Gifts Today magazine

Card Factory announces a trading update for the six months ended 31 July 2015

The Group remains highly cash generative, driven by its strong operating margins, limited working capital absorption and the relatively low capital expenditure requirements of its expansion programme.

As at 31 July 2015, before deduction of capitalised debt costs, net debt totalled £109.0 million (31 July 2014: £146.7 million). The expected increase in this balance from the equivalent figure of £91.9 million reported at the end of Q1 reflects strong ongoing cash generation during the period offset by the June payment of FY15 dividends totalling £23.2 million and the start of the normal working capital outflow relating to Christmas stock build.
As previously stated, and in line with our capital policy, the Board expects to announce a return of surplus capital at the time of the interim results. Details will be provided at that time.

In anticipation of this proposed cash return, we have recently amended and extended our existing £200 million debt facility. This facility, put in place prior to IPO last year, consisted of a 5 year, £180 million senior debt facility and a £20 million revolving credit facility (“RCF”). The new 5 year facility agreement consists of a £200 million RCF, thereby providing greater flexibility and balance sheet efficiency.

The new facility also includes an additional £100m accordion. As part of this refinancing process, the margin payable under the new facility has reduced by between 0.25% and 0.75%, depending on the leverage within the Group. At current leverage, the new facility carries a rate of LIBOR +1.00% compared to a rate of LIBOR +1.75% payable under the previous facility.

Richard Hayes, Card Factory’s Chief Executive Officer, said: “It is pleasing to report that the Group traded well in the first half of the current financial year with good growth continuing from the existing store estate and new store roll out programme, as well as our developing online proposition. We were delighted to open our 800th Card Factory store in Reading, and to relaunch an enhanced transactional Card Factory website.

“We remain confident of our ability to continue to increase market share whilst delivering on all four pillars of our growth strategy.”

Card Factory’s results for the six months to 31 July 2015 will be announced on 22 September 2015.

Card Factory's website can be accessed by clicking here.

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