Card Factory shares dropped 18.4% after revealing a 43% decline in half-year profits, pressured by rising living wage costs despite a revenue increase.
Mark Rogers
September 24, 2024
Card Factory (LSE: CARD) shares have taken a heavy hit today, plunging 18.4% to 116.60 pence after the company revealed a 43% drop in half-year profits. For the six months ending June 30, revenue ticked up 5.9% to £233.8 million, but pretax profit took a nosedive from £24.7 million to £14.0 million.
The culprit? The substantial increase in the national living wage, which has exerted pressure on margins. In April, the national living wage surged 9.8% to £11.44 per hour for workers aged 21 and above, a significant jump from £10.42 last year.
Despite the profit downturn, the firm declared an interim dividend of 1.20 pence, a step up from the previous year. Chief Executive Officer Darcy Willson-Rymer noted that strong performance in their expanding store estate, particularly in gifts and celebration essentials, remains a core driver of revenue growth.
Looking ahead, Card Factory is eyeing the critical Christmas trading period with an unchanged outlook for the full year. The focus remains on navigating inflationary pressures while capitalising on its robust balance sheet and strong cash flow. With a commitment to efficiency and productivity, Card Factory is determined to deliver quality and value to a broad customer base.
September 24, 2024
Card Factory (LSE: CARD) shares have taken a heavy hit today, plunging 18.4% to 116.60 pence after the company revealed a 43% drop in half-year profits. For the six months ending June 30, revenue ticked up 5.9% to £233.8 million, but pretax profit took a nosedive from £24.7 million to £14.0 million.
The culprit? The substantial increase in the national living wage, which has exerted pressure on margins. In April, the national living wage surged 9.8% to £11.44 per hour for workers aged 21 and above, a significant jump from £10.42 last year.
Despite the profit downturn, the firm declared an interim dividend of 1.20 pence, a step up from the previous year. Chief Executive Officer Darcy Willson-Rymer noted that strong performance in their expanding store estate, particularly in gifts and celebration essentials, remains a core driver of revenue growth.
Looking ahead, Card Factory is eyeing the critical Christmas trading period with an unchanged outlook for the full year. The focus remains on navigating inflationary pressures while capitalising on its robust balance sheet and strong cash flow. With a commitment to efficiency and productivity, Card Factory is determined to deliver quality and value to a broad customer base.
No comments:
Post a Comment