REG - Card Factory PLC - Half-year Report
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RNS Number : 3103B Card Factory PLC 30 September 2025
30 September 2025
Card Factory plc ("cardfactory" or the "Group")
Interim results for the six months ended 31 July 2025
Resilient revenue performance with continued strategic progress. Full year
expectations unchanged.
cardfactory, the UK's leading specialist retailer of greeting cards, gifts and
celebration essentials, announces its interim results for the six months ended
31 July 2025 ('HY26').
Financial summary1
Financial Metrics HY26 HY25 Change FY25
Revenue £247.6m £233.8m +5.9% £542.5m
Adjusted EBITDA(2) £44.2m £45.3m -2.4% £128.6m
Adjusted PBT(2) £13.2m £14.5m -9.0% £66.0m
Adjusted EPS 2.8p 3.1p -0.3p 14.3p
Dividend per share 1.3p 1.2p +0.1p 4.8p
Net Debt (exc. Leases) £78.9m £74.9m +5.3% £58.9m
Adjusted Leverage (exc. Leases)(3) 1.0x 0.9x +0.1x 0.7x
Cash from operations £30.5m £17.5m +74.3% £105.6m
EBITDA £39.1m £45.3m -13.7% £127.5m
Profit Before Tax (PBT) £7.5m £14.0m -46.4% £64.1m
Basic EPS 1.6p 3.0p -46.7% 13.8p
1 For further information and definitions of Like-for-like (LFL) and other
alternative performance measures, see "Alternative Performance Measures"
("APMs") in the appendix.
(2) Adjusted measures for HY26 exclude the impact of one-off items totalling
£5.7 million. This includes amortisation of acquisition intangibles,
revaluation of foreign exchange derivative instruments and one-off acquisition
costs relating to the post balance sheet acquisition of Funky Pigeon (HY25:
£0.5 million gain on one-off financing costs). See the appendix to this
interim report for full reconciliation of Adjusted Performance Measures.
(3) Adjusted Leverage is the ratio of Net Debt (excluding lease liabilities)
to EBITDA less lease related charges which is consistent with our RCF facility
covenant reporting.
Darcy Willson-Rymer, Chief Executive Officer, commented:
"Our resilient first half performance against a challenging retail backdrop
demonstrates the effective execution of our growth strategy and our ability to
navigate inflationary pressures.
"Our core stores business performed positively during the period, supported by
new store openings, while our ongoing range development resonated strongly
with customers, driving successful Spring seasons. At the same time, we
continued to advance our growth priorities, expanding partnerships and
accelerating our digital strategy through the acquisition of Funky Pigeon.
"With the peak festive season ahead, we are well prepared for our most
important trading period. Building on the success of our H1 seasonal
performance, we have strong plans in place for H2 to deliver on our quality
and value proposition including new Christmas ranges and a significantly
expanded Halloween range. These plans, combined with our ongoing productivity
and efficiency programme, mean our expectations for the full year remain
unchanged."
Business highlights
· Group revenue of £247.6 million in HY26, up by +5.9% compared to
HY25, reflects positive performance in core stores business and continued
execution of our strategy:
o Total store revenue growth of +2.9%, including the contribution of +30
net new stores year-on-year, of which 13 were opened in HY26.
o Like-for-like (LFL) store revenue grew by +1.5%, in line with the
non-food retail sector(4) and against a backdrop of softer summer high street
footfall(5) due to the hot weather.
o Good momentum continued across our HY26 Spring seasons, particularly
Valentine's Day and Mother's Day, with card range development and new gift and
celebration essentials resonating strongly with customers.
o Strong organic partnership performance delivered double-digit revenue
growth, supported by expanded offerings.
o Encouraging performance from recently acquired businesses in North America
and Republic of Ireland, in line with management expectations.
o Total partnerships revenue in the period of £16.5 million, (HY25: £6.6
million) newly acquired business performed well and contributed positively.
o LFL sales at cardfactory.co.uk were down (11.3%) as we continue to evolve
our offer to focus on higher margin sales.
· A decision to bring forward efficiency-focused investments, including
upgrade to point of sale till system, contributed to Adjusted PBT for the
first half being down £1.3 million to £13.2 million.
· Our structured, multi-year, 'Simplify and Scale' productivity and
efficiency programme, largely mitigated the significant impact from rises in
National Minimum Wage and employer National Insurance contributions, as well
as wider inflationary pressures.
· A significant improvement in Free Cash Flow due to improved working
capital, from an outflow of -£24.9 million in HY25 to -£7.5 million in HY26.
· Interim dividend of 1.3 pence compared to 1.2 pence in HY25, an
increase of 4.9%, demonstrates our commitment to delivering sustainable,
progressive returns to shareholders.
· The Board has approved a plan to purchase shares, initially, to
satisfy employee share scheme awards to avoid equity dilution.
(4 BRC-KPMG Retail sales monitor February 2025 - July 2025)
(5) (BRC-SENSORMATIC Footfall Monitor May 2025 - August 2025 )
Post-period activity: Completion of Funky Pigeon to accelerate digital
strategy
· Acquisition of Funky Pigeon was completed in August 2025 for a
consideration of £24.1 million and saw us become the second largest online
card and attached gifting retailer in the UK market.
· The acquisition will accelerate our existing digital strategy,
providing a platform for online growth, particularly in the
direct-to-recipient card and attached gifting market.
· The Group expects the acquisition to be earnings enhancing in the
financial year ended 31 January 2027, the first full year post-completion.
· Work is now underway to unlock annual synergy benefits of more than
£5 million, which will be achieved by the end of FY27 through optimising
manufacturing, fulfilment, technology platforms and ranging.
Outlook
· Despite the challenging consumer environment, our H2 expectations
remain unchanged as we deliver on our expanded celebrations offer and strong
value proposition, particularly across Halloween and the important Christmas
season.
· As previously highlighted, PBT will follow a similar second-half
weighting profile to FY25, reflecting seasonality of sales, timing of
investments and realisation of inflation mitigation actions.
· Whilst we are yet to trade through the festive period, our
expectations of mid-to-high single-digit percentage growth in Adjusted PBT in
FY26 are unchanged, reflecting our resilient revenue performance, strong H2
trading plans, and the benefits of our 'Simplify and Scale' programme.
Interim results webcast
There will be a virtual presentation and Q&A session for analysts and
investors at 10am this morning. Please register for the event via the
following link:
https://storm-virtual-uk.zoom.us/webinar/register/WN_rDIgvN4MQQeJhSxSczKvuw
(https://storm-virtual-uk.zoom.us/webinar/register/WN_rDIgvN4MQQeJhSxSczKvuw)
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)
BUSINESS UPDATE
Performance in the period
HY26 saw further operational and strategic progress as we continued to execute
our 'Opening Our New Future' growth strategy.
Total store revenue was up +2.9% in HY26, which included contribution from 30
net new stores year-on-year, of which 13 were opened in HY26, as we continue
to reach more customers, in more locations.
LFL store revenue growth of +1.5% was in line with the wider non-food retail
sector, despite the backdrop of softer summer high street footfall, primarily
due to the unusually hot weather. Ongoing development of our stores and range
innovation as well as the continued momentum across our HY26 Spring seasons,
particularly Valentine's Day and Mother's Day, drive Like-for-like growth.
We have continued to develop and evolve our card, gift and celebration
essentials ranges as we work to grow share of the celebration occasions
market. Highlights in H1 include a new, in-house designed premium card range
which is allowing us to broaden our appeal to a more affluent demographic. By
doing so, we are realising a higher average selling price, while continuing to
deliver superior value compared to competitors. Stronger alignment of how we
optimise our store space and develop our gift and celebration essentials
ranges has also contributed positively to store and category growth through
the period. In H1 this approach saw a condensed but updated milestone age gift
range introduced which freed up additional space for new stationery ranges.
Together, this contributed to a +20% LFL increase in stationery sales in HY26
and +7% year-on-year uplift in our milestone age range, despite the lower
space allocation.
LFL sales at cardfactory.co.uk were down (11.3%) as we continued to evolve our
offer to focus on higher margin sales. Ahead of the acquisition of Funky
Pigeon, we continued to develop our omnichannel propositions, including roll
out of a balloon appointment trial to 60 stores in Q1, enabling customers to
pre-order inflated balloon arrangements online to collect in store. Initial
customer feedback has been positive and we continue to test and evaluate.
We saw strong performance in our organic partnerships business with double
digit revenue growth of +15.7% in H1. This reflects the successful impact of
our full-service model and how we are building on this through further range
expansions with UK partners.
Recently acquired businesses, Garven in North America and Garlanna in Republic
of Ireland, delivered encouraging performance for the period, which was in
line with management expectations.
Strategy update
We have continued to make good progress across our strategic building blocks
of growth as we focus on becoming a global celebrations group.
Stores: Optimising our highly profitable store estate to grow share of
celebration occasions market
· Continued to expand our profitable store estate to reach more
customers with our leading quality and value proposition and have now
surpassed the milestone of 1,100 stores across the UK and Republic of Ireland.
· Range innovation and development continues to drive category growth with
highlights in the first half including 28% growth in our baby gift sales and
23% growth in party tableware.
Digital: Accelerating digital growth through acquisition of Funky Pigeon
· The acquisition of Funky Pigeon provides access to a large established
customer base and a high-quality technology platform to accelerate growth in
the direct-to-recipient card and attached gifting market.
· Plans in place to enhance data collection from our 24 million unique
store customers that can then be leveraged across Funky Pigeon's digital
platform and our existing omnichannel offer.
Partnerships: Growth through development of strategic partnerships
· Good progress in establishing the foundations for growing our
business in North America. The ongoing trial with a leading US retailer
continues to provide valuable insights and demonstrates the strength of our
quality and value proposition to US consumers.
· Full-service model driving success in UK partnerships including
across full UK and Republic of Ireland Aldi estate, with seasonal card
introduced in H1 for Mother's Day and Father's Day.
· Third party logistics partner onboarded in Australia to facilitate H2
rollout of full-service model to The Reject Shop, which has also opened up a
new wholesale opportunity in New Zealand.
Preparations for Christmas
Preparations are well advanced as we enter the peak festive trading period and
are well positioned to meet customer needs through our quality and value
offer.
Roll out of our seasonal offer is underway with a strong, Christmas range,
built around our value proposition. Alongside new premium card ranges, over
80% of Christmas gift ranges are new for 2025, including a new Secret Santa
range, as well as 95% newness in celebration essentials which feature premium
ranges and market leading value offers to drive volume on roll-wrap products.
Operational preparations for the Christmas trading period are also underway
with stock build on schedule, an optimised replenishment process in place and
a new 'Set to Celebrate' programme rolled out to support in-store customer
experience.
Ahead of the peak Christmas season, this year we have introduced a
significantly enhanced Halloween range, aligned to consumer trends for this
growing celebration occasion. Nationwide marketing campaigns will support both
seasonal events.
Outlook
Despite the challenging consumer environment, our expectations for H2 remain
unchanged. Building on the success of our H1 seasonal performance, our peak
trading plans are in place to deliver on our expanded celebrations offer and
strong value proposition, particularly across Halloween and the important
Christmas season.
Initiatives identified through our continuous 'Simplify and Scale'
productivity and efficiency programme will enable us to mitigate the more than
£20 million FY26 cost inflation, which includes significant rises in National
Living Wage and employer National Insurance contributions, as well as wider
inflationary pressures. H1 actions have included continued efficiencies in
store labour, optimisation of warehouse and agency labour and in-sourcing of
printing and distribution of our store merchandising materials. Robust plans
are in place to mitigate the full impact through H2, including additional
store labour productivity and efficiency benefits from the H1 investment in an
upgraded till PoS system and range development.
Seasonality of sales, timing of investments and realisation of inflation
mitigation actions through our 'Simplify and Scale' programme, means PBT will
follow a similar second-half weighting profile as was realised in FY25.
Whilst we are yet to trade through the peak period, given the above, our
expectations for mid-to-high single-digit percentage growth in Adjusted PBT in
FY26 are unchanged.
Group Financial Review
Financial Highlights
cardfactory delivered a resilient financial performance in the first half of
FY26, delivering mid-single digit percentage revenue growth and containing the
impact of continued, significant increases in National Living Wage and
Employer National Insurance contributions through the benefits of our
'Simplify and Scale' programme.
The highlights of the period are as follows:
· Group revenue growth of +5.9% to £247.6 million for the half year:
o Total store revenue up +2.9% including positive contribution from +13 new
stores.
o LFL stores growth of +1.5% (HY25: +3.7%) through a combination of range
development and expansion as well as targeted pricing.
o Strong seasonal trading performance with LFL sales growth for Valentine's
Day and Mother's Day which included a new record trading day the Saturday
before Mother's Day.
o Partnerships revenue of £16.5 million (HY25: £6.6 million) includes
contributions from Garlanna, acquired in September 2024, and Garven, acquired
in December 2024, both of which continue to deliver in line with our
expectations, plus double-digit percentage growth in organic partnerships.
· Adjusted PBT of £13.2 million (HY25: £14.5 million) is lower than last
year, reflecting timing and delivery of investments, alongside inflation
mitigation actions.
· Statutory Profit Before Tax of £7.5 million (HY25: £14.0 million)
includes £5.7 million non-underlying costs related to acquisitions and FX
derivatives.
· Strong improvement in cash performance year-on-year, with Free Cash
Flow ahead of HY25 at -£7.5 million (HY25: -£24.9 million).
· Strong balance sheet, with positive operating cash flows and Net Debt
of £78.9 million (HY25: £74.9 million). Final dividend of £12.6 million in
respect of FY25 paid in June 2025.
· Recommended interim dividend increased to 1.3p per share (HY25: 1.2p) in
line with our commitment to delivering progressive returns to shareholders.
· Progressing our digital strategy:
o Getting Personal platform closed from 31 January 2025, with an associated
reduction in sales but benefit to bottom line.
o Acquisition of Funky Pigeon completed on 14 August 2025 (after period
ended) for cash consideration of £24.1 million.
HY26 HY25 Change Change %
Revenue £247.6m £233.8m £13.8m 5.9%
Adjusted EBITDA(1) £44.2m £45.3m (£1.1m) (2.4%)
Adjusted EBITDA margin 17.8% 19.4% (1.6%) (1.6 ppts)
Adjusted PBT(1) £13.2m £14.5m (£1.3m) (9.0%)
Adjusted PBT margin 5.3% 6.2% (0.9%) (0.9 ppts)
Adjusted earnings per share(1) 2.8 pence 3.1 pence (0.3 pence) (9.7%)
Dividend per share 1.3 pence 1.2 pence 0.1 pence 4.9%
Net Debt (exc. Leases) £78.9m £74.9m £4.0m 5.3%
Adjusted Leverage(2) 1.0x 0.9x 0.1x 11.1%
Cash from operations £30.5m £17.5m £13.0m 74.3%
EBITDA £39.1m £45.3m (£6.2m) (13.7%)
Profit Before Tax (PBT) £7.5m £14.0m (£6.5m) (46.4%)
Basic earnings per share 1.6 pence 3.0 pence (1.4 pence) (46.7%)
(1) Adjusted measures for HY26 exclude the impact of one-off items totalling
£5.7 million. This includes amortisation of acquisition intangibles,
revaluation of foreign exchange derivative instruments and one-off acquisition
costs relating to the post balance sheet acquisition of Funky Pigeon (HY25:
£0.5 million gain on one-off financing costs). See the appendix to this
interim report for full reconciliation of Adjusted Performance Measures.
(2 )Adjusted Leverage is the ratio of Net Debt (excluding lease
liabilities) to EBITDA less lease related charges which is consistent with our
RCF facility covenant reporting.
Financial Performance
Sales
Total Sales
HY26 HY25 Change %
£m £m
cardfactory Stores 227.8 221.4 2.9%
cardfactory Online 3.2 3.7 (12.2%)
Getting Personal - 2.1 (100.0%)
Partnerships 16.5 6.6 150.4%
Other 0.1 - 100.0%
Group 247.6 233.8 5.9%
LFL Sales
HY26 HY25 Change %
cardfactory Stores +1.5% +3.7% -2.2 ppts
cardfactory Online -11.3% +5.9% -17.2 ppts
cardfactory LFL +1.3% +3.7% -2.4 ppts
Total Group sales for HY26 were £247.6 million, an increase of £13.8 million
compared to the same period last year.
Our store portfolio remains the core of our business and the source of a
significant majority of our revenues. Store sales have continued to grow and
are in line with the wider non-food retail sector in the period against a
backdrop of softer summer footfall linked to hot weather.
Total Stores revenue increased by £6.4m (2.9%) driven by Like-for-like (LFL)
sales in stores of +1.5% compared to last year and the impact of +30 net new
stores year-on-year, 13 of which were opened in the first half of this year.
Spring seasons (Valentine's Day, Mother's Day and Father's Day) performed
well, driven by our continuous range development. The Saturday prior to
Mother's Day was the record sales day for the Group.
Average basket values increased by +4.1%. The increase in basket values was
supported by higher average selling prices, delivered via a combination of
targeted price activity and continuing to expand and develop our range. In H1
this included a new in-house designed premium card range, helping to develop
the higher end of our pricing architecture and appeal to customers seeking a
higher quality product, whilst maintaining good value at these higher price
points.
We continue to optimise and improve our store portfolio and during HY26 added
13 net new stores to our store network. We opened 16 new stores and closed 3
increasing our portfolio to 1,103 stores, which including net new stores
opened in the second half of last year is 30 higher than 31 July 2024. 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. Since 31 July
2025, we have continued to make good progress in expanding our store network
with 1,111 stores open as of today.
Our partnerships business, which focuses on wholesale sales, delivered total
sales of £16.5 million in HY26, compared to £6.6 million in HY25.
Partnerships revenue in HY26 included a contribution of £9.8 million from
Garven and Garlanna, both acquired towards the end of FY25. Both businesses
have delivered an encouraging performance in the first half of FY26,
reflecting the first full fiscal half year of our ownership, making an
accretive contribution to both sales and margin in the period.
Our organic partnerships delivered total sales of £2.8 million (HY25: £2.4
million), including our arrangement with one of the UK's largest supermarkets,
Aldi, collectively delivering double digit percentage sales growth compared to
HY25.
Gross Profit
HY26 HY26 HY25 HY25
£m % Sales £m % Sales
Group Sales 247.6 233.8
COGs (79.8) (32.2%) (69.0) (29.5%)
Product Margin - Constant Currency(1) 167.8 67.8% 164.8 70.5%
FX gains / losses (3.2) (1.3%) (0.8) (0.3%)
Product Margin 164.6 66.5% 164.0 70.1%
Store & Warehouse Wages (67.5) (27.3%) (64.4) (27.5%)
Property Costs (12.8) (5.2%) (11.8) (5.0%)
Other Direct Costs (11.0) (4.4%) (11.6) (5.0%)
Gross Profit 73.3 29.6% 76.2 32.6%
(1)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 at the period
end.
Product margin includes the purchase price of goods, along with inbound
freight, carriage and packing. We have continued to actively manage our cost
base to mitigate ongoing inflationary pressure, whilst absolute product margin
has increased product margin rates, when calculated at a constant GBPUSD
exchange rate, have fallen from 70.5% to 67.8%. As we execute our strategy, we
expect product margins will reduce gradually over time due to the mix of
products sold in our stores shifting towards more non-card products, and the
growth of our partnerships business, both of which will reduce margin rates
but drive higher sales and cash margin which contributes positively to overall
earnings. HY26 also includes some timing impact from range change activity to
position us strongly for the key trading season in the second half of FY26.
The Group purchases approximately half of its goods for resale in US dollars
from suppliers in the Far East. We have a well-established hedging policy to
manage the risk of significant adverse fluctuations in market GBPUSD rates. In
the six months ended 31 July 2025, the US dollar was more volatile than in the
previous year, as political and economic uncertainty weighed on market rates.
The spot GBPUSD exchange rate rates increased from £1:$1.24 at 31 January
2025 to £1:$1.32 at 31 July 2025, which in the longer-term is beneficial to
the Group; however under accounting rules has a negative impact on the
valuation of our portfolio of foreign exchange (FX) contracts that are already
in place at lower rates.
The net FX loss of £3.2 million includes £3.4 million of unrealised losses
on our derivative portfolio that will mature in future years and do not
reflect current period trading performance. As a result, these losses have
been excluded from the calculation of Adjusted PBT. A full reconciliation
between statutory and adjusted figures is provided in the appendix at the end
of this report.
Store and warehouse wages increased by £3.1 million (4.8%), which included
the impact of the National Living Wage increasing by +9.8% in April 2024 and
+6.7% from April 2025, as well as the increase in Employers National Insurance
contributions to 15% and associated reduction in the National Insurance
threshold. As noted above, the store portfolio has also further expanded, by
approximately 3%, in the past 12 months. Store efficiency measures, in part
annualised from the benefits we saw in the second half of last year and which
form part of our ongoing 'Simplify and Scale' productivity and efficiency
programme, have been successful in containing the impact of these significant
cost headwinds and reducing direct wages as a percentage of overall sales.
Property costs and other direct expenses include business rates, insurance and
service charges, as well as warehouse costs, store opening costs, utilities,
maintenance, point of sale and pay-per-click expenditure. A substantial
proportion of these costs are fixed and therefore, combined, whilst these cost
lines have increased in absolute terms as the Group expands, they have reduced
as a percentage of sales year-on-year. We have seen some increases in service
charges as leases have renewed in the year, partly offset by lower marketing
costs following the closure of Getting Personal. We continue to have good
visibility of forward energy commodity costs, with our requirements out to
September 2026 secured in line with current rates.
As a result of all of these factors, gross profit for the Group, when compared
to the same period last year, decreased by £2.9 million to £73.3 million,
with a 3.0ppts fall in gross margin to 29.6%. Excluding non-underlying FX
losses, gross profit increased by £0.5 million.
EBITDA & Operating Profit
HY26 HY26 HY25 HY25
£m % Sales £m % Sales
Group Sales 247.6 233.8
Gross Profit 73.3 29.6% 76.2 32.6%
Operating Expenses (34.2) (13.8%) (30.9) (13.2%)
EBITDA 39.1 15.8% 45.3 19.4%
Adjusted EBITDA 44.2 17.8% 45.3 19.4%
Depreciation & Amortisation (7.1) (2.9%) (6.1) (2.6%)
Right-of-use asset depreciation (17.5) (7.1%) (17.7) (7.6%)
Operating Profit 14.5 5.8% 21.5 9.2%
Adjusted Operating Profit 20.2 8.1% 21.5 9.2%
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 have increased by £3.3 million overall when compared
to HY25, which includes £1.7 million of deal costs incurred in relation to
the acquisition of Funky Pigeon (excluded from Adjusted PBT) and a combined
£2.4 million of operating expenses in HY26 for Garven and Garlanna which were
acquired in H2 of FY25.
Excluding these items, the underlying operating expenses of the Group reduced
year-on-year by £0.8 million (2.6%) in spite of ongoing inflation. This
results from the success of our 'Simplify and Scale' programme which is
driving continuous efficiency and productivity improvements across the
business.
Adjusted EBITDA decreased by £1.1 million year-on-year to £44.2 million
representing the inflationary challenges offset by our ongoing efficiency
drive and cost management. Group EBITDA decreased to £39.1 million in HY26,
largely as a result of the impacts of valuation of foreign currency
derivatives, inflationary pressures seen in store wages and the Funky Pigeon
deal costs as noted previously.
Total depreciation and amortisation charges, including depreciation on
right-of-use assets, which are predominantly related to our store portfolio,
increased by £0.8 million compared to the same period last year largely due
to £0.6 million of amortisation of intangible assets, largely
customer-related assets and brands, recognised as a result of the acquisitions
of Garven and Garlanna in FY25.
Profit Before Tax
HY26 HY26 HY25 HY25
£m % Sales £m % Sales
Group Sales 247.6 233.8
Operating Profit 14.5 5.8% 21.5 9.2%
Finance Costs (7.0) (2.8%) (7.5) (3.2%)
Profit Before Tax 7.5 3.0% 14.0 6.0%
Non-underlying transactions 5.7 2.3% 0.5 0.2%
Adjusted Profit Before Tax 13.2 5.3% 14.5 6.2%
Total finance costs at £7.0 million are lower than in the prior period; the
components of this charge are set out in the table below.
HY26 HY25
£m £m
Interest paid on bank loans and overdrafts 2.8 3.0
Interest received on deposits (0.2) -
Loan issue cost amortisation 0.2 0.8
IFRS 16 Leases interest 4.2 3.7
Total Finance Expenses 7.0 7.5
Interest on our debt facilities reduced year-on-year by £0.2 million to £2.8
million, which is a result of a full six months benefitting from the 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 in FY25. The average cost of debt, taking into account margin,
indexation and the impact of hedging activity, in the period was 6.4% (HY25:
6.9%).
As a result of the refinancing in April 2024, loan issue cost amortisation in
HY25 included £0.5m of costs that are one-off in nature and were excluded
from HY25 Adjusted Profit Before Tax and have not recurred in the current
period.
Market interest rates have decreased over the last 12 months. On 31 July 2025
the Sterling Overnight Index Average (SONIA) rate stood at 3.97%, compared to
5.2% on the same day last year.
Lease interest increased by £0.5m in HY26 relative to the prior year which
reflects the number of lease renewals having taken place through the last 18
months and the effective interest rate on these leases being higher than the
previous lease due to the increase in SONIA rates since the last renewal. IFRS
16 interest costs are more heavily weighted towards the start of the overall
lease period.
As a result of the above factors, Profit Before Tax for HY26 was £7.5
million, down £6.5 million from £14.0 million for HY25. The reduction
year-on-year is predominantly driven by the non-underlying costs as below and
the impact of the National Living Wage and National Insurance increases
observed in direct wages.
Adjusted profit before tax and adjusting items
Adjusted Profit Before Tax, which excludes the one-off acquisition costs,
foreign exchange losses on derivative contracts and amortisation costs in
HY26, was £13.2 million, compared to £14.5 million in the same period last
year, which excluded the impact of the one-off debt cost amortisation. See the
"Alternative Performance Measures ("APMs") and other explanatory information"
in the appendix, for further information regarding Adjusted Profit Before Tax
and other alternative performance measures used by the Group.
Taxation
The tax charge for the six months ended 31 July 2025 of £1.9 million is based
on the expected effective tax rate for the full year of 25% (HY25: 25%).
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 the six months ended 31
July 2025 were £8.0 million, compared to £8.6 million in the same period
last year. In HY26, we received a £1.6m corporation tax refund in relation to
an overpayment for tax due on FY24 profits.
Earnings per share
The net result for the period was a statutory profit after tax of £5.6
million, decreased from £10.5 million in the same period last year. As a
result, basic earnings per share (EPS) for the year was 1.6 pence, with
diluted EPS of 1.6 pence.
Adjusted EPS, which is based on earnings calculated by applying the effective
tax rate to Adjusted PBT for the period, was 2.8 pence for HY26 (HY25: 3.1
pence).
HY26 HY25
Profit after tax (£m) 5.6 10.5
Basic EPS (pence) 1.6 pence 3.0 pence
Diluted EPS (pence) 1.6 pence 3.0 pence
Adjusted Profit after Tax (£m) 9.9 10.9
Adjusted EPS (pence) 2.8 3.1
Cash flows
HY26 HY25
£m £m
Cash from Operating Activities (after tax payments) 24.0 8.9
Capital Expenditure (7.6) (6.8)
Net bank interest paid (2.6) (3.0)
Payment of leases liabilities (including interest) (21.5) (22.2)
Other financing costs - (1.7)
Other cashflows 0.2 (0.1)
Free Cash Flow (7.5) (24.9)
Adjusted Free Cash Flow (6.3) (20.0)
Dividends paid (12.6) (15.6)
Net increase in borrowings 23.0 55.3
Net increase in cash and cash equivalents 2.9 14.8
Operating cash flows less lease repayments 6.7 (9.6)
Operating Cash Conversion 78.1% (38.6%)
The Group's cash cycle is seasonal, with typically stronger cash inflows in
the second half of the year associated with higher sales, driven by the
important Christmas season. The inverse is typically true in the first half,
with cash outflows associated with stock build and lower sales.
In that context, the Group has delivered a strong cash performance in the six
months ended 31 July 2025, with improved cash from operations (before lease
repayments and tax) of £30.5 million (HY25: £17.5 million) which has led to
Net Debt increasing by only £4.0 million compared to the prior year despite
the one-time impact of the acquisitions of Garven and Garlanna in FY25 for a
combined £22.5 million.
The improvement in operating cash flow largely reflects an improved working
capital position compared to the first half of the prior year, with a reduced
net outflow of £13.0 million (HY25: outflow of £29.3 million).
Operating Cash Conversion (which is cash from operations expressed as a
percentage of EBITDA for the period) was 78.1% (HY25: 38.6%) reflecting the
working capital outflows discussed above.
Capital expenditure increased from £6.8 million to £7.6 million which was
anticipated in the first half of the year as we invested in specific projects
including the implementation of a new till point of sale system across our
store portfolio.
Cash generated from financing activities includes a net £23.0 million draw on
our debt facilities (HY25: net £55.3 million draw on debt facilities), £17.3
million of payments in respect of lease liabilities for the store portfolio
(HY25: £18.5 million) and £12.6 million of dividend payments to shareholders
in respect of the final dividend for FY25 (HY25: £15.6 million relating to
the total dividends for FY24 ).
Free Cash Flow, which we define as net cash before M&A activity,
distributions or debt repayments, was an outflow of £7.5 million (HY25:
outflow of £24.9 million). The improvement year-on-year is largely reflective
of an improved working capital position. Adjusted Free Cash Flow excludes the
impact of one-off cash items, which in the period includes £1.2 million of
restructuring costs paid out in HY26 after being provided for at 31 January
2025. In HY25, Adjusted Free Cash Flow excludes total fees of £1.6 million
related to the refinancing completed in April 2024 and £3.3 million related
to repayment of Covid grant funds.
Acquisition of Funky Pigeon
On 14 August 2025, the Group completed the acquisition of 100% of the issued
share capital of funkypigeon.com Limited ('Funky Pigeon') from WH Smith PLC
for cash consideration of £24.1 million. The acquired business operates
funkypigeon.com, an established online personalised card and attached gifting
business, which is supported by its standalone teams in Bristol and Guernsey.
The acquisition strengthens the Group's position within the online card market
and accelerates cardfactory's digital strategy, providing a platform for
online growth, particularly in the direct-to-recipient card and
attached-gifting market. Further operational synergies will be unlocked by
utilising both Funky Pigeon's existing order fulfilment capability in Guernsey
for personalised cards and cardfactory's in-house manufacturing and fulfilment
facility in Baildon, West Yorkshire for card and attached-gifting orders.
The acquisition was funded by the Group's existing debt facilities, as we
extended the facility size by £35 million (to £160 million total) using the
accordion option in the facility agreement. A further £40 million of
accordion remains available to the Group in future if required. The additional
facility draw over and above the initial acquisition cost provides the Group
with flexibility to provide targeted investment into the acquired business as
we aim to grow our overall online presence and manage short-term working
capital flows.
Balance Sheet
Capital Expenditure
Total capital expenditure in the six months ended 31 July 2025 was £7.6
million, increased from £6.8 million in HY25. A key investment in H1 was our
point of sale (POS) till upgrade programme in stores which has been rolled out
across all stores as of August 2025, which will drive further efficiencies in
stores in line with our 'Simplify and Scale' programme.
We also continued to invest in both infrastructure and growth projects with
targeted investment to upgrade our stores, alongside opening new stores, and
ongoing development in technology, including enhanced functionality of our ERP
system.
Net Debt
HY26 Net Debt HY26 Leverage HY25 Net Debt HY25 Leverage
£m £m
Current borrowings 0.9 0.7
Non-current borrowings 96.9 99.2
Total Borrowings 97.8 99.9
Add back capitalised debt costs 1.4 1.6
Gross Bank Debt 99.2 101.5
Less cash 20.3 26.6
Net Debt (exc. Leases) 78.9 74.9
Leverage (exc. Leases) 0.6x 0.6x
Adjusted Leverage (exc. Leases) 1.0x 0.9x
Lease Liabilities 121.4 103.5
Net Debt (inc. Leases) 200.3 178.4
Leverage (inc. Leases) 1.6x 1.5x
The Group focuses on Net Debt excluding lease liabilities, which 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 banking facilities to
deduct lease-related charges from EBITDA. A full reconciliation of these
calculations is provided in the appendix at the end of this report.
Net Debt at HY26 increased by £4.0m compared to HY25. This reflects our
strong cash performance in the past 12 months, with a free cash inflow over
that period of £36.9 million, utilised to fund £22.5 million in relation to
the acquisition of Garlanna and Garven in FY25 and £16.9 million of dividend
payments.
As a result, Adjusted Leverage increased slightly to 1.0x at 31 July 2025,
comfortably below the 1.5x maximum target set in our capital allocation
policy.
The Group's banking facilities and amounts drawn in the current and prior
periods are summarised in the table below:
Facility 31 July 2025 31 July 2024 31 January 2025
(HY26) (HY25) (FY25)
£125m Revolving Credit Facility £98.0m £100.0m £75.0m
Overdraft facilities £0.9m £0.7m -
Other facilities £0.3m £0.8m £0.4m
Gross Bank Debt £99.2m £101.5m £75.4m
At 31 July 2025, the Group had undrawn committed facilities of £25.8 million
(HY25: £23.8 million) under the current financing agreement and therefore had
cash and committed facilities of £46.1 million (HY25: £50.4 million)
As noted above, the Group called £35 million of its total £75 million
accordion facility in August 2025 to fund the acquisition of Funky Pigeon.
Capital Structure and Distributions
The Board is committed to delivering long-term sustainable and progressive
returns to shareholders.
Our capital allocation policy is unchanged, and aims to balance delivery of
sustainable, long-term growth in shareholder value against cash returns to
shareholders and the needs of its other stakeholders.
The four main principles of the policy are:
· Maintain a strong balance sheet - retaining sufficient cash and
committed facilities to ensure liquidity headroom throughout the annual
operating cycle with an Adjusted Leverage ratio below 1.5x throughout the
year.
· Invest to deliver the strategy - investing capital each year to
ensure the Group complies with obligations and delivers its business plans;
investments to accelerate business progress need to deliver attractive returns
in excess of the cost of capital.
· Regular, progressive returns to shareholders - ordinary dividends
with a dividend cover ratio, based on Adjusted EPS, of between 2-3x for the
full year, paid as interim (c.25%) and final (c.75%) dividends.
· Disciplined use of surplus cash - total returns will not exceed free
cash flow generation in the period to which the returns relate.
Following the resilient performance of the Group in the first half of FY26,
and reflecting that expectations for the full year are unchanged, the Board
has proposed an interim dividend for FY26 of 1.3 pence per share, which is
based on the expected full-year dividend, subject to the financial performance
of the Group in the second half, and represents an increase of 4.9% on the
prior year (before rounding).
The interim dividend will be payable to shareholders on the share register on
7 November 2025, with payments to be made on 12 December 2025.
In addition, today we have announced the intention to purchase shares to
settle future employee share scheme for our colleagues, which will avoid
further equity dilution from these schemes arising from the issue of
approximately 3-4 million shares per annum (approximately 1% of the current
shares in issue). We expect to commence this process later in the current
financial year.
Finally, the Board will, as usual, review the Group's cash position at the end
of the year taking into account, inter-alia, the Group's financial performance
and position, as well as potential investment opportunities. Where the Board
considers surplus cash does exist, we expect to return that surplus to
shareholders at the appropriate time, whilst maintaining appropriate capital
discipline as guided by the parameters of our policy.
Consolidated income statement
For the six months ended 31 July 2025
Note Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Revenue 247.6 233.8 542.5
Cost of sales (174.3) (157.6) (348.7)
Gross profit 73.3 76.2 193.8
Operating expenses (58.8) (54.7) (114.5)
Operating profit 14.5 21.5 79.3
Finance income 5 0.2 - 0.2
Finance expense 5 (7.2) (7.5) (15.4)
Profit before tax 7.5 14.0 64.1
Taxation 6 (1.9) (3.5) (16.3)
Profit for period 5.6 10.5 47.8
Earnings per share pence pence Pence
- Basic 7 1.6 3.0 13.8
- Diluted 7 1.6 3.0 13.7
All activities relate to continuing operations.
Management assess the underlying performance of the Group based on the
Adjusted Profit Before Tax of £13.2 million in HY26 (HY25: £14.5 million).
After tax, this gives Adjusted Earnings Per Share of 2.8 pence (HY25: 3.1
pence). See the alternative performance measures section in the appendix which
provides detailed reconciliations of all alternative performance measures used
in this report.
Consolidated statement of comprehensive income
For the six months ended 31 July 2025
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Profit for the period 5.6 10.5 47.8
Items that are or may be recycled subsequently into profit or loss:
Exchange differences on translation of foreign operations - (0.2) (0.2)
Cash flow hedges - changes in fair value (3.0) (0.6) 1.4
Cost of hedging reserve - changes in fair value (0.5) (0.1) (0.1)
Tax relating to components of other comprehensive income 0.9 0.2 (0.4)
Other comprehensive (expense)/income for the period, net of income tax (2.6) (0.7) 0.7
Total comprehensive income for the period attributable to equity shareholders 3.0 9.8 48.5
of the parent
Consolidated statement of financial
position
As at 31 July 2025
Note 31 July 2025 31 July 2024 31 January 2025
£'m £'m £'m
Non-current assets
Intangible assets 9 356.4 331.7 356.5
Property, plant and equipment 10 49.3 46.3 48.7
Right of use assets 11 116.9 102.7 110.2
Deferred tax assets 0.9 1.9 0.6
Derivative financial instruments 14 1.3 0.6 0.9
524.8 483.2 516.9
Current assets
Inventories 12 68.3 56.4 61.1
Trade and other receivables 18.8 26.5 17.0
Tax receivable 6.3 4.6 1.7
Derivative financial instruments 14 0.8 0.7 2.4
Cash at bank and in hand 20.3 26.6 16.5
114.5 114.8 98.7
Total assets 639.3 598.0 615.6
Current liabilities
Borrowings (0.9) (0.7) (0.1)
Lease liabilities 11 (29.2) (22.1) (21.7)
Trade and other payables (70.7) (76.5) (76.8)
Provisions 16 (4.2) (4.2) (5.4)
Derivative financial instruments 14 (2.7) (1.3) (0.3)
(107.7) (104.8) (104.3)
Non-current liabilities
Borrowings (96.9) (99.2) (73.9)
Lease liabilities 11 (92.2) (81.4) (88.7)
Deferred tax liabilities (0.6) - (1.4)
Derivative financial instruments 14 (2.7) (0.8) (0.4)
(192.4) (181.4) (164.4)
Total liabilities (300.1) (286.2) (268.7)
Net assets 339.2 311.8 346.9
Equity
Share capital 3.5 3.5 3.5
Share premium 203.7 202.8 203.2
Hedging reserve (0.8) (0.4) 1.0
Cost of hedging reserve (0.4) (0.1) (0.1)
Reverse acquisition reserve (0.5) (0.5) (0.5)
Merger reserve 2.7 2.7 2.7
Retranslation reserve (0.6) (0.4) (0.6)
Retained earnings 131.6 104.2 137.7
Equity attributable to equity holders of the parent 339.2 311.8 346.9
Consolidated statement of changes in
equity
For the six months ended 31 July 2025
Share capital Share premium Hedging reserve Cost of hedging reserve Reverse acquisition reserve Merger reserve Retrans-lation reserve Retained earnings Total equity
£'m £'m £'m £'m £'m £'m £'m £'m £'m
Six months ended 31 July 2025
At 31 January 2025 3.5 203.2 1.0 (0.1) (0.5) 2.7 (0.6) 137.7 346.9
Total comprehensive expense for the period
Profit or loss - - - - - - - 5.6 5.6
Other comprehensive expense - - (2.2) (0.4) - - - - (2.6)
-- - (2.2) (0.4) - - - 5.6 3.0
Hedging gains and losses and costs of hedging transferred to the cost of - - 0.4 0.1 - - - - 0.5
inventory
Transactions with owners, recorded directly in equity
Shares issued - 0.5 - - - - - - 0.5
Share-based payment charges - - - - - - - 1.2 1.2
Dividends (note 8)(1) - - - - - - - (12.9) (12.9)
Total contributions by and distributions to owners - 0.5 - - - - - (11.7) (11.2)
At 31 July 2025 3.5 203.7 (0.8) (0.4) (0.5) 2.7 (0.6) 131.6 339.2
(1)Dividends in the 6 months to 31 July 2025 include £0.3 million of dividend
equivalents payable on employee share awards
Share capital Share premium Hedging reserve Cost of hedging reserve Reverse acquisition reserve Merger reserve Retrans-lation reserve Retained earnings Total equity
£'m £'m £'m £'m £'m £'m £'m £'m £'m
Six months ended 31 July 2024
At 31 January 2024 3.5 202.7 (0.6) - (0.5) 2.7 (0.4) 108.4 315.8
Total comprehensive expense for the period
Profit or loss - - - - - - - 10.5 10.5
Other comprehensive expense - - (0.4) (0.1) - - - (0.2) (0.7)
-- - (0.4) (0.1) - - - 10.3 9.8
Hedging gains and losses and costs of hedging transferred to the cost of - - 0.7 - - - - - 0.7
inventory
Deferred tax on transfers to inventory - - (0.1) -- - - - - (0.1)
Transactions with owners, recorded directly in equity
Share-based payment charges - 0.1 - - - - - 1.4 1.5
Dividends (note 8) - - - - - - - (15.9) (15.9)
Total contributions by and distributions to owners - 0.1 - - - - - (14.5) (14.4)
At 31 July 2024 3.5 202.8 (0.4) (0.1) (0.5) 2.7 (0.4) 104.2 311.8
Share capital Share premium Hedging reserve Cost of hedging reserve Reverse acquisition reserve Merger reserve Retrans-lation reserve Retained earnings Total equity
£'m £'m £'m £'m £'m £'m £'m £'m £'m
Year Ended 31 January 2025
At 31 January 2024 3.5 202.7 (0.6) - (0.5) 2.7 (0.4) 108.4 315.8
Total comprehensive expense for the period
Profit or loss - - - - - - - 47.8 47.8
Other comprehensive expense - - 1.4 (0.1) - - (0.2) (0.4) 0.7
-- - 1.4 (0.1) - - (0.2) 47.4 48.5
Hedging gains and losses and costs of hedging transferred to the cost of - - 0.2 - - - - - 0.2
inventory
Deferred tax on transfers to inventory - - - -- - - - (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 8)(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 in the year to 31 January 2025 include £0.5 million of dividend
equivalents payable on employee share awards
Consolidated cash flow statement
For the six months ended 31 July 2025
Note Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31
January 2025
£'m £'m £'m
Cash from operations 15 30.5 17.5 105.6
Corporation tax paid (6.5) (8.6) (16.7)
Net cash inflow from operating activities 24.0 8.9 88.9
Cash flows from investing activities
Interest received on bank deposits 5 0.2 ----- 0.2
Purchase of property, plant and equipment 10 (5.1) (5.0) (11.4)
Purchase of intangible assets 9 (2.5) (1.8) (7.0)
Acquisition of subsidiaries net of cash acquired - - (22.5)
Proceeds from disposal of fixed assets - - 0.2
Net cash outflow from investing activities (7.4) (6.8) (40.5)
Cash flows from financing activities
Interest paid 5 (2.8) (3.0) (6.4)
Proceeds from bank borrowings(1) 121.0 196.5 258.5
Repayment of bank borrowings(1) (98.0) (141.2) (228.5)
Other financing costs paid(2) - (1.6) (1.6)
Dividends paid 8 (12.6) (15.6) (19.8)
Shares issued under employee share schemes 0.5 - 0.5
Payment of principal on lease liabilities (17.3) (18.5) (37.6)
Interest in respect of lease liabilities 5 (4.2) (3.7) (8.0)
Net cash inflow/(outflow) from financing activities (13.4) 12.9 (42.9)
Net cash flow for the period 3.2 15.0 5.5
Impact of changes in foreign exchange rates (0.3) (0.2) (0.1)
Net increase in cash and cash equivalents in the period 2.9 14.8 5.4
Cash and cash equivalents at the beginning of the period 16.5 11.1 11.1
Closing cash and cash equivalents 19.4 25.9 16.5
(1) Proceeds and repayments from bank borrowings in FY25 includes the impact
of refinancing completed in April 2024 as explained in note 14. The previous
facilities were repaid in full and new facilities drawn down at the point of
refinancing
(2) Other financing costs paid includes costs incurred directly as a result of
the 2024 refinancing
Notes to the condensed consolidated interim 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
These unaudited condensed consolidated interim financial statements ('interim
financial statements') for the six months ended 31 July 2025 comprise the
Company and its subsidiaries (together referred to as the 'Group'). The
interim financial statements have been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Conduct Authority and the
requirements of IAS 34 Interim Financial Reporting as adopted by the United
Kingdom. The interim report was approved by the Board of Directors on 29
September 2025.
These condensed interim financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006. The
interim financial statements should be read in conjunction with the annual
financial statements for the year ended 31 January 2025 ('Annual Report')
which have been prepared in accordance with UK-adopted international financial
reporting standards (UK IFRS) and applicable law.
The comparative figures for the financial year ended 31 January 2025 are an
extract from the Annual Report and are not the Group's statutory accounts for
that financial year within the meaning of section 434 of the Companies Act
2006. Those accounts have been reported on by the Company's auditor and
delivered to the registrar of companies. The report was (i) unqualified, (ii)
did not contain an emphasis of matter paragraph and (iii) did not contain any
statement under section 498 of the Companies Act 2006. The statutory accounts
for the year ended 31 January 2025 were approved by the Board of Directors on
7 May 2025 and delivered to the Registrar of Companies.
Significant judgements and sources of estimation uncertainty
The preparation of the interim financial statements in accordance with UK IFRS
requires the application of judgement in forming the Group's accounting
policies. It also requires the use of estimates and assumptions that affect
the reported amounts of assets, liabilities, income and expenses. Actual
results may subsequently differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis, with revisions
recognised in the period in which the estimates are revised and in any future
periods affected. Judgements are also reviewed on an ongoing basis to ensure
they remain appropriate.
There were no judgements made in the six months ended 31 July that had a
material effect on the Group's interim financial statements.
The review of estimates and assumptions in the period concluded that the key
sources of estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 31 January 2025 with the
exception of the identification and valuation of intangible assets arising on
the acquisition of Garven Holdings which is not a judgement relevant to this
current period. In each case, estimates were made using a consistent
methodology, with inputs and assumptions updated to reflect the Group's latest
forecasts and prevailing market conditions at 31 July 2025 where appropriate.
As part of this process, the Group maintained assumptions in respect of
inventory provisions where sales data for the six months ended 31 July 2025
indicated a materially consistent provisioning requirement for retail
inventory as at 31 January 2025. Overall, these assumptions in combination
with the movement in gross stock value reduced the value of inventory
provisions by approximately £0.9 million, compared to the provision value as
at 31 January 2025. The total inventory provision for the Group at 31 July
2025 was £7.3 million (see note 12).
Comparative information
The Group provides comparative financial information in these interim
financial statements for both the six months ended 31 July 2024 ('HY25') and
the year ended 31 January 2025 ('FY25'). Where included within text, income
statement comparatives refer to the six months ended 31 July 2024 and balance
sheet comparatives are as at 31 January 2025, unless otherwise stated.
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 resilient financial performance
in the current financial year, with continued growth in sales in spite of
significant inflationary headwinds and positive operating cash generation.
There have been no material events that have adversely affected the Group's
liquidity headroom.
The Group's banking facilities include covenants for a maximum Leverage ratio
(calculated as Net Debt (excluding lease liabilities) 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. At 31 July 2025, Net Debt (excluding lease
liabilities) was £78.9 million and the Group had £25.2 million of undrawn
committed facilities.
The UK Corporate Governance Code 2024 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 issuing these interim
accounts that warrant further consideration.
• The Group performed a review of the scenario analysis performed for its
FY25 Annual Report & Accounts. Performance in the six months ended 31 July
2025 is consistent with the forecasts that underpinned this analysis and
therefore do not consider the analysis to be materially changed.
The Group also conducted a review of the reverse stress test analysis
originally performed for the FY25 Annual Report & Accounts, 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 covenant breach
during the period. Seasonality of the Group's cash flows, with higher
purchases and cash outflows over the summer to build stock for Christmas,
means liquidity headroom is at its lowest in September and October ahead of
the Christmas season.
Updating the reverse stress test analysis to reflect actual performance in the
period to 31 July 2025 demonstrated that the level of sales loss or cost
increase required would still require a significant reduction in sales that
was sustained over a number of months, these scenarios 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.
The Group expects to operate comfortably within these covenant levels for the
foreseeable future. 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.
Principal accounting policies
The interim financial statements have been prepared under the historical cost
convention except for certain assets and liabilities (principally derivative
financial instruments) which are stated at their fair value. The accounting
policies are consistent with those applied in the consolidated financial
statements for the year ended 31 January 2025.
Amended standards and interpretations effective in the period do not have a
material effect on the Group's financial statements.
3 Segmental reporting and revenue
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 sells greeting cards, celebration essentials, and
gifts to consumers through an extensive network of retail stores across high
streets, retail parks and shopping centres in the UK and Republic of Ireland.
· cardfactory Online retails greetings cards, celebration essentials, and
gifts via its online platforms; cardfactory.co.uk and, until its closure on 31
January 2025, gettingpersonal.co.uk.
· Partnerships represents the Group's "B2B" wholesale operations and sells
greeting cards, celebration essentials and gifts across various brands via a
network of third party retail partners both in the UK and overseas.
· Printcraft is a manufacturer of greetings cards and personalised
gifts, and sells the majority of its output intra-group to the Stores and
Online businesses.
The Group acquired SA Greetings on 25 April 2023, Garlanna Holdings Limited on
4 September 2024 and Garven Holdings, LLC on 4 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. EBITDA is considered to be a non-GAAP measure, which is defined and
reconciled to Operating Profit in Note 4. 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 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:
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Revenue:
cardfactory Stores 227.8 221.4 506.8
cardfactory Online 3.2 5.7 13.2
Partnerships 16.5 6.6 22.2
Other 0.1 0.1 0.3
Consolidated Group revenue 247.6 233.8 542.5
Of which derived from customers in the UK 225.6 222.3 509.8
Of which derived from customers overseas 22.0 11.5 32.7
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
EBITDA:
cardfactory Stores 44.0 49.7 131.8
cardfactory Online (1.6) (3.3) (6.3)
Partnerships 0.6 0.7 1.0
Other (3.9) (1.8) 1.0
Consolidated Group EBITDA 39.1 45.3 127.5
Consolidated Group depreciation, amortisation & impairment (24.8) (23.8) (48.1)
Consolidated Group gain/(loss) on disposal 0.2 - (0.1)
Consolidated Group Operating Profit 14.5 21.5 79.3
As described more fully on page 143 of the Group's annual report for FY25, the
table above has been amended from the prior half year to present the Group's
digital platforms; cardfactory.co.uk and, until its closure on 31 January
2025, gettingpersonal.co.uk, as a single operating segment. Segmental
reporting for the period does not include any amounts in respect of
Funkypigeon.com Limited, which was acquired after the balance sheet date on 14
August 2025 (see note 19 for more details). The "Other" rows principally
reflect 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:
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Revenue derived from customers in the UK 225.6 222.3 509.8
Revenue derived from customers overseas 22.0 11.5 32.7
Consolidated revenue 247.6 233.8 542.5
Revenues from customers are allocated to geographical locations based on the
location of the customer to whom the sale is made. Revenue from any individual
country, with the exception of the UK, is not considered to be individually
significant and requiring separate disclosure.
4 EBITDA
Earnings before interest, tax, depreciation, amortisation and impairment
charges (EBITDA) represents profit for the period before net finance expense,
taxation, depreciation, amortisation and impairment of assets.
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Operating profit 14.5 21.5 79.3
Depreciation, amortisation and impairment 24.8 23.8 48.1
Gain on disposal (0.2) - 0.1
EBITDA 39.1 45.3 127.5
5 Net finance expense
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Net finance expense
Interest received (0.2) - (0.2)
Interest on bank loans and overdrafts 2.8 3.0 6.4
Amortisation of debt issue costs 0.2 0.8 1.0
Lease interest 4.2 3.7 8.0
7.0 7.5 15.2
6 Taxation
The tax charge for the six months ended 31 July 2025 has been calculated on
the basis of the estimated effective tax rate on profit before tax for the
full financial year to 31 January 2026, which has been assessed as 25% (HY25:
25%).
The estimated effective tax rate is in line with the standard rate of
corporation tax in the UK applicable for the period (25%). We consider that
although the deductions for capital allowances are likely to be greater than
the equivalent depreciation charge for the period, the impact on the effective
tax rate will not be material.
7 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 share incentive awards
and save as you earn share options.
Six months ended 31 July 2025 Six months ended Year ended 31
31 July 2024 January 2025
(Number) (Number) (Number)
Weighted average number of shares in issue 349,012,771 345,984,119 346,910,019
Weighted average number of dilutive share options 1,026,940 2,413,510 2,295,420
Weighted average number of shares for diluted earnings per share 350,039,711 348,397,629 349,205,439
£'m £'m £'m
Profit for the financial period 5.6 10.5 47.8
pence pence pence
Basic earnings per share(1) 1.6 3.0 13.8
Diluted earnings per share 1.6 3.0 13.7
(1) For calculation of Adjusted earnings per share, based on Adjusted Profit
After Tax which removes the impact of non-underlying transactions, please see
the appendix.
8 Dividends
On 29 September 2025, the Directors resolved to pay an interim dividend of 1.3
pence per share (HY25: interim dividend of 1.2 pence per share). The interim
dividend will be payable to shareholders on the share register on 7 November
2025, with payments to be made on 12 December 2025.
On 27 June 2025, the Group paid a final dividend of 3.6 pence per share
(totalling £12.6 million) in respect of the FY25 financial year. This brought
total dividends paid in respect of FY25 to 4.8 pence per share (totalling
£16.8 million).
In the six months ended 31 July 2025, the Group paid a final dividend of 4.5
pence per share (£15.6 million) in respect of the FY24 financial year. The
FY24 final dividend included an amount in lieu of an interim dividend, with
interim dividends unable to be paid earlier due to restrictions in the Group's
previous financing facilities that remained in place until 31 January 2024.
Dividends paid in the year: Pence per share Six months ended 31 July 2025 £'m Six months ended 31 July 2024 £'m Twelve months ended 31 January 2025 £'m
Total dividend for the year ended 31 January 2024 4.5p - 15.6 15.6
Interim dividend for the year ended 31 January 2025 1.2p - - 4.2
Final dividend for the year ended 31 January 2025 3.6p 12.6 - -
Total dividends paid to shareholders in the year 12.6 15.6 19.8
9 Intangible assets
Goodwill Customer relationships and brands Software Total
£'m £'m £'m £'m
Cost
At 1 February 2025 336.9 12.9 42.0 391.8
Additions - - 2.5 2.5
Transfers - - - -
At 31 July 2025 336.9 12.9 44.5 394.3
Amortisation and impairment
At 1 February 2025 14.4 0.3 20.6 35.3
Amortisation in the period - 0.6 2.0 2.6
Impairment in the period - - - -
At 31 July 2025 14.4 0.9 22.6 37.9
Net book value
At 31 July 2025 322.5 12.0 21.9 356.4
At 31 January 2025 322.5 12.6 21.4 356.5
10 Property, plant and equipment
Freehold property Leasehold improvements Plant, equipment, fixtures & vehicles Total
£'m £'m £'m £'m
Cost
At 1 February 2025 22.7 40.8 106.5 170.0
Additions - - 5.1 5.1
At 31 July 2025 22.7 40.8 111.6 175.1
Depreciation and impairment
At 1 February 2025 5.7 40.4 75.2 121.3
Depreciation in the period 0.2 0.1 4.2 4.5
At 31 July 2025 5.9 40.5 79.4 125.8
Net book value
At 31 July 2025 16.8 0.3 32.2 49.3
At 31 January 2025 17.0 0.4 31.3 48.7
11 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 Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Buildings 115.7 101.7 109.4
Motor Vehicles 1.2 1.0 0.8
116.9 102.7 110.2
The right of use assets movement in the year is as follows:
Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
At the beginning of the period 110.2 99.2 99.2
Acquisitions - - 0.1
Additions:
Buildings 23.8 21.4 47.5
Motor vehicles 0.7 0.3 0.3
Disposals (0.2) (0.5) (1.0)
Depreciation charge:
Buildings (18.1) (17.4) (35.7)
Motor vehicles (0.3) (0.3) (0.6)
Net impairment Reversal 0.7 - 0.4
Effect of foreign exchange rates 0.1 - -
At the end of the period 116.9 102.7 110.2
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.
Lease liabilities Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Current lease liabilities (29.2) (22.1) (21.7)
Non-current lease liabilities (92.2) (81.4) (88.7)
Total lease liabilities (121.4) (103.5) (110.4)
Lease expense Six months ended 31 July 2025 Six months ended 31 July 2024 Year ended 31 January 2025
£'m £'m £'m
Depreciation expense on right of use assets 18.4 17.7 36.3
Impairment reversal of right of use assets (0.7) - (0.4)
Profit on disposal of right of use assets (0.2) - -
Lease interest 4.2 3.7 8.0
Expense relating to variable lease payments - 0.2 0.2
Total lease related income statement expense 21.7 21.6 44.1
12 Inventories
31 July 2025 31 July 2024 31 January 2025
£'m £'m £'m
Finished Goods 67.5 55.5 60.5
Work in progress 0.8 0.9 0.6
68.3 56.4 61.1
Inventories are stated net of provisions totalling £7.3 million (FY25: £8.2
million, HY25: £9.5 million). The cost of inventories recognised as an
expense and charged to cost of sales in the period, net of movements in
provisions, was £83.0 million (FY25: £162.8 million, HY25: £69.8 million).
13 Analysis of Net Debt
Six months ended 31 July 2025 At 1 February 2025 Cash flow Non-cash changes At 31 July 2025
£'m £'m £'m £'m
Secured bank loans and accrued interest (74.0) (20.1) (2.8) (96.9)
Lease liabilities (110.4) 21.5 (32.5) (121.4)
Total debt (184.4) 1.4 (35.3) (218.3)
Debt costs capitalised (1.4) - - (1.4)
Bank overdraft - (0.9) - (0.9)
Cash and cash equivalents 16.5 3.8 - 20.3
Net Debt (169.3) 4.3 (35.3) (200.3)
Lease liabilities 110.4 (21.5) 32.5 121.4
Net Debt excluding lease liabilities (58.9) (17.2) (2.8) (78.9)
Six months ended 31 July 2024 At 1 February 2024 Cash flow Non-cash changes At 31 July 2024
£'m £'m £'m £'m
Secured bank loans and accrued interest (44.8) (53.5) (0.9) (99.2)
Lease liabilities (100.8) 22.2 (24.9) (103.5)
Total debt (145.6) (31.3) (25.8) (202.7)
Debt costs capitalised (0.7) (1.7) 0.8 (1.6)
Bank overdraft (0.2) (0.5) - (0.7)
Cash and cash equivalents 11.3 15.3 - 26.6
Net Debt (135.2) (18.2) (25.0) (178.4)
Lease liabilities 100.8 (22.2) 24.9 103.5
Net Debt excluding lease liabilities (34.4) (40.4) (0.1) (74.9)
Year ended 31 January 2025 At 1 February 2024 Cash flow Non-cash changes At 31 January 2025
£'m £'m £'m £'m
Secured bank loans and accrued interest (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)
Debt costs capitalised (0.7) (1.6) 0.9 (1.4)
Bank overdraft (0.2) 0.2 - -
Cash and cash equivalents 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)
Non-cash changes in respect of lease liabilities reflect changes in the
carrying amount of leases arising from additions, disposals and modifications.
The Group's primary financing facilities, which consist of a £125 million
revolving credit facility, have a maturity date of April 2028, with options to
extend by up to 19 months, subject to lender approval. The facility terms
include a £75 million accordion, which can be drawn subject to lender
approval. £35 million of this accordion has been called, and approved by the
Group's lenders, in August 2025 to fund the acquisition of Funky Pigeon (see
note 19).
The interest margin on the facilities is dependent upon the Group's Leverage
position, with margin between 1.9-2.8%. The facilities include covenants for a
maximum Leverage ratio (calculated as Net Debt excluding lease liabilities)
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 tested semi-annually. The Group expects
to operate comfortably within these covenant levels for the foreseeable
future.
The Group's cash generation profile typically follows a seasonal 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 lead to reduced stock levels and higher cash inflows. As a result, net
debt at the end of both the half year and at the year-end is usually lower
than the intra-year peak, which typically occurs during the third quarter.
14 Financial instruments
Financial instruments carried at fair value are measured by reference to the
following fair value hierarchy:
- Level 1: quoted prices in active markets for identical assets or
liabilities;
- Level 2: inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
- Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
Derivative financial instruments are carried at fair value and measured under
a level 2 valuation method. Valuations are provided by the instrument
counterparty.
For all other financial instruments, the fair value approximates to their
carrying amounts.
31 July 2025 31 July 2024 31 January 2025
£'m £'m £'m
Derivative assets
Non-current
Interest-rate contracts - - -
Foreign exchange contracts 1.3 0.6 0.9
1.3 0.6 0.9
Current
Interest-rate contracts 0.1 0.1 -
Foreign exchange contracts 0.7 0.6 2.4
0.8 0.7 2.4
Derivative liabilities
Current
Interest rate contracts -- -- -
Foreign exchange contracts (2.7) (1.3) (0.3)
(2.7) (1.3) (0.3)
Non-current
Interest rate contracts - - -
Foreign exchange contracts (2.7) (0.8) (0.4)
(2.7) (0.8) (0.4)
Net derivative financial instruments
Interest rate contracts 0.1 0.1 -
Foreign exchange contracts (3.4) (0.9) 2.6
(3.3) (0.8) 2.6
Fair value movements in foreign currency derivatives are recognised in other
comprehensive income to the extent the contract is part of an effective
hedging relationship as defined by IFRS 9. The fair value movements of £3.4
million that do not meet these criteria have been charged to the income
statement (HY25: £0.1 million) within cost of sales.
Changes in the fair value of foreign exchange contracts have been more
volatile in the period since 31 July 2024, reflecting increased volatility in
GBPUSD exchange rates.
The Group considers that fair value movements on derivative contracts
recognised in the income statement do not reflect the underlying trading
performance of the Group in that period, given the fair value movements are
attributable to contracts that will settle and be used for stock purchases in
future periods. The Group considers such contracts to be commercial hedges,
even if they do not meet the criteria of IFRS 9 to qualify for hedge
accounting, and as a result they are removed from Adjusted Profit Before Tax.
Adjusted Profit Before Tax and all other alternative performance measures are
defined and reconciled in the appendix to these financial statements.
15 Notes to the cash flow statement
Reconciliation of operating profit to cash generated from operations:
31 July 2025 31 July 2024 31 January 2025
£'m £'m £'m
Profit before tax 7.5 14.0 64.1
Net finance expense 7.0 7.5 15.2
Operating profit 14.5 21.5 79.3
Adjusted for:
Depreciation and amortisation 25.5 24.3 48.5
Reversal of Impairment of right of use assets (0.7) (0.5) (0.4)
Impairment of tangible assets - - -
Impairment of intangible assets - - -
Gain on disposal of right of use assets (0.2) - -
Cash flow hedging foreign currency movements 3.8 (0.1) (1.9)
Unrealised foreign exchange (gains)/losses (0.6) - (0.1)
Share-based payments charge 1.2 1.5 2.3
Operating cash flows before changes in working capital 43.5 46.7 127.7
(Increase)/Decrease in receivables (1.9) (14.8) (3.3)
(Increase) in inventories (3.5) (6.5) (11.2)
(Decrease) in payables (6.4) (4.6) (4.1)
Movement in provisions (1.2) (3.3) (3.5)
Cash from Operations 30.5 17.5 105.6
16 Provisions
Six months ended 31 July 2025 Covid-19-related support Property Provision Restructuring provision Total
£'m £'m £'m £'m
At 1 February 2025 2.1 2.1 1.2 5.4
Provisions utilised during the period - 0.3 (1.2) (0.9)
Provisions provided during the period - (0.3) - (0.3)
At 31 July 2025 2.1 2.1 - 4.2
Six months ended 31 July 2024 Covid-19-related support Property Provision Restructuring provision Total
£'m £'m £'m £'m
At 1 February 2024 5.4 2.1 - 7.5
Provisions utilised during the period (3.2) - - (3.2)
Provisions released during the period - 0.1 - 0.1
Provisions provided during the period - (0.2) - (0.2)
At 31 July 2024 2.2 2.0 - 4.2
Year ended 31 January 2025 Covid-19-related support Property Provision Restructuring provision Total
£'m £'m £'m £'m
At 1 February 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 Coronavirus Job Retention Scheme, 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 July 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.
One-off costs relating to a restructuring programme associated with the closure of the Getting Personal website and streamlining central support operations fully utilised during the first half of the year.
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.
17 Principal risks and uncertainties
The principal risks and uncertainties facing the Group are materially
unchanged since the publication of the Annual Report (as published and
explained in more detail on pages 69 to 74 of the Group's Annual Report for
the year ended 31 January 2025) and are set out below for each category of
risk.
Financial Risks:
- Geopolitical Instability
- Cost price inflation
Operational Risks:
- IT Infrastructure and risk of IT/security disruption
- Business continuity
- Cyber
- Supply Chain
- Regulatory compliance
Strategic Risks:
- ESG Compliance and climate change risks
- Loss of position as leading value specialty retailer for cards
18 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 consolidated.
A full listing of the Group's subsidiary undertakings is provided in the 2025
Annual Report and Accounts.
Since 31 January 2025, the Group has added a new subsidiary funkypigeon.com
Limited. The Group owns 100% of this entity.
The key management personnel of the Group comprise the Card Factory plc Board
of Directors, the Executive Board and the Senior Leadership Team. Disclosures
relating to remuneration of key management personnel are included in note 5 of
the 2025 Annual Report and Accounts financial statements. Further details of
Directors' remuneration are set out in the Directors' Remuneration Report of
the Annual Report and Accounts on pages 102 to 114. Directors of the Company
and their immediate families control 0.2% of the ordinary shares of the
Company.
There were no other related party transactions in the period.
19 Subsequent Events - Acquisition of Funky Pigeon
On 14 August 2025, the Group completed the acquisition of 100% of the issued
share capital of funkypigeon.com Limited ('Funky Pigeon') from WH Smith PLC
for cash consideration of £24.1 million. The acquired business operates
funkypigeon.com, an established online personalised card and attached gifting
business, which is supported by its standalone team in Bristol and Guernsey.
The acquisition will strengthen the Group's position within the Online card
market accelerating cardfactory's existing digital strategy, providing a
platform for online growth, particularly in the direct-to-recipient card and
attached gifting market. Further operational synergies will be unlocked by
utilising both Funky Pigeon's existing order fulfilment capability in Guernsey
for personalised cards and cardfactory's in-house manufacturing and fulfilment
facility in Baildon, West Yorkshire for card and attached gifting orders.
Given the short period of time between the completion of the acquisition and
these interim financial statements being published, the initial accounting is
incomplete and as such we have not included disclosures concerning the fair
value of net assets acquired and any goodwill or intangible assets to be
recognised. The Group expects to include acquisition disclosures under IFRS 3
as part of its annual report for FY26.
As at 31 July 2025, acquisition-related costs totalling £1.7 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.
Responsibility statement of the Directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as contained in UK-adopted
IFRS;
• the interim management report includes a fair review of the
information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board
Darcy Wilson Rymer
Matthias Seeger
Chief Executive Officer Chief
Financial Officer
Independent review report to Card Factory plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
July 2025 which comprises consolidated income statement, consolidated
statement of comprehensive income, consolidated statement of financial
position, consolidated statement of changes in equity, consolidated cash flow
statement and related notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 July 2025 is not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 (Revised), "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued for use in the
United Kingdom. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2 , the annual financial statements of the group are
prepared in accordance with UK adopted IFRSs. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410 (Revised), however future events or conditions may cause the
entity to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority. In preparing the half-yearly
financial report, the directors are responsible for assessing the company's
ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of the Report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK) 2410 issued by the Financial Reporting
Council and our Engagement Letter dated 18 September 2025. Our work has been
undertaken so that we might state to the Company those matters we are required
to state to it in an independent review report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this report, or for
the conclusions we have formed.
Forvis Mazars LLP
Chartered Accountants
30 Old Bailey
London
EC4M 7AU
Date: 29 September 2025
APPENDIX
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.
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
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 compare gross sales for the current and
comparative period made through the respective online platform.
All LFL measures in this report compare HY26 to HY25, 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.
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
£m £m LFL
£m
Revenue HY26 227.8 3.2 231.0
VAT 44.1 0.7 44.8
Adjustment for Stores not open in both periods (5.5) - (5.5)
LFL Sales HY26 266.4 3.9 270.3
Revenue HY25 221.4 3.7 225.1
VAT 41.8 0.7 42.5
Adjustment for Stores not open in both periods (0.8) - (0.8)
LFL Sales HY25 262.4 4.4 266.8
LFL Sales Growth +1.5% -11.3% +1.3%
Note percentages are calculated based on absolute figures before rounding.
Profitability APMs
Adjusting Items
In calculating 'adjusted' financial performance measures, the Group excludes
the effect of transactions that, in the opinion of the Directors, are either
one-off in nature or are otherwise unreflective of the Group's underlying
trading performance for the period in question ("Adjusting Items"). Adjusted
measures are intended to present a normalised or underlying trading
performance for the Group.
The table below sets out the effect of Adjusting items on the consolidated
income statement in the period.
HY26 HY25
Adjusted Adjusting Items Statutory / Reported Adjusted Adjusting Items Statutory / Reported
£m £m £m £m £m £m
Revenue 247.6 - 247.6 233.8 - 233.8
Cost of sales (170.9) (3.4) (174.3) (157.6) - (157.6)
Gross profit 76.7 (3.4) 73.3 76.2 - 76.2
Operating expenses (56.5) (2.3) (58.8) (54.7) - (54.7)
Operating profit 20.2 (5.7) 14.5 21.5 - 21.5
Net finance costs (7.0) - (7.0) (7.0) (0.5) (7.5)
Profit before tax 13.2 (5.7) 7.5 14.5 (0.5) 14.0
Taxation (3.3) 1.4 (1.9) (3.6) 0.1 (3.5)
Profit for period 9.9 (4.3) 5.6 10.9 (0.4) 10.5
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 HY26 the Directors have identified the following items that they believe to
meet the definition of 'one-off/non-underlying' for this purpose:
· Transaction costs related to the acquisition of Funky Pigeon of £1.7
million (recognised in operating expenses).
· Amortisation charged relating to intangible assets recognised as
a result of the acquisitions of Garven and Garlanna of £0.6 million
(recognised in operating expenses).
· Unrealised fair value losses of £3.4 million on derivative FX
contracts held at 31 July 2025, under which currency will be delivered in
future periods (recognised in cost of sales).
Adjusting Items in HY25 related to £0.5 million of finance costs associated
with the refinancing of the Group's debt facilities, completed in April 2024
(recognised in finance costs). Unrealised fair value gains/losses on
derivative FX contracts in HY25 were negligible.
Taxation on Adjusting Items for interim periods is calculated using the
effective tax rate, which was 25% in both periods presented (see note 6 for
more information in relation to the tax charge calculation for interim
periods).
EBITDA
Closest IFRS Equivalent: Operating Profit(1)
EBITDA is earnings before interest, tax, gains or losses on disposals,
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.
(1) Whilst operating profit is not defined formally in IFRS, it is considered
a generally accepted accounting measure.
Reconciliation of EBITDA to Operating Profit
HY26 HY25
£m £m
Operating Profit 14.5 21.5
Add back:
Depreciation 22.9 22.3
Amortisation 2.6 1.5
Gain on disposal (0.2) -
Impairment reversals (0.7) -
EBITDA 39.1 45.3
Add back unrealised losses on derivative contracts 3.4 -
Add back acquisition related transaction costs 1.7 -
Adjusted EBITDA 44.2 45.3
Adjusted PBT
Closest IFRS Equivalent: Profit Before Tax
Adjusted PBT is Profit Before Tax adjusted to exclude the effect of Adjusting
Items as described above.
Reconciliation of Adjusted PBT to Profit Before Tax
HY26 HY25
£m £m
Profit Before Tax 7.5 14.0
Add back / (Deduct):
Amortisation of acquired intangibles 0.6 -
Unrealised losses on derivative contracts 3.4 -
Acquisition-related transaction costs 1.7 -
Non-recurring refinancing charges - 0.5
Adjusted PBT 13.2 14.5
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 and reconciliation to Basic EPS.
HY26 HY25
Weighted average number of shares in issue (A) 349,012,771 345,984,119
Profit after tax for the period (B) £5.6m £10.5m
Basic EPS (B)/(A) 1.6 pence 3.0 pence
Adjusted PBT £13.2m £14.5m
Effective tax rate 25.0% 25.0%
Tax charge on Adjusted PBT (£3.3m) (£3.6m)
Adjusted Profit for the period (C) £9.9m £10.9m
Adjusted EPS (C) / (A) 2.8 pence 3.1 pence
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
HY26 HY25
£m £m
Current Borrowings 0.9 0.7
Non-Current Borrowings 96.9 99.2
Add back Debt Issue Costs 1.4 1.6
Gross Borrowings 99.2 101.5
Cash (20.3) (26.6)
Net Debt (exc. Leases) 78.9 74.9
Lease Liabilities 121.4 103.5
Net Debt (inc. Leases) 200.3 178.4
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 and
also adds back any transaction costs incurred in acquisitions in line with
definitions within our facility agreement. 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
HY26 HY25
£m £m
Net Debt (as calculated above) (A) 78.9 74.9
EBITDA for H1 (as calculated above) 39.1 45.3
EBITDA for H2 of prior year 82.9 71.5
Add back transaction costs incurred 1.7 -
EBITDA (last 12 months) (B) 123.7 116.8
IFRS 16 depreciation (18.4) (17.7)
IFRS 16 impairment reversal/(charge) 0.7 -
Gains on modification/disposal 0.2 -
IFRS 16 interest (4.2) (3.7)
Rent costs for H2 prior year (22.6) (20.5)
EBITDA less rent costs (C) 79.5 74.9
Leverage (A/B) 0.6x 0.6x
Adjusted Leverage (A/C) 1.0x 0.9x
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
HY26 HY25
£m £m
Cash from Operations 30.5 17.5
EBITDA 39.1 45.3
Operating Cash conversion 78.1% 38.6%
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.
Calculation of Free Cash Flow
HY26 HY25
£m £m
Net cash inflow from operating activities 24.0 8.9
Less:
Capital expenditure (7.6) (6.8)
Lease payments (inc. Interest) (21.5) (22.2)
Net finance costs (2.6) (4.7)
Other non-operating income/(costs) 0.2 (0.1)
Free Cash Flow (7.5) (24.9)
Add back one-off items 1.2 4.9
Adjusted Free Cash Flow (6.3) (20.0)
Adjusted Free Cash Flow excludes the impact of cashflows that are considered
one-off in nature. In HY26, this includes £1.2 million of restructuring costs
paid out after being provided for at 31 January 2025. In HY25, Adjusted Free
Cash Flow excludes total fees of £1.6 million related to the refinancing
completed in April 2024 and £3.3 million related to repayment of Covid grant
funds.
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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