immediately following 12 months from the date of signing these
accounts that warrant further consideration.
• Scenario analysis, which considered a reduction in sales,
profitability and cash flows on a permanent basis of c.10% indicated that the
Group would maintain liquidity headroom and covenant compliance throughout the
12 month period. The analysis did not consider any potential upside from
mitigating actions, including the £75 million accordion facility, a reduction
in discretionary costs as well as timing of cash outflows, which could all
significantly increase the headroom further.
The Group conducted a reverse stress test analysis which considered the extent
of sales loss or cost increase that would be required to result in either a
complete loss of liquidity headroom or a breach of covenants associated with
the Group's financing. Seasonality of the Group's cash flows, with higher
purchases and cash outflows over the summer to build inventory for Christmas,
means liquidity headroom is at its lowest in September and October ahead of
the Christmas season. Conversely, covenant compliance is most sensitive around
the year-end.
The reverse stress test analysis demonstrated that the level of sales loss or
cost increase required to result in either a covenant breach or exhausting
liquidity would require an significant reduction in sales that was sustained
over a number of months, this scenario also did not factor in any possible
mitigating actions that management could take. Accordingly, such scenarios are
not considered to be reasonably likely to occur.
It should be noted that as a result of the higher net debt position at the
year-end due to the recommencement of dividends and acquisitions in FY25, we
expect overall headroom in our facilities to be lower than in the prior year
but management consider that there are sufficient mitigations available to
offset any reasonably possible downturn in trade.
Over recent years, the business has demonstrated a significant degree of
resilience and a proven ability to manage cash flows and liquidity during a
period of unprecedented economic downturn. Accordingly, the Board retains
confidence that, were such a level of downturn to reoccur in the assessment
period, the Group would be able to take action to mitigate its effects.
Based on these factors, the Board has a reasonable expectation that the Group
has adequate resources and sufficient loan facility headroom and accordingly
the accounts are prepared on a going concern basis.
Accounting judgements and estimates
The preparation of financial statements in conformity with UK IFRS requires
judgement to be applied in forming the Group's accounting policies. It also
requires the use of estimates and assumptions that affect the reported amount
of assets, liabilities, income and expenses. Actual results may subsequently
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively in the period in which the
estimate is revised.
Judgements are also reviewed on an ongoing basis to ensure they remain
appropriate. The Group does not consider there to be any judgements made in
the current period that have had a significant material effect on the amounts
recognised in the financial statements.
Key sources of estimation uncertainty
The key sources of estimation uncertainty, being those estimates and
assumptions that carry the most significant risk of a material adjustment to
the carrying amounts of assets and liabilities in the next financial year, are
set out below.
Inventory provisioning
The Group holds significant volumes, and a broad range of inventory. The Group
calculates an inventory provision to cover the risk that the net realisable
value of inventory is lower than its cost. This provision is calculated in
accordance with an established, documented policy, that is based on historical
experience and the Group's inventory management strategy, which determines the
range of product that will be available for sale in-store and online.
Provisions are made against inventory that is no longer on the Group's
merchandising plan, is expected to be removed from that plan in the near
future, or where certain ranges do not perform as anticipated. The amounts
provided are calculated by product line and are adjusted annually to reflect
experience.
In FY25, the Group applied a consistent policy with prior year and, in
accordance with that policy, updated the judgement over categorisation of, and
provision rates applied to, inventory informed by the latest available
sell-through data. These changes are not considered to have had a significant
impact on the overall value of the provision, although have contributed to the
reduction in the value of the provision compared to the prior year due to
improving sell-through rates across all categories of inventory.
At the end of FY25, the total inventory provision was £8.2 million (FY24:
£9.5 million). The reduction in the value of the provision year-on-year
generally reflects an improvement in our inventory sell through rate observed
in FY25. As a result, the overall proportion of gross inventory provided for
reduced compared to the prior year.
The full range of reasonably possible outcomes in respect of the provision is
difficult to calculate at the balance sheet date as it is dependent on the
accuracy of forecasts for sales volumes and future decisions we may take on
aged, discontinued and potentially excess inventory in response to market and
supply developments. The Group believes it has taken a balanced approach in
determining the provision. It has considered the nature of the estimates
involved and has concluded that it is possible, on the basis of existing
knowledge, that outcomes within the next financial year may be different from
the Group's assumptions applied as at 31 January 2025 and could require a
material adjustment to the carrying amount of the provision in the next
financial year.
The provision applied is based on the application of sell-through rates in the
previous financial year, if those rates were changed +/-5% this would cause a
+/-£1.2m movement in the overall value of the provision.
Other sources of estimation uncertainty
Impairment testing
An impairment review is conducted annually in respect of goodwill, and as
required for other assets and cash-generating units ('CGUs') where an
indicator of potential impairment exists. The carrying amounts of the assets
involved and the level of estimation uncertainty inherent in determining
appropriate assumptions for the calculation of the assets' recoverable amounts
means impairment reviews are an area of significant management focus. However,
whether that estimation uncertainty is significant to the financial statements
is not known until the analysis is concluded. The Group generally considers
the estimation uncertainty in impairment reviews to be significant if a
reasonably possible change in the key assumptions would lead to a material
change in the accounting outcome.
Goodwill
In FY25, the Group conducted an impairment review in respect of goodwill and
noted no reasonably possible change in assumptions that would lead to an
impairment charge being recognised against goodwill in either the Stores CGU
or the Garven CGU. The assumptions considered are described in more detail in
notes 10 and 29. The carrying amount of goodwill in the consolidated balance
sheet totals £322.5 million of which £8.7 million relates to the acquisition
of Garven Holdings, LLC in FY25 and is allocated entirely to the Garven CGU,
as well as £313.8 million which is allocated in its entirety to the group of
CGUs, shared assets and functions that comprise the Group's Stores business.
Right of use assets and tangible assets
In addition, the Group conducted a store-level impairment review specifically
covering right-of-use assets and property, plant and equipment insofar as they
are directly allocable to stores. As below, the Group estimates the value in
use of ROU and tangible assets at a store level based on future cash flows
derived from forecasts included within the Group's approved budget. The Group
assesses indicators of impairment for the store portfolio on the basis of
whether a material impairment charge (or reversal) could arise in respect of
the store portfolio as a whole in the period. Due to the challenging
macro-economic environment, existence of a material carried forward impairment
charge, and an ongoing expectation that around 1% of the store portfolio can
be loss-making at any time, the Group concluded this condition was met for
FY25.
Intangible assets
Due to the financial performance in the year, the Group also conducted an
impairment test of the cardfactory Online CGU. No impairment test was carried
out for the Getting Personal CGU as all assets held were previously written
down.
Approach and results
The Group assessed the recoverable amount of these CGUs on a value in use
basis, using consistent assumptions across all reviews where applicable, with
estimates of future cash flows derived from forecasts included within the
Group's approved budget adjusted to exclude cash flows from new stores and
initiatives so as to assess the assets in their current state and condition.
Where impairment reviews are prepared in respect of assets not yet ready for
use, future development costs and revenues are not excluded so as to fairly
reflect the value of the assets being developed and costs to complete. The
assessment of future cash flows that underpin such impairment reviews
inherently require the use of estimates, notably in respect of future
revenues, operating costs including material, freight, wage and energy
inflation, terminal growth rates, foreign currency exchange rates, and
discount rates.
The results of the impairment tests are set out in note 12 (intangible assets)
and note 14 (leases) which includes the key assumptions considered. The
impairment test in respect of the Stores business and cardfactory Online had
significant headroom and accordingly, having undertaken scenario analysis on
the key assumptions, the Group does not believe there are any reasonably
possible changes in those key assumptions that would lead to a material
impairment. The impairment tests show that reasonably possible changes in the
assumptions relating to the Online assets could lead to an immaterial
impairment charge in the future if Online sales do not grow in line with our
expectations in future years.
The Group recorded a net impairment reversal of £0.4 million in respect of
stores, which is comprised of £2.2 million of impairment reversals and £1.8
million of impairment charges. The reversals reflect those stores where an
impairment charge made in a prior period has been reversed due to improved
trading and outlook. The net impairment charge in the current year included a
net reversal to impairment on Right of use assets of £0.4m and a net charge
to PPE of £nil.
Having considered scenarios consistent with those reviewed in respect of
goodwill impairment testing, the Group is satisfied that reasonable changes in
the key assumptions would not materially change the impairment charge for
stores.
Identification and valuation of intangible assets arising on the acquisition
of Garven Holdings
Under IFRS 3, Business Combinations, the identification of intangible assets
acquired in a business combination requires a degree of judgement. This
judgement involves determining whether identifiable intangible assets exist
apart from goodwill and recognising them separately. An intangible asset is
identifiable if it meets either the separability criterion or the
contractual-legal criterion. Management consider that the intangible assets
identified as part of the acquisition of Garven Holdings meet the separability
criterion and although there is judgement involved in reaching this
conclusion, we do not consider that a significant degree of judgement was
required in making this determination. As part of this judgement, we
considered other possible intangible assets that could be recognised but
concluded that either they did not meet the above criteria or had a trivial
fair value.
As a result of the acquisition of Garven Holdings, LLC on 3 December 2024, the
Group have recognised both goodwill and intangible assets associated with
existing customer relationships and branding of the acquired business.
Management have performed a valuation of the intangible assets using the
Muti-Period Excess Earnings Method (MPEEM) to determine the fair value of the
customer relationships which carry the material value in terms of the
intangibles recognised.
The MPEEM valuation method relied on several key assumptions in reaching a
valuation for the customer relationships and this method uses forecast
cashflows of the acquired business in order to generate the present value of
future cashflows which represents the fair value of the assets acquired. The
key assumptions underpinning the valuation include the growth rate of sales,
the discount rate applied and the retention rate of existing customer
relationships.
We have performed sensitivity analysis over the key assumptions to consider
the impact on the valuations of reasonably possible outcomes. We have
sensitised the key assumptions in discrete scenarios by changing the discount
rate by 2.5%, the growth rate by 2% and the retention allowance for the
existing customer relationships by 2.5%, each of the associated scenarios does
not cause a material movement in the valuation of intangibles. It should be
noted that any adjustments to the valuations assessed would be a
reclassification between goodwill and intangible assets with no impact on the
profit of the Group.
Climate change
The Group has reviewed the potential impact of climate change and ESG-related
risks and uncertainties on the consolidated financial statements. Given the
nature of the Group's business and operations, the exposure to both physical
and transitional risks associated with climate change is considered to be low.
In particular, the Group has considered climate change in respect of
impairment testing (potential impact of climate and ESG risks on estimates of
future cash flows, notes 12 and 13), going concern (above), and inventory
provisions (impact of customer preferences and ESG considerations on potential
stock obsolescence, above) and concluded in each case that there is no
material impact in each area at 31 January 2025.
3 Principal accounting policies
The preliminary announcement has been prepared using accounting policies that
are consistent with those published in the Group's accounts for the year-ended
31 January 2024 (available on the Company's website).
Amended standards and interpretations effective in the period do not have a
material effect on the Group's financial statements.
The Group adopted a new accounting policy in respect of acquired intangible
assets, following the recognition of such assets for the first time in FY25.
Acquired intangible assets
Intangible assets that are acquired by the Group as a result of business
combinations are recorded at fair value at the acquisition date and stated on
an ongoing basis as fair value less accumulated amortisation and less any
accumulated impairment losses.
Amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of intangible assets, other than goodwill, from the
date that they are available for use, since this most closely reflects the
expected pattern of consumption of the future economic benefits embodied in
the asset. The estimated useful lives for the current and comparative periods
are as follows:
• Customer relationships and brands - 10 years.
4 Segmental reporting and revenue
Following investment in the Group's people, systems and infrastructure to
support its strategy, the Group is organised into four main business areas
which meet the definition of an Operating segment under IFRS, those being
cardfactory Stores, cardfactory Online, Partnerships and Printcraft. Each of
these business areas has a dedicated management team and reports discrete
financial information to the Board for the purpose of decision making.
• cardfactory Stores retails greeting cards, celebration
accessories, and gifts through an extensive network of stores in the UK &
Republic of Ireland.
• cardfactory Online retails greeting cards, celebration
accessories, and gifts via its online platforms.
• Partnerships represents the Group's "B2B" operations
and sells greeting cards, celebration accessories and gifts across various
brands via a network of third party retail partners both in the UK and
overseas.
• Printcraft is a manufacturer of greeting cards and
personalised gifts and sells the majority of its output intra-group to the
Stores and online businesses.
We consider that both Getting Personal and cardfactory Online, which have
previously been disclosed as separate operating segments, fall under a single
operating segment of cardfactory Online. This is due to the fact that there
are common management teams, the Board consider aggregated financial
information relating to Online performance and strategic decisions are
considered based on a single Online channel. This has no impact on the
financial statements with the exception of aggregating the revenue and EBITDA
performance within this note. At the end of the period, from 30 January 2025,
the Group took the decision to close the gettingpersonal.co.uk store. Going
forward, the Group will trade from a single online platform,
cardfactory.co.uk.
The Group acquired SA Greetings on 25 April 2023, Garlanna Holdings Limited on
04 September 2024 and Garven Holdings, LLC on 04 December 2024. All three
business' principal activities relate to the sale of cards, gifts and/or
celebration essentials to business customers, and therefore the results of SA
Greetings, Garven and Garlanna are included in the Partnerships operating
segment for the purposes of segmental reporting.
The accounting policies applied in preparing financial information for each of
the Group's segments are consistent with those applied in the preparation of
the consolidated financial statements. The Group's support centre and
administrative functions are run by the cardfactory Stores segment, with
operating costs recharged to other segments where they are directly
attributable to the operations of that segment.
The Board reviews revenue and EBITDA by segment, with the exception of
Printcraft by virtue of its operations being predominantly intra-group in
nature. Note that under IFRS EBITDA is considered to be a non-GAAP measure as
considered in the appendix to these financial statements. Whilst only
cardfactory Stores meets the quantitative thresholds in IFRS to require
disclosure, the Group's other trading segments are reported below as the Group
considers that this information is useful to stakeholders in the context of
the Group's 'Opening Our New Future' strategy.
Revenue and EBITDA for each segment, and a reconciliation to the consolidated
operating profit per the financial statements, is provided in the table below:
2025 2024
£'m £'m
Revenue:
cardfactory Stores 506.8 478.9
cardfactory Online 13.2 14.7
Partnerships 22.2 17.0
Other 0.3 0.3
Consolidated Group revenue 542.5 510.9
Of which derived from customers in the UK 509.8 484.8
Of which derived from customers overseas 32.7 26.1
EBITDA(1):
cardfactory Stores 131.8 127.4
cardfactory Online (6.3) (5.7)
Partnerships 1.0 1.2
Other 1.0 (0.3)
Consolidated Group EBITDA(1) 127.5 122.6
Consolidated Group depreciation, amortisation & impairment (48.1) (47.4)
Consolidated Group (loss)/gain on disposal (0.1) 1.2
Consolidated Group Operating Profit 79.3 76.4
(1)This is an Alternative Performance Measure not defined under IFRS
The "Other" category principally reflects central overheads, Printcraft sales
to third parties and consolidation adjustments not impacting another operating
segment.
Group revenue is predominantly derived from retail customers. Average
transaction value is low and products are transferred at the point of sale.
Group revenue is presented as a single category as, by segment, revenues are
subject to substantially the same economic factors that impact the nature,
amount, timing and uncertainty of revenue and cash flows. The types of
products sold via each operating segment are fundamentally similar in nature
and it is the channel or location of sale that differs. As such, we consider
that the segmental analysis above provides a reasonable breakdown of sales by
product type.
The table below sets out a geographical analysis of revenues for the current
and prior year:
2025 2024
£'m £'m
Revenue derived from customers in the UK 509.8 484.8
Revenue derived from customers overseas:
- South Africa 11.6 10.2
- Republic of Ireland 15.4 11.1
- United States of America 3.1 -
- Rest of the World 2.6 4.8
Consolidated revenue 542.5 510.9
Revenues from customers are allocated to geographical locations based on the
location of the customer to whom the sale is made. Rest of World includes
revenue derived from all other geographical locations (including Australia and
the Middle East), none of the components of this category are individually
material.
Of the Group's non-current assets, £9.6 million (2024: £10.0 million)
relates to assets based outside of the UK, principally in relation to the
Group's stores in the Republic of Ireland and wholesale operations within the
Republic of Ireland, United States and South Africa. Non-current assets
related to stores based in the Republic of Ireland are £6.4 million as at 31
January 2025 (FY24: £4.8 million). Non-current assets related to wholesale
operations are £0.2 million in the Republic of Ireland, £0.1 million in the
United States and are £2.9 million (FY24: £5.2) in South Africa.
5 Operating profit
Operating profit is stated after charging/(crediting) the following items:
2025 2024
£'m £'m
Staff costs (note 7) 174.5 162.4
Depreciation expense
- owned fixed assets (note 13) 8.7 7.6
- right of use assets (note 14) 36.3 35.9
Amortisation expense (note 12) 3.5 2.8
Reversal of impairment of right-of-use assets (note 14) (0.4) (0.2)
Impairment of tangible assets (note 13) - 0.2
Impairment of intangible assets (note 12) - 1.1
Loss/(profit) on disposal of fixed assets (notes 13 and 14) 0.1 (1.2)
Foreign exchange (gain)/loss (2.3) 0.6
The total fees payable by the Group to Mazars LLP and their associates during
the period was as follows:
2025 2024
£'000 £'000
Audit of the consolidated and Company financial statements 77 55
Amounts receivable by the Company's auditor and its associates in respect of:
Audit of financial statements of subsidiaries of the Company 624 498
Audit-related assurance services 92 85
Total fees 793 638
6 EBITDA
EBITDA represents profit for the period before net finance expense, taxation,
gains or losses on disposal, depreciation, amortisation and impairment
charges.
2025 2024
£'m £'m
Operating profit 79.3 76.4
Depreciation, amortisation and impairment 48.1 47.4
Loss/(gain) on disposal 0.1 (1.2)
EBITDA(1) 127.5 122.6
(1)This is an Alternative Performance Measure not defined under IFRS
7 Employee numbers and costs
The average number of people employed by the Group (including Directors)
during the year, analysed by category, was as follows:
2025 2024
Number Number
Management and administration 773 534
Operations 9,748 9,797
10,521 10,331
The aggregate payroll costs of all employees including Directors were as
follows:
2025 2024
£'m £'m
Employee wages and salaries 154.3 143.1
Equity-settled share-based payment expense 2.3 2.0
Social security costs 11.1 9.3
Defined contribution pension costs 2.3 2.1
Total employee costs 170.0 156.5
Agency labour costs 4.5 5.9
Total staff costs 174.5 162.4
Key management personnel
The key management personnel of the Group comprise the Card Factory plc Board
of Directors and the Executive Board. Key management personnel compensation is
as follows:
2025 2024
£'m £'m
Salaries and short-term benefits 7.9 7.4
Equity-settled share-based payment expense 2.0 1.6
Social security costs 1.1 1.0
Defined contribution pension costs 0.1 0.2
11.1 10.2
Remuneration of Directors
2025 2024
£'m £'m
Directors' remuneration 1.3 1.6
Amounts receivable under long-term incentive schemes 0.8 0.5
Company contributions to defined contribution pension plans - -
2.1 2.1
The table above includes the remuneration of Directors in each year. Amounts
receivable under long-term incentive schemes reflects the value of options
exercised during the year.
Further details of the remuneration of the current directors are disclosed in
the Directors' Remuneration Report in the final Annual Report. The basis of
calculation for certain items described in the Directors' Remuneration Report
may differ to that used in this note, reflecting differences in the relevant
regulations.
8 Finance expense
2025 2024
£'m £'m
Finance expense
Interest received (0.2) -
Interest on bank loans and overdrafts 6.4 6.5
Amortisation of loan issue costs(1) 1.0 0.6
Lease interest 8.0 6.3
15.2 13.4
( )
(1 ) Amortisation of loan issue costs includes £0.5m of costs related to the
accelerated release of costs held on the balance sheet related to the previous
financing facilities due to the completion of refinancing in the April 2024.
These costs are excluded from Adjusted earnings.
9 Taxation
The tax charge includes both current and deferred tax. The tax charge reflects
the estimated effective tax on the profit before tax for the Group for the
year ended 31 January 2025 and the movement in the deferred tax balance in the
year, so far as it relates to items recognised in the income statement.
Taxable profit or loss differs from profit or loss before tax as reported in
the income statement, because it excludes items of income or expenditure that
are either taxable or deductible in other years or never taxable or
deductible.
Recognised in the income statement:
2025 2024
£'m £'m
Current tax charge
Current year 16.5 13.8
Adjustments in respect of prior periods (1.5) 0.2
Total current tax charge 15.0 14.0
Deferred tax charge/(credit)
Origination and reversal of temporary differences (0.2) 2.1
Adjustments in respect of prior periods 1.5 -
Total deferred tax charge 1.3 2.1
Total income tax charge 16.3 16.1
The effective tax rate of 25.4% (2024: 24.5%) on the profit before taxation
for the year is slightly higher than (2024: higher than) the average rate of
mainstream corporation tax in the UK for the year of 25% (2024: 24%).
The tax charge is reconciled to the standard rate of UK corporation tax as
follows:
2025 2024
£'m £'m
Profit before tax 64.1 65.6
Tax at the standard UK corporation tax rate of 25% (2024: 24%(1)) 16.0 15.8
Tax effects of:
Expenses not deductible for tax purposes 0.5 0.6
Income not taxable for tax purposes - (0.6)
Adjustments in respect of prior periods - 0.3
Effect of overseas tax rates (0.2) -
Total income tax charge 16.3 16.1
Total taxation recognised through the income statement, other comprehensive
income and through equity are as follows:
2025 2024
Current Deferred Total Current Deferred Total
£'m £'m £'m £'m £'m £'m
Income statement 15.0 1.3 16.1 14.0 2.1 16.1
Other comprehensive income - 0.4 0.4 - (0.7) (0.7)
Equity - 0.1 0.1 - (0.4) (0.4)
Total tax 15.0 1.8 16.8 14.0 1.0 15.0
1 In October 2022, the Government announced changes to the Corporation
Tax rate increasing the main rate of Corporation Tax to 25% (previously 19%).
This became effective as at 1 April 2023 giving an average Corporation Tax
rate of 24.03% for the year to 31 January 2024.
10 Dividends
In June 2024, the Group paid a dividend of 4.5 pence per share (totalling
£15.6 million) in respect of the FY24 financial year. This dividend
represented the total dividend for FY24 (including an amount in lieu of an
interim dividend) with interim dividends unable to be paid during FY24 due to
restrictions in the Group's previous financing facilities that remained in
place until 31 January 2024.
FY25 final dividend
At the forthcoming Annual General Meeting, the Board will recommend to
shareholders that a resolution is passed to approve payment for a final
dividend for the year ended 31 January 2025 of 3.6 pence per share, equivalent
to approximately £12.5 million. The final dividend will be payable to
shareholders on the share register on 30 May 2025, with payments to be made on
27 June 2025.
Dividends paid in the year: Pence per share 2025 2024
£'m £'m
Total dividend for the year ended 31 January 2024 4.5p 15.6 -
Interim dividend for the year ended 31 January 2025 1.2p 4.2 -
Total dividends paid to shareholders in the year 19.8 -
Dividend equivalents totalling £0.5 million (2024: £nil) were accrued in the
year in relation to share-based long-term incentive schemes.
11 Earnings per share
Basic earnings per share is calculated by dividing the profit for the period
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period.
Diluted earnings per share is based on the weighted average number of shares
in issue for the period, adjusted for the dilutive effect of potential
ordinary shares. Potential ordinary shares represent employee share incentive
awards and save as you earn share options.
2025 2024
(Number) (Number)
Weighted average number of shares in issue 346,910,019 343,339,468
Weighted average number of dilutive share options 2,295,420 3,940,467
Weighted average number of shares for diluted earnings per share 349,205,439 347,279,935
2025 2024
£'m £'m
Profit for the financial period 47.8 49.5
Pence pence
Basic earnings per share(1) 13.8 14.4
Diluted earnings per share 13.7 14.3
( )
(1 ) For calculation of adjusted earnings per share, based on adjusted PBT
which removes the impact of non-underlying transactions, please see the
appendix below.
12 Intangible assets
Goodwill Customer relationships and brands Software Total
£'m £'m £'m £'m
Cost
At 1 February 2024 328.2 - 35.0 363.2
Additions - - 7.0 7.0
Acquisitions (note 22) 8.7 12.9 - 21.6
At 31 January 2025 336.9 12.9 42.0 391.8
Amortisation/impairment
At 1 February 2024 14.4 - 17.4 31.8
Amortisation in the period - 0.3 3.2 3.5
Impairment in the period - - - -
At 31 January 2025 14.4 0.3 20.6 35.3
Net book value
At 31 January 2025 322.5 12.6 21.4 356.5
At 31 January 2024 313.8 - 17.6 331.4
Customer relationships and brands are intangible assets with a finite life,
the average remaining useful life of this class of assets is 9 years and 9
months. The average remaining useful life of Software is 4 years and 8 months.
As at 31 January 2025, the Group held £3.5 million of assets under
construction within Software (FY24: £1.9 million).
During the prior year, the Group recognised an impairment charge of £1.1
million in respect of the online platform for Getting Personal. The charge to
the Getting Personal assets reflected the more focused investment being
targeted at the CF Online platform. There is no further impairment charge
recognised in FY25 in relation to the Getting Personal platform.
Goodwill Customer relationships and brands Software Total
£'m £'m £'m £'m
Cost
At 1 February 2023 328.2 - 26.0 354.2
Additions - - 9.0 9.0
At 31 January 2024 328.2 - 35.0 363.2
Amortisation/impairment
At 1 February 2023 14.4 - 13.5 27.9
Amortisation in the period - - 2.8 2.8
Impairment in the period - - 1.1 1.1
At 31 January 2024 14.4 - 17.4 31.8
Net book value
At 31 January 2024 313.8 - 17.6 331.4
At 31 January 2023 313.8 - 12.5 326.3
Goodwill arising on the acquisition of Getting Personal in 2011 of £14.4
million was allocated to the Getting Personal CGU, which corresponds to the
Online operating segment (see note 2). This goodwill in respect of Getting
Personal was fully written down in 2020.
All remaining historical goodwill is in respect of the cardfactory Stores
business, which is comprised of all of the cardfactory Stores (each an
individual CGU for asset impairment testing purposes), associated central
functions and shared assets. cardfactory Stores is the lowest level at which
the Group's management monitors goodwill internally.
The total carrying amount of the cardfactory Stores group of CGUs for
impairment testing purposes, inclusive of liabilities that are necessarily
considered in determining the recoverable amount, at 31 January 2025 was
£374.6 million (2024: £341.1 million).
As a result of the acquisition of Garven Holdings, LLC in FY25 (see note 29),
£8.7 million of goodwill has been recognised by the Group and allocated
wholly to the Garven CGU, which forms part of the Partnerships operating
segment. The total carrying amount of the Garven CGU for impairment purposes,
inclusive of liabilities that are necessarily considered in determining the
recoverable amount, at 31 January 2025 was £19.8m million (2024: £nil).
Management have performed a valuation of intangible assets relating to
existing customer relationships and branding using the Muti-Period Excess
Earnings Method (MPEEM) to determine the fair value of the customer
relationships which carry the material value in terms of the intangibles
recognised. The MPEEM valuation method relied on several key assumptions in
reaching a valuation for the customer relationships and this method uses
forecast cashflows of the acquired business in order to generate the present
value of future cashflows which represents the fair value of the assets
acquired. The key assumptions underpinning the valuation include the growth
rate of sales, the discount rate applied and the retention rate of existing
customer relationships.
We have performed sensitivity analysis over the key assumptions to consider
the impact on the valuations of reasonably possible outcomes. We have
sensitised the key assumptions in discrete scenarios by changing the discount
rate by 2.5%, the growth rate by 2% and the retention allowance for the
existing customer relationships by 2.5%, each of the associated scenarios does
not cause a material movement in the valuation of intangibles. It should be
noted that any adjustments to the valuations assessed would be a
reclassification between goodwill and Intangible assets with no impact on the
profit of the Group.
Stores CGU
The recoverable amount has been determined based on a value-in-use
calculation. This value-in-use calculation is based on the Group's most recent
approved five-year strategic plan, to exclude any value from planned new
stores or initiatives, so as to assess the valuation of the assets in their
current state and condition.
The key assumptions used in determining the recoverable amount are:
- Future trading performance including sales growth, product mix,
material and operating costs;
- Foreign exchange rates applicable to the Group's purchases of goods
for resale;
- The terminal growth rate applied; and
- The discount rate.
The values assigned to the variables that underpin the Group's expectations of
future trading performance were determined based on historical performance and
the Group's expectations with regard to future trends. Where applicable,
amounts take into account the Group's energy hedges and fixed contracts,
changes in market prices and rates, and relevant industry and consumer data to
inform expectations around future trends.
The Group assumes a long-term GBPUSD exchange rate in line with published
forward curves at the balance sheet date, adjusted to reflect the value of
forward contracts in place. The fair value of these contracts is included in
the carrying amount.
A 0% (2023: 0%) terminal growth rate is applied beyond the five-year term of
the plan, representing a sensitised view of the Group's estimate of the
long-term growth rate of the sector. Whilst such long-term rates are
inherently difficult to benchmark using independent data, the Group's reverse
stress-testing of the goodwill impairment model indicated a significant
negative terminal decline would be required in order to eliminate the headroom
completely.
The forecast cash flows are discounted at a pre-tax rate of 12.0% (2024:
13.0%). The discount rate is derived from a calculation using the capital
asset pricing model to calculate cost of equity utilising available market
data. The discount rate is compared to the published discount rates of
comparable businesses and relevant industry data prior to being adopted.
No impairment loss was identified. The valuation indicates sufficient headroom
such that any reasonably possible change to the key assumptions would not
result in an impairment of the related goodwill.
Garven CGU
The recoverable amount has been determined based on a value-in-use
calculation. This value-in-use calculation is based on a sensitized projection
of the forecast for the business to exclude any potential future growth as a
result of being a part of the Group.
The key assumptions used in determining the recoverable amount are:
- Future trading performance including sales and margin based on
pre-acquisition performance;
- The terminal growth rate applied; and
- The discount rate.
The values assigned to the variables have been based on current performance
and balanced assumptions of how this translates into performance over the next
5 years.
A 0% terminal growth rate is applied beyond the five-year term of the plan,
representing a prudent view of the Group's estimate of the long-term potential
growth at Garven. Whilst such long-term rates are inherently difficult to
benchmark using independent data, the Group's reverse stress-testing of the
goodwill impairment model indicated a significant negative terminal decline
would be required in order to eliminate the headroom completely.
Subsequent to the balance sheet date, the United Stated introduced new trade
tariffs which will impact on the supply chain activities of Garven and its
customers. The Group has completed an initial impact assessment and performed
sensitivity analysis which indicated that, based on the tariffs and planned
business activities in place at the date of approval of these financial
statements, did not change the conclusion of the analysis above.
The forecast cash flows are discounted at a pre-tax rate of 12.0% which is
based on the Group discount rate. The valuation indicates sufficient headroom
such that any reasonably possible change to the key assumptions would not
result in an impairment of the related goodwill. No impairment loss was
identified.
Impairment testing: Intangible assets
Due to the performance of the cardfactory Online CGU, an impairment test in
respect of this CGU was carried out at 31 January 2025.
The total carrying amount of the cardfactory Online CGU for impairment testing
purposes, inclusive of liabilities that are necessarily considered in
determining the recoverable amount, at 31 January 2025 was not material
individually.
The key assumptions are consistent with those set out above in respect of the
goodwill impairment review, with the exception of foreign exchange rates which
are not significant to the analysis for this CGU. To ensure the analysis
fairly reflected the expected value in use of the assets within this CGU, the
estimated future cash flows included all costs to complete the assets under
development and sales associated with those assets once deployed into use.
The cardfactory Online valuation indicated sufficient headroom such that any
reasonably possible change in assumptions would not result in a material
impairment charge.
13 Property, plant and equipment
Freehold Leasehold improvements Plant, equipment, fixtures & vehicles Total
property
£'m £'m £'m
£'m
Cost
At 1 February 2024 22.6 40.8 95.7 159.1
Additions 0.1 - 11.3 11.4
Acquisitions (note 22) - - 0.2 0.2
Disposals - - (0.7) (0.7)
At 31 January 2025 22.7 40.8 106.5 170.0
Depreciation
At 1 February 2024 5.3 40.0 67.9 113.2
Depreciation in the period 0.4 0.4 7.9 8.7
Depreciation on disposal - - (0.6) (0.6)
At 31 January 2025 5.7 40.4 75.2 121.3
Net book value
At 31 January 2025 17.0 0.4 31.3 48.7
At 31 January 2024 17.3 0.8 27.8 45.9
As at 31 January 2025, the Group held £nil assets under construction within
Plant, equipment, fixtures & vehicles (FY24: £2.2 million). These assets
do not depreciate until brought into use.
Freehold Leasehold improvements Plant, equipment, fixtures & vehicles Total
property
£'m £'m £'m
£'m
Cost
At 1 February 2023 18.6 40.8 78.2 137.6
Additions 1.3 - 17.5 18.8
Acquisitions 2.7 - - 2.7
At 31 January 2024 22.6 40.8 95.7 159.1
Depreciation
At 1 February 2023 4.9 39.0 61.5 105.4
Depreciation in the period 0.4 1.0 6.2 7.6
Impairment in the period - - 0.2 0.2
At 31 January 2024 5.3 40.0 67.9 113.2
Net book value
At 31 January 2024 17.3 0.8 27.8 45.9
At 31 January 2023 13.7 1.8 16.7 32.2
14 Leases
The Group has lease contracts, within the definition of IFRS 16 leases, in
relation to its entire Store lease portfolio, some warehousing locations and
motor vehicles. Other contracts, including distribution contracts and IT
equipment, are deemed not to be a lease within the definition of IFRS 16 or
are subject to the election not to apply the requirements of IFRS 16 to
short-term or low value leases.
Right of use assets 2025 2024
£m £m
Buildings 109.4 98.2
Motor vehicles 0.8 1.0
110.2 99.2
The right-of-use assets movement in the year is as follows:
2025 2024
£m £m
At the beginning of the year 99.2 100.5
Acquisitions 0.1 1.9
Additions:
Buildings 47.5 32.0
Motor vehicles 0.3 1.2
Disposals (1.0) (0.7)
Depreciation charge:
Buildings (35.7) (35.4)
Motor vehicles (0.6) (0.5)
Net impairment reversal 0.4 0.2
At the end of the year 110.2 99.2
Disposals and depreciation on disposals include fully depreciated right of use
assets in respect of expired leases where the asset remained in use whilst a
lease renewal was negotiated. The net impairment reversal and disposals above
relate entirely to Buildings.
Impairment Testing: Store assets
Reflecting continued macro-economic uncertainty, cost inflation and the
existence of a small number of loss-making stores within the portfolio, the
Group considers that an indicator of potential impairment exists in respect of
the store portfolio and, accordingly, an impairment review of the Group's
store assets was undertaken in the 2025 financial year.
For this purpose, each of the Group's stores is considered to be a CGU, with
each store's carrying amount determined by assessing the value of right-of-use
assets and property, plant and equipment insofar as they are directly
allocable to an individual store. The assessment of whether an indicator of
impairment may exist in respect of store assets is considered across the store
portfolio and not on a store-by-store basis. Accordingly, the store impairment
review considers all stores in the portfolio.
The recoverable amount of each store was determined based on the expected
future cash flows applicable to each store, assessed using a basis consistent
with the future cash flows used in the goodwill impairment test described in
note 10, but limited to the term of the current lease as assessed under IFRS
16. As a result, the key assumptions are also considered to be consistent with
those described in note 10, in addition to the allocation of central and
shared costs to individual stores insofar as such an allocation can be made on
a reasonable and consistent basis. Such costs are allocated on the basis of
the relative contribution of each individual store.
Application of these assumptions resulted in a net impairment reversal of
£0.4m (2024: £nil), comprised of impairment charges of £1.8 million (2024:
£2.7 million) and the reversal of previous impairment charges of £2.2
million (2024: £2.7 million). The net impairment charge in the current year
included a net reversal to impairment on Right of use assets of £0.4m and a
net impairment charge to PPE of £nil.
Having conducted scenario analysis, the Group does not consider any reasonably
possible change in the key assumptions would result in a material change to
the net impairment position.
Lease liabilities 2025 2024
£m £m
Current lease liabilities (21.7) (25.3)
Non-current lease liabilities (88.7) (75.5)
Total lease liabilities (110.4) (100.8)
Lease expense 2025 2024
£m £m
Depreciation expense on right of use assets 36.3 35.9
(Reversal of impairment) / impairment of right of use assets (0.4) (0.2)
Profit on disposal of right of use assets - (1.2)
Lease interest 8.0 6.3
Expense relating to short-term and low value leases1 - -
Expense relating to variable lease payments2 0.2 0.6
Total lease related income statement expense 44.1 41.4
1 Contracts subject to the election not to apply the requirements of IFRS
16 to short-term or low value leases.
2 A small proportion of the store lease portfolio are subject to an
element of turnover linked variable rents that are excluded from the
definition of a lease under IFRS 16.
Disposals and depreciation/impairment on disposals includes fully depreciated
right-of-use assets where the lease term has expired, including amounts in
respect of leases that have expired but the asset remained in use whilst a new
lease was negotiated. Profits on disposal arise where leases that have been
exited before the end of the lease term where the asset has been previously
impaired. The Group's full accounting policy in respect of leases and
right-of-use assets is set out in note 1.
15 Inventories
2025 2024
£'m £'m
Finished goods 60.5 49.5
Work in progress 0.6 0.5
61.1 50.0
Inventories are stated net of provisions totalling £8.2 million (2024: £9.6
million). The cost of inventories recognised as an expense and charged to cost
of sales in the year, net of movements in provisions, was £162.8 million
(2024: £155.8 million). Inventory has increased in 2025, in part this is due
to mix of inventory with a higher proportion of non-card stock increasing the
cost per unit of inventory.
16 Cash and cash equivalents
2025 2024
£'m £'m
Cash at bank and in hand 16.5 11.3
Cash presented as current assets in the balance sheet 16.5 11.3
Bank overdraft - (0.2)
Overdraft presented as current liabilities in the balance sheet - (0.2)
Net cash and cash equivalents 16.5 11.1
The Group manages its liquidity requirements on a Group-wide basis and
regularly sweeps and pools cash in order to optimise returns and / or ensure
the most efficient deployment of borrowing facilities in order to minimise
fees whilst maintaining sufficient short-term liquidity to meet its
liabilities as they fall due.
Cash in bank accounts and overdrafts are presented net where the Group has a
legal right to offset amounts, such as those with the same banking provider or
included in netting arrangements under its financing facilities.
The Group's cash and cash equivalents are denominated in the following
currencies:
2025 2024
£'m £'m
Sterling 8.5 6.8
Euro 2.5 3.3
US Dollar 5.0 1.2
South African Rand 0.5 (0.2)
16.5 11.1
17 Borrowings
2025 2024
£'m £'m
Current liabilities
Bank loans and accrued interest 0.1 6.9
Bank overdraft - 0.2
Total current liabilities 0.1 7.1
Non-current liabilities
Bank loans 73.9 37.9
Bank loans
Bank borrowings as at 31 January 2025 are summarised as follows:
Liability Interest rate Interest margin
ratchet range
£'m %
%
31 January 2025
Secured revolving credit facility 75.0 Margin + SONIA 1.90 - 2.80 Total facility size = £125 million
SA Greetings property mortgage 0.4
Debt issue costs (1.4)
74.0
31 January 2024
Secured term loans - Tranche 'B' 18.8 5.50 +SONIA -
Secured revolving credit facility 26.0 Margin + SONIA 2.75 - 4.50 Total facility size = £100 million
Accrued interest 0.1
SA Greetings property mortgage 0.6
Bank overdraft 0.2
Debt issue costs (0.7)
45.0
On 26 April 2024, the Group entered into an updated £125 million revolving
credit facility. The new facilities have an initial maturity date in April
2028, with options to extend by up to 19 months, subject to lender approval.
The facilities include a £75 million accordion, which can be drawn subject to
lender approval. The interest margin on the facilities is dependent upon the
Group's leverage position, with margins between 1.9-2.8% which is lower than
the previous facilities. At 31 January 2025, net debt (excluding lease
liabilities) was £58.9 million, the Group had £48.8 million of undrawn RCF
facility and £1.2 million of reserved ancillary facilities.
The new facilities include covenants for a maximum leverage ratio (calculated
as net debt excluding leases divided by EBITDA less rent costs for the prior
12 months) of 2.5x and a fixed charge cover ratio of at least 1.75x. The Group
expects to operate comfortably within these covenant levels for the
foreseeable future.
As part of the transaction to acquire SA Greetings in FY24, the Group acquired
a property mortgage and overdraft facility, which are denominated in South
African Rand. At 31 January 2025 the overdraft was undrawn and the carrying
amount of the mortgage facilities was £0.4 million (2024: £0.2 million and
£0.6 million respectively).
Debt issue costs in respect of the April 2024 refinancing totalled £1.6
million and are being amortised to the income statement over the duration of
the revised facilities.
18 Notes to the cash flow statement
Reconciliation of operating profit to cash generated from operations:
2025 2024
£'m £'m
Profit Before Tax 64.1 65.6
Gain on bargain purchase - (2.6)
Net finance expense 15.2 13.4
Operating profit 79.3 76.4
Adjusted for:
Depreciation and amortisation 48.5 46.3
Reversal of impairment of right-of-use assets (0.4) (0.2)
Impairment of tangible assets - 0.2
Impairment of intangible assets - 1.1
Gain on disposal of fixed assets - (1.2)
Cash flow hedging foreign currency movements (1.9) (0.4)
Unrealised foreign exchange (gains) / losses (0.1) 0.5
Share-based payments charge 2.3 2.1
Operating cash flows before changes in working capital 127.7 124.8
(Increase)/decrease in receivables (3.3) 3.6
(Increase)/decrease in inventories (11.2) (1.2)
(Decrease) in payables (4.1) (6.5)
Movement in provisions (3.5) (2.0)
Cash inflow from operating activities 105.6 118.7
19 Analysis of net debt
At 1 February Cash flow Non-cash At 31 January
2024
changes
2025
£'m
£'m £'m £'m
Secured bank loans and accrued interest (note 17) (44.8) (23.6) (5.6) (74.0)
Lease liabilities (100.8) 45.6 (55.2) (110.4)
Total debt (145.6) 22.0 (60.8) (184.4)
Add: debt costs capitalised (0.7) (1.6) 0.9 (1.4)
Add: bank overdraft (0.2) 0.2 - -
Less: cash and cash equivalents (note 16) 11.3 5.2 - 16.5
Net debt (135.2) 25.8 (59.9) (169.3)
Lease liabilities 100.8 (45.6) 55.2 110.4
Net debt excluding lease liabilities (34.4) (19.8) (4.7) (58.9)
At 1 February Cash flow Non-cash At 31 January
2023
changes
2024
£'m
£'m £'m £'m
Secured bank loans and accrued interest (note 17) (65.7) 30.1 (9.2) (44.8)
Lease liabilities (105.4) 43.7 (39.1) (100.8)
Total debt (171.1) 73.8 (48.3) (145.6)
Add: debt costs capitalised (1.4) - 0.7 (0.7)
Add: bank overdraft -(1.8) 1.8 (0.2) (0.2)
Less: cash and cash equivalents (note 16) 11.7 (0.4) - 11.3
Net debt (162.6) 75.2 (47.8) (135.2)
Lease liabilities 105.4 (43.7) 39.1 100.8
Net debt excluding lease liabilities (57.2) 31.5 (8.7) (34.4)
Non-cash changes in respect of lease liabilities reflect changes in the
carrying amount of leases arising from additions, disposals and modifications.
20 Provisions
Covid-19-related support Property provisions Restructuring provision Total
£'m £'m £'m
At 31 January 2023 7.4 2.1 - 9.5
Provisions utilised during the year - (0.2) - (0.2)
Provisions released during the year (2.0) 0.2 - (1.8)
Amounts provided during the year - - - -
At 31 January 2024 5.4 2.1 - 7.5
Acquisitions - 0.6 - 0.6
Provisions utilised during the year (3.3) (0.3) - (3.6)
Provisions released during the year - (0.8) - (0.8)
Amounts provided during the year - 0.5 1.2 1.7
At 31 January 2025 2.1 2.1 1.2 5.4
Covid-19 related support provisions reflect amounts received under one-off
schemes designed to provide support to businesses affected by Covid-19
restrictions, including lockdown grants and CJRS, in excess of the value the
Group reasonably believes it is entitled to retain under the terms and
conditions of those schemes. The provisions have been estimated based on the
Group's interpretation of the terms and conditions of the respective schemes
and, where applicable, independent professional advice.
A partial settlement of these amounts was paid in April 2024 amounting to
£3.3 million. The Group continues to hold discussions regarding settlement of
the remaining element of the provision. The Group has not obtained any
information that changes its assessment of the valuation of the remaining
provision at 31 January 2025. The Group believes a range of reasonably
possible outcomes remains and that the Group's provision reflects a reasonable
assessment of the amount that may be repayable. The Group does not believe
that any position within the range of reasonably possible outcomes would
reflect a material change to the provision held at the balance sheet date and
this provision is classified as current as the Group is actively aiming to
resolve this settlement in the next 12 months.
We have incurred one-off costs relating to a restructuring programme
associated with the closure of the Getting Personal website and streamlining
central support operations and as a result have recognised a provision for
£1.2 million. The total one-off costs related to the restructuring are £1.9
million with £0.7 million recognised as a provision within inventories.
The Group maintains provisions in respect of its store portfolio to cover both
the estimated cost of restoring properties to their original condition upon
exit of the property and any non-lease components of lease contracts (such as
service charges) that may be onerous. Despite the size of the Group's store
portfolio, such provisions are generally small which is consistent with the
Group's experience of actual dilapidations and restoration costs. Specific
provisions are usually made where the Group has a reasonable expectation that
the related property may be exited, or is at a higher risk of exiting, in the
near future and are generally expected to be utilised in the short-term. Any
non-current portion of the provision is considered immaterial.
21 Related party transactions
The Group has taken advantage of the exemptions contained within IAS 24
'Related Party Disclosures' from the requirement to disclose transactions
between Group companies as these have been eliminated on consolidation.
The Card Factory Foundation is considered a related party of the Group due to
one common individual considered as key management personnel. In the year
ended 31 January 2025 the Group donated £1.4 million (2024: £1.5m) to the
Foundation from carrier bag sales and has an outstanding balance owed to the
Foundation of £0.1m at 31 January 2025 (2024: £0.5m).
22 Business combination
Business combinations are accounted for using the acquisition method. The
identifiable assets acquired and liabilities assumed are recognised at their
fair values at the acquisition date.
Acquisition of SA Greetings
Following the end of the measurement period, the acquisition accounting for SA
Greetings (acquired in FY24) has been finalised. There were no adjustments to
the provisional values reported in the FY24 financial statements.
Acquisitions of Garlanna and Garven
During FY25, the Group acquired Garven Holdings LLC ('Garven') and Garlanna
Holdings Limited ('Garlanna'). Acquisition-related costs totalling £0.7
million have been expensed and included within operating expenses in the
Consolidated Income Statement. These costs have been excluded from adjusted
PBT as they are one-off in nature and this can be seen in the glossary below.
The purchase price allocation for the acquisitions of Garven Holdings and
Garlanna Holdings was prepared on a provisional basis in accordance with IFRS
3 with the fair values of the assets and liabilities set in the table below.
Garven Holdings Garlanna Holdings Total
£'m £'m fair value
£'m
Non-current assets 0.1 0.2 0.3
Property, plant & equipment - 0.2 0.2
Right-of-use assets 0.1 - 0.1
Current assets 3.7 2.2 5.9
Inventories 0.2 1.0 1.2
Trade & other receivables 1.5 0.6 2.1
Cash at bank and in hand 2.0 0.6 2.6
Total assets 3.8 2.4 6.2
Current liabilities (0.9) (1.8) (2.7)
Trade & other payables (0.8) (0.3) (1.1)
Tax payable - (0.1) (0.1)
Lease liabilities (0.1) - (0.1)
Provisions - (1.4) (1.4)
Total liabilities (0.9) (1.8) (2.7)
Net assets of acquired subsidiaries 2.9 0.6 3.5
Add: Intangible assets (note 12) 10.0 2.9 12.9
Add: Goodwill (note 12) 8.7 - 8.7
Total consideration paid 21.6 3.5 25.1
Less cash acquired: (2.0) (0.6) (2.6)
Net cash outflow 19.6 2.9 22.5
The gross contractual amounts related to trade & other receivables is
£2.1 million and at the acquisition date, the Group's best estimate of the
contracted cash flows not expected to be collected is £nil.
Acquisition of Garlanna
On 4 September 2024, the Group completed the acquisition of 100% of the share
capital of Garlanna Holdings Limited and its subsidiary companies
('Garlanna').
Garlanna trades as a publisher and wholesale supplier of cards, wrap and gift
bags in the Republic of Ireland. The acquisition will strengthen the Group's
position within the Republic of Ireland market and is expected to provide
further wholesale opportunities, in particular in the convenience sector where
the Group previously has limited exposure.
The total cash consideration for the transaction was £3.5 million (€4.2
million), all of which was paid in cash on the acquisition date, giving
consideration of £2.9 million (€3.6 million) on a cash free, debt free
basis. The agreement included €0.2 million of deferred contingent
consideration but this has not and will not become payable due to the payment
criteria not being met and the period of consideration has expired.
We have made fair value adjustments to the assets and liabilities in the
acquiree's local financial records in arriving at the provisional fair values
as required by IFRS 3 which are detailed below:
- Aligning Garlanna's inventory provision with Group accounting
policies, increasing the provision by £0.6 million
- Recognising a provision (£0.6 million) in relation to costs
expected to be incurred to return leased property to its original state.
The fair value of the net assets acquired was £0.6 million. We have
recognised £2.9 million of identifiable intangible assets linked to the
existing customer relationships in the acquired business, see note (10) for
further details. This gives a total fair value of net assets acquired of £3.5
million, which is equal to the fair value of consideration paid resulting in
no recognition of goodwill.
Garlanna contributed revenue of £1.7 million and £0.4 million to the Group's
profit after tax for the period between the date of acquisition and the
reporting date. If the acquisition of Garlanna had been completed on the first
day of the financial year, Group revenues for the year to 31 January 2025
would have been £546.3 million and Group profit after tax would have been
£48.3 million. Garlanna has a similar seasonal trading pattern to the rest of
the Group and generates the majority of its sales and profits in the second
half of the financial year.
Acquisition of Garven
On 04 December 2024, the Group completed the acquisition of 100% of the
members' interest of Garven Holdings, LLC and its subsidiary companies
('Garven').
Garven trades as Garven Design and Cadence Packaging and is a leader in the
design and wholesale of gifts and celebration essentials, based in Minnesota,
USA.
In line with cardfactory's growth plan, this acquisition accelerates our
partnerships strategy in one of our key international target markets.
It marks cardfactory's physical entry into the US gifts and celebration
essentials market, which represents the biggest market globally at circa £70
billion in total.
Garven has an established customer base of general and speciality retailers
which will allow cardfactory to further explore design and buying synergies,
alongside opportunities to introduce its own ranges into the US wholesale
market. We consider that this is a key factor in the recognition of goodwill
related to this acquisition.
The total cash consideration for the transaction was £21.6 million ($27.5
million), all of which was paid in cash on the acquisition date, giving
consideration of £19.6 million ($25.0 million) on a cash free, debt free
basis. There is no further contingent or deferred consideration payable.
There were no fair value adjustments required by IFRS 3 made to the acquired
assets and liabilities in the acquiree's local financial records in arriving
at the provisional fair values.
The fair value of the net assets acquired is £2.9 million. We have recognised
£10.0 million of identifiable intangibles assets linked to the existing
customer relationships in the acquired business and acquired brands, see note
10 for further details. This gives a total fair value of acquired assets of
£12.9 million, which is lower than the fair value of the consideration paid
(Including cash acquired) of £21.6 million, the balance has resulted in
recognition of £8.7 million of goodwill which is not deductible for tax
purposes.
Garven Holdings, LLC contributed revenue of £2.2 million and a profit of
£0.2 million to the Group's profit after tax for the period between the date
of acquisition and the reporting date.
If the acquisition of Garven had been completed on the first day of the
financial year, Group revenues for the year to 31 January 2025 would have been
£568.7 million and Group profit after tax would have been £50.5 million.
Garven has a similar seasonal trading pattern to the rest of the Group and
generates the majority of its sales and profits in the second half of the
financial year.
Explanatory Notes
Alternative Performance Measures ('APMS') and other explanatory information
In the reporting of the consolidated financial statements, the Directors have
adopted various Alternative Performance Measures of financial performance,
position or cash flows other than those defined or specified under
International Accounting Standards ('IFRS').
These measures are not defined by IFRS and therefore may not be directly
comparable with other companies' APMs, including those in the Group's industry
or that appear to have similar titles or labels. APMs should be considered in
addition to IFRS measures and are not intended to be a substitute for IFRS
measurements.
The Directors believe that these APMs provide additional useful information on
the performance and position of the Group and are intended to aid the user in
understanding the Group's results.
The APMs presented are consistent with measures used internally by the Board
and management for performance analysis, planning, reporting and incentive
setting purposes. In FY25 we have broadened our adjustments to the P&L and
cash flow to aid clarity and consistency in understanding measures that are
relevant to our capital allocation policy.
The table below sets out the APMs used in this report, with further
information regarding the APM, and a reconciliation to the closest IFRS
equivalent measure, below.
Sales APMs Like-for-like Sales (LFL)
Profitability APMs EBITDA
Adjusted Profit Before Tax (PBT)
Adjusted EPS
Financial Position APMs Net Debt
Leverage and Adjusted Leverage
Cash Flow APMS Operating Cash Conversion
Free cash flow
Following the approval of the Group's updated capital allocation policy,
Adjusted Leverage and Adjusted EPS have been included in this report for the
first time. These measures play an important role in the Group's capital
allocation decisions.
Sales APMs
LFL Sales
Closest IFRS Equivalent: Revenue
Like-for-like or LFL calculates the growth or decline in gross sales in the
current period versus a prior comparative period.
For stores, LFL measures exclude any sales earned from new stores opened in
the current period or closed since the comparative period and only consider
the time period where stores were open and trading in both the current and
prior period.
LFL measures for product lines or categories, where quoted, are calculated
using the same principles.
LFL measures for our online businesses (cardfactory.co.uk and
gettingpersonal.co.uk) compare gross sales for the current and comparative
period made through the respective online platform.
All LFL measures in this report compare FY25 to FY24, unless otherwise stated.
In addition, the Group reports combined Like-for-Iike sales measures for
certain components of the business as follows:
· "cardfactory LFL" is defined as Like-for-like sales in stores plus
Like-for-like sales from the cardfactory website www.cardfactory.co.uk.
· "Online": Like-for-like sales for cardfactory.co.uk and
gettingpersonal.co.uk combined.
Sales by Printcraft, the Group's printing division, to external third-party
customers and partnerships sales are excluded from any LFL sales measure.
Reconciliation of Revenue to LFL Sales
cardfactory Stores cardfactory Online cardfactory LFL Getting Personal
£m £m £m £m
Revenue FY25 506.8 8.8 515.6 4.4
VAT / other 99.0 1.9 100.9 1.0
Adjustment for Stores not open in both periods (14.5) - (14.5) -
LFL Sales FY25 591.3 10.7 602.0 5.4
Revenue FY24 478.9 8.8 487.7 5.9
VAT / other 93.3 1.9 95.2 1.5
Adjustment for Stores not open in both periods (0.4) - (0.4) -
LFL Sales FY24 571.8 10.7 582.5 7.4
LFL Sales Growth 3.4% +0.1% 3.3% -27.4%
Note percentages are calculated based on absolute figures before rounding.
Profitability APMs
EBITDA
Closest IFRS Equivalent: Operating Profit(1)
EBITDA is earnings before interest, tax, gains or losses on disposal,
depreciation, amortisation and impairment charges. Earnings is equivalent to
profit after tax calculated in accordance with IFRS and each adjusting item is
calculated in accordance with the relevant IFRS.
The Group uses EBITDA as a measure of trading performance, as it usually
closely correlates to the Group's operating cash generation.
Reconciliation of EBITDA to Operating Profit
FY25 FY24
£m £m
Operating Profit 79.3 76.4
Add back:
Depreciation 45.0 43.5
Amortisation 3.5 2.8
Losses/(gains) on disposal 0.1 (1.2)
Impairment (reversals)/charges (0.4) 1.1
EBITDA 127.5 122.6
Deduct unrealised gains on derivative contracts (1.5) -
Add back one-off restructuring costs 1.9 -
Add back acquisition related transaction costs 0.7 -
Deduct Covid provision release - (2.0)
Adjusted EBITDA 128.6 120.6
(1 (#_ftnref1) ) Whilst operating profit is not defined formally in IFRS, it
is considered a generally accepted accounting measure.
Adjusted PBT
Closest IFRS Equivalent: Profit Before Tax
Adjusted PBT is Profit Before Tax adjusted to exclude the effect of
transactions that, in the opinion of the Directors, are either one-off in
nature and/or are unreflective of the underlying trading performance of the
Group in the period. Adjusted PBT reports a normalised or underlying trading
performance of the Group.
The transactions that have been adjusted could distort the impression of
future performance trends based on the current year results. The Group uses
Adjusted PBT to assess its performance on an underlying basis excluding these
items and believe measures adjusted in this manner provide additional
information about the impact of unusual or one-off items on the Group's
performance in the period.
In FY25 the Directors have identified the following items that they believe to
meet the definition of 'one-off/non-underlying' for this purpose:
· Non-recurring finance charges related to refinancing completed in
April 2024 of £0.5 million.
· Transaction costs related to the acquisitions of Garven and Garlanna
of £0.7 million.
· Amortisation charged relating to intangible assets recognised as a
result of the acquisitions of Garven and Garlanna of £0.3 million.
· One-off restructuring costs of £1.9 million associated with the
closure of the Getting Personal platform and streamlining central support
operations.
· Unrealised gains of £1.5 million on derivative contracts held at 31
January 2025.
In FY24 the Directors have identified the following items that they believe to
meet the definition of 'one-off' for this purpose:
· The gain on bargain purchase related to the acquisition of SA
Greetings of £2.6 million.
· A gain relating to the release of Covid-related provisions of £2.0
million
· An impairment charge relating to Getting Personal of £1.1 million
Reconciliation of Adjusted PBT to Profit Before Tax.
FY25 FY24
£m £m
Profit Before Tax 64.1 65.6
Add back / (Deduct):
Non-recurring refinancing charges 0.5 -
Acquisition-related transaction costs 0.7 -
Amortisation of acquired intangibles 0.3 -
One-off restructuring costs 1.9 -
Unrealised gains on derivative contracts (1.5) -
Acquisition gain - (2.6)
Covid provision release - (2.0)
GP intangible impairment - 1.1
Adjusted PBT 66.0 62.1
The following table reconciles the impact of adjusting items as above on
Adjusted Gross Profit, adjusted operating profit and Adjusted Profit Before
Tax.
Reconciliation of Adjusting items on the Income Statement (FY25)
FY25 FY24
£m £m
Gross profit 193.8 184.9
Add back one-off restructuring costs 0.6 -
Deduct unrealised gains on derivative contracts (1.5) -
Adjusted Gross Profit 192.9 184.9
Operating expenses (114.5) (110.5)
Other operating income - 2.0
Add back acquisition-related transaction costs 0.7 -
Add back one-off restructuring costs 1.3 -
Add back amortisation of acquired intangibles 0.3 -
Add back GP Intangible impairment - 1.1
Deduct Covid provision release - (2.0)
Adjusted operating profit 80.7 75.5
Finance costs (15.2) (13.4)
Gain on bargain purchase - 2.6
Add back non-recurring refinancing charges 0.5 -
Deduct acquisition gain - (2.6)
Adjusted Profit Before Tax 66.0 62.1
Adjusted EPS
Closest IFRS Equivalent: Basic EPS
Adjusted EPS is earnings per share adjusted to exclude the post-tax effect of
items identified as one-off and excluded from Adjusted PBT in the period.
The Group calculates adjusted EPS as it is the basis of dividend calculations
under its capital allocation policy, under which the Board targets a dividend
cover ratio of between 2-3x Adjusted EPS.
The starting point of the calculation is Adjusted PBT, as calculated above.
Calculation of Adjusted EPS
FY25 FY24
£m £m
Adjusted PBT 66.0 62.1
Tax charge (16.3) (16.1)
Tax impact of non-underlying items (0.2) 0.5
Adjusted PAT 49.5 46.5
Weighted average number of shares 346,910,019 343,339,468
Adjusted EPS 14.3p 13.5p
Financial Position APMs
Net Debt
Closest IFRS Equivalent: No equivalent; however is calculated by combining
IFRS measures for Cash and Borrowings.
Net Debt is calculated by subtracting the Group's cash and cash equivalents
from its gross borrowings (before debt-issue costs). Net Debt is a key measure
of the Group's balance sheet strength, and is also a covenant in the Group's
financing facilities. The Group presents Net Debt both inclusive and exclusive
of lease liabilities, but focusses upon the value exclusive of lease
liabilities, which is consistent with the calculation used for covenant
purposes.
Calculation of Net Debt
FY25 FY24
£m £m
Current Borrowings 0.1 7.1
Non-Current Borrowings 73.9 37.9
Add back Debt Issue Costs 1.4 0.7
Gross Borrowings 75.4 45.7
Less cash (16.5) (11.3)
Net Debt (exc. Leases) 58.9 34.4
Add back Lease Liabilities 110.4 100.8
Net Debt (inc. Leases) 169.3 135.2
Leverage & Adjusted Leverage
Closest IFRS Equivalent: No equivalent; however is calculated with reference
to Net Debt and EBITDA, which are reconciled to relevant IFRS measures in this
section.
Leverage is the ratio of Net Debt (excluding lease liabilities) to EBITDA for
the previous 12 months expressed as a multiple. Adjusted Leverage is
calculated in the same way but deducts lease-related charges from EBITDA. The
Group monitors and reports leverage as a key measure of its financing position
and as an assessment of the Group's ability to manage and repay its debt
position. Adjusted Leverage is consistent with a covenant defined with-in the
Group's financing facilities.
Under its capital allocation policy, the Group targets Adjusted Leverage below
1.5x throughout the financial year. The Group have remained within the maximum
adjusted leverage target in the year to 31 January 2025. As described in the
financial review above, the Group's cash flows and earnings are materially
affected by seasonality, with higher sales and cash flows in the second half
of the year linked to the Christmas season. As a result, Net Debt levels are
lower and Leverage improved at the year end, after the Christmas season.
Calculation of Leverage
FY25 FY24
£m £m
Net debt (as calculated above) A 58.9 34.4
EBITDA (as calculated above) B 127.5 122.6
IFRS 16 depreciation (36.3) (35.9)
IFRS 16 impairment reversal 0.4 0.2
Gains on modification/disposal (0.1) 1.2
IFRS 16 interest (8.0) (6.3)
EBITDA less rent costs C 83.5 81.8
Leverage (A/B) 0.5x 0.3x
Adjusted Leverage (A/C) 0.7x 0.4x
Cash Flow APMs
Operating Cash Conversion
Closest IFRS Equivalent: No equivalent; however is calculated with reference
to Cash from Operating Activities (an IFRS measure) and EBITDA, which is
reconciled to Operating Profit in this section
Operating cash conversion is Cash from operations (calculated as cash from
operating activities before corporation tax payments) per the cash flow
statement prepared in accordance with IFRS divided by EBITDA and expressed as
a percentage.
Calculation of Operating Cash Conversion
FY25 FY24
£m £m
Cash from Operations 105.6 118.7
EBITDA 127.5 122.6
Operating Cash conversion 82.9% 96.8%
Free Cash Flow
Closest IFRS Equivalent: No equivalent; however it is calculated with
reference to net cash inflow from operating activities (an IFRS measure).
Free cash flow is net cash inflow from operating activities per the cash flow
statement prepared in accordance with IFRS less capital expenditure, lease
payments (including interest) and net finance costs and adding proceeds from
disposals of fixed assets.
Adjusted Free Cash Flow excludes the impact of cashflows that are considered
one-off in nature. In FY25, this includes £6.1 million of working capital
outflow which is deemed one-off due to timing of payments, total fees of £1.6
million related to the refinancing completed in April 2024, transaction costs
paid in the year related to acquisitions of £0.7 million and £3.3 million
related to repayment of Covid grant funds.
Calculation of Free Cash Flow
FY25 FY24
£m £m
Net cash inflow from operating activities 88.9 105.2
Less:
Capital expenditure (18.4) (27.8)
Lease payments (inc. Interest) (45.6) (43.8)
Net finance costs (7.8) (6.5)
Proceeds from disposal of fixed assets 0.2 -
Free Cash Flow 17.3 27.1
Adjusted Free Cash Flow 29.0 27.1
Net finance costs including interest received on bank deposits, interest paid
on bank borrowings and other financing costs paid.
Other Financial Calculation Information
Unless otherwise stated, amounts in this report are presented in Pound
Sterling (GBP), and have been rounded to the nearest £0.1 million.
Information in tables or charts may not add down or across, or calculate
precisely, due to rounding.
Percentage movements, where provided, are based on amounts before they were
rounded to the nearest £0.1 million.
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