Shares in Card Factory (LSE:CARD) fell 5% in early trading after the retailer of greeting cards and gifts reported a drop in half-year profits, even as it stuck to its full-year guidance.
The group posted a 6% rise in revenue to £248 million for the six months to the end of July, driven by new store openings, resilient like-for-like sales growth of 1.5% and strong seasonal trading around Valentine’s Day and Mother’s Day.
Partnership revenues more than doubled to £16.5 million, helped by overseas expansion and new deals.
However, adjusted pre-tax profit slipped 9% to £13.2 million, reflecting investment in new technology and efficiency measures. Statutory pre-tax profit was down 46% to £7.5 million.
The company also reported weaker online performance, with sales at cardfactory.co.uk down 11%.
Darcy Willson-Rymer, chief executive, said the group had delivered a “resilient first half performance against a challenging retail backdrop” and was well prepared for its peak trading period.
The company completed its £24 million acquisition of Funky Pigeon in August, which it said would accelerate its digital strategy and deliver annual synergies of more than £5 million by 2027.
The interim dividend was lifted by nearly 5% to 1.3p. Net debt edged up to £79 million.
Looking ahead, the group maintained its forecast for mid to high single-digit growth in adjusted pre-tax profit for the full year, with second-half trading expected to be stronger thanks to the Christmas and Halloween seasons.
Peel Hunt said: "There is not a huge amount here that is new, and while the valuation of the shares is lowly, there's no catalyst currently here for them to perform, in our view."
The shares fell 5p to 100.8p.