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Card Factory is the UK’s leading specialist retailer of greeting cards. The Group’s key focus is to produce a wide range of quality cards and products at exceptional value. Card Factory customers can shop through the nationwide chain of over 800 stores, as well as the company’s online offerings, which sells a selection of products available in Card Factory stores, and for personalised cards and gifts.

Card Factory plc  Preliminary results for the year ended 31 January 2017
Another record year; 7.1% increase in total ordinary dividend
Card Factory, the UK's leading specialist retailer of greeting cards, dressings and gifts, announces its preliminary results for the year ended 31 January 2017.

FY17 FY16 Change Revenue
Card Factory like-for-like growth
Store like-for-like growth £398.2m +0.6% +0.4% £381.6m +3.0% +2.8% +4.3%
Underlying EBITDA* £98.5m £95.0m +3.8%
Underlying operating profit* £87.8m £85.3m +3.0%
Operating profit £85.7m £88.9m -3.7%
Underlying profit before tax* £85.1m £82.0m +3.8%
Profit before tax £82.8m £83.7m -1.1%
Underlying basic earnings per share* 19.8p 19.1p +3.8%
Basic earnings per share 19.3p 19.5p -1.1%
Final dividend per share 6.3p 6.0p +5.0%
Total ordinary dividend per share 9.1p 8.5p +7.1%
Special dividend 15.0p 15.0p - 
* Excludes non-underlying items, in particular costs relating to debt refinancing (FY16 only) and mark-to-market movements on derivatives not designated as a hedging relationship (see note 1 of the attached preliminary results).  See note 4 of the attached preliminary results for definition of EBITDA.

·      Further progress on all four pillars of growth strategy:

1.   Like-for-like sales growth in existing stores

·      Further improvements in quality and range of both card and non-card products

·      Ongoing market share gains as new store openings mature

2.   Continuing new store roll out

·      51 net new stores opened in the period, bringing total estate to 865 at year end

·      Strong pipeline of further new store opportunities for FY18

3.   Delivering business efficiencies
·      Industry-leading underlying EBITDA margins maintained at 24.7% (FY16: 24.9%),
·      Business efficiency initiatives underway to provide partial mitigation of margin headwinds, in particular foreign exchange and national living wage

4.   Development of complementary online sales channels
· remains a relatively small and profitable part of the group but financial performance disappointing.  Plans in place to return to profitable growth following recruitment of a new senior team
·      Solid sales growth of c50% from despite strong prior year comparatives
·      Year-end leverage of 1.38 times, in lower half of the target range of 1 to 2 times underlying EBITDA.  Leverage is calculated as the ratio of net debt to underlying EBITDA for the previous 12 months.
·      Strong returns to shareholders with total ordinary dividend up 7.1% at 9.1p per share (FY16: 8.5p), and special dividend of 15.0p per share paid in November 2016

·      Further return of surplus cash currently expected to be made towards end of FY18 financial year
Karen Hubbard, Chief Executive Officer, commented:

"Having joined the Group just over a year ago, I have undertaken a detailed strategic review of the business and I am confident that our existing, proven four pillar strategy is the right one to ensure future business growth.  However, with the benefit of fresh eyes, I believe that within the four pillars there are additional opportunities to further strengthen the business for the longer term, and these will be prioritised in the year ahead.

"Over the last year, it is that established strategy which has allowed us to deliver a good performance in a challenging retail market.  Our store LFL sales remained positive and our business continued to deliver best-in-class margins whilst remaining highly cash generative, allowing another 15p special dividend to be paid to shareholders in 2016.

"Whilst the new financial year is only two months old and seasonal sales patterns are distorted by Easter and Mother's Day falling three weeks later than last year, we are pleased with everyday like-for-like sales in the year to date.  I look forward to providing a further trading update at our AGM in May."


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