Card Factory (LSE:CARD) fell almost 19% on Tuesday after reporting first-half profit tumbled on the back of a rise in the UK’s national living wage.
Adjusted pre-tax profit fell by 34% to £14.5 million over the six months to July, Card Factory (LSE:CARD) said on Tuesday.
This was attributed to “substantial increases” in the living wage, which was hiked by almost 10% earlier this year to £11.44 an hour for adults, alongside higher freight costs.
Card Factory (LSE:CARD) pointed to plans to boost productivity and efficiency over the rest of the year, adding these would be second-half weighted.
Revenue ticked up 6% to £233.8 million, driven by growth in gift and celebration product sales.
“As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business,” chief executive Darcy Willson-Rymer said.
Net debt also climbed by 4% to £74.9 million, in part due to £15.5 million worth of dividend payments from last year, with a 1.2p per share reward being unveiled for the half year.
Shares slumped 18.9% on the news.