22-23_Cardsharp.qxp_Layout 1 10/05/2024 11:07 Page 2
cardsharp
The future’s bright… the future’s greeting cards
Inset: Cardsharp is feeling positive about the future of the greeting card industry.
Well how good was that? reflected Cardsharp, after absorbing our number one bricks and mortar retailer, Cardfactory’s, full year set of sparkling financials for the year ending January 31. Cardsharp relished in the good news that bodes well for the greeting card sector as a whole. Cardfactory’s results read like a dream. Group revenue rose by 10% to £510 million on the previous year. Store revenue on a likefor-like basis grew by 7.7%. Full year profit grew to £65 million, an increase of over £13 million over the previous year. The balance sheet has been strengthened, borrowing reduced and even the interest rate on its borrowing has been reduced. A rare occurrence in the current climate of high interest rates. Even Cardfactory.com, its digital arm, which has traditionally under-performed, increased its sales, admittedly by a modest 0.4%, but as Cardsharp reflected, an increase is an increase. And what was another surprise to many, Cardfactory was able to issue a dividend for the first time since pre-Covid. Many analysts had expected that one would not be paid until 2025. It will be interesting to see how the share price responds to the news. Up to now, whatever the good vibes emanating from the Plc, the share price has remained stubbornly
22 PROGRESSIVE GREETINGS WORLDWIDE
Above: The Times online was just one main media to cover IG Design Group’s financials. Above right: Brits enduring love of greeting cards was reflected in Cardfactory’s recent results. Below left: Sparkling results from Cardfactory casts some sunshine on the sector as a whole.
stuck around the 100pence mark. Its ceo, Darcy Willson-Rymer, Cardsharp is sure would have been over the moon with the results. Having taken over the role during the pandemic, when there were doubts about Cardfactory’s future, he has seen the performance soar and the share price more than triple and yet it still looks ridiculously undervalued. It must be doubly satisfying to Darcy given the torrid time he had in his brief tenure at Clintons 15 years ago. Cardsharp also finds it interesting that Cardfactory’s greeting card sales have increased in spite of more of its retailing space now being devoted to gifts at the expense of cards. There is no doubt much of this is as a result of sneaking in subtle price increases and selling more higher priced cards from third party publishers.
Independent greeting card retailers may be wondering how does Cardfactory’s good performance affects them. Surely Cardfactory is a direct competitor. Cardsharp thinks however that having a healthy couple of multiple chains helps maintain the visibility of greeting cards in bricks and mortar, and the vast majority of Cardfactory’s stores are in central shopping centres locations, with their high rents and locations not that attractive to most indies. Weirdly though, these great results garnered little coverage in the business pages of newspapers, and the share price rose by only 10pence to 110pence. Compare that with IG Design Group, our largest manufacturer of greeting cards, wrapping and gift bags, which also released some great figures (but not half as good as Cf’s) around the same time, saw its share price rise by nearly 30% and was secured some prime column inches in the media By contrast, look at the fortunes of Moonpig. A couple of weeks ago, the online retailer endured its worst day of trading in three years, as its private equity part owners, Exponent sold a significant stake at a double-digit discount. Cardsharp noticed that it sold 25 million shares at 160pence a share,