Card Factory Plc · LSE:CARD
Card Factory — H1 FY2017 Earnings Presentation
22 slides from Card Factory's earnings presentation, Sep 27, 2016
Slide 1: Interim results presentation: 6 months ended 31 July 2016
Compare the quality…….Compare the price Interim results presentation 6 months ended 31 July 2016 27 September 2016
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, and businesses of Card Factory plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depe
Slide 3: Agenda
Agenda Introduction Geoff Cooper (Chairman) Financial review Darren Bryant (CFO) Business update Karen Hubbard (CEO) Questions 3
Slide 4: Introduction
Compare the quality…….Compare the price Introduction Geoff Cooper Chairman
Slide 5: Financial review
Compare the quality…….Compare the price Financial review Darren Bryant Chief Financial Officer
Slide 6: Financial highlights
Financial highlights Year-on-year H1 FY17 H1 FY16 change Revenue £169.2m £161.4m +4.8% Card Factory LFLs +0.2% +2.8% EBITDA £34.2m £32.5m +5.1% Margin 20.2% 20.1% +0.1ppts Operating profit £29.0m £27.8m +4.1% Margin 17.1% 17.3% -0.2ppts Profit before tax £27.6m £25.7m +7.3% Effective tax rate 20.4%
Slide 7: Divisional analysis
Divisional analysis Year-on-year H1 FY17 H1 FY16 change Revenue £162.3m £154.5m +5.1% EBITDA £33.2m £31.2m +6.3% Margin 20.5% 20.2% +0.3ppts Revenue £6.9m £6.9m +0.2% EBITDA £1.0m £1.3m -24.0% Margin 13.9% 18.3% -4.4ppts Notes All figures shown on an underlying basis 7
Slide 8: Best-in-class margins
Best-in-class margins H1 FY17 Sales to EBITDA Bridge H1 FY16 Sales to EBITDA Bridge Cost of sales Cost of sales £121.4m £115.6m 71.7% 71.6% £32.5m £34.2m 20.1% 20.2% £50.7m £51.3m 30.3% 31.4% £13.3m £13.6m 8.3% 8.1% £8.3m £7.8m 4.9% 4.9% £30.5m £27.5m £31.3m 18.0% £29.6m 17.0% 18.5% 18.3% Cost of go
Slide 9: Strong cash generation
Strong cash generation H1 FY17 H1 FY16 £’m £’m Cash inflow from operating activities 37.9 32.8 Corporation tax (8.8) (5.4) Net cash inflow from operating activities 29.1 27.4 Cash outflow from investing activities Capital expenditure (see over) (5.6) (6.2) Deferred consideration - (0.8) Interest rec
Slide 10: Capex
Capex Low, predictable and well controlled Total capex includes: H1 FY17 H1 FY16 £’m £’m – Recurring annual capex One-off strategic projects - Maintenance and roll-out Getting Personal relocation - 0.2 - c£7-8m pa Digital print 1.0 - – One-off strategic projects EPOS 0.8 2.1 Sub-total 1.8 2.3 Di
Slide 11: Dividends
Dividends Interim ordinary dividend Dividends (pence) – 2.8 pence per share – Increase of 12.0% from H1 FY16 interim – Payable on 25 November Special dividend – 15 pence per share 15.0 – Total cash return of £51.1m from organic cash generation – Payable on 25 November 15.0 Total cash returns s
Slide 12: Financial performance
Financial performance Summary Solid revenue growth Strong profit margins - Good average spend increases - Cost control culture - Variable general footfall trends - Business efficiencies - New store roll out - Margin headwinds, particularly - Online development FX post referendum Strong cash generati
Slide 13: Business update
Compare the quality…….Compare the price Business update Karen Hubbard Chief Executive Officer
Slide 14: My views on the business
My views on the business What do I like? Great team Design Studio & Clear strategic right across the Printcraft framework business Vertical Integration An exciting market Opportunities to A company capable of place - with space to drive further going from Good to grow! sales & profit growth GREAT !
Slide 15: Like-for-like sales growth
Like-for-like sales growth Softer and variable footfall in H1 resulted in lower than expected LFL at +0.2% Continued growth in average spend New ranges of Card & Non-card products performing well Card Factory online business continues to grow Space – optimisation and improved ranging Peo
Slide 16: New store roll out
New store roll out Ongoing openings against established competitors, large and small, in new locations FY17 FY16 Store numbers H1 H1 Strong pipeline for remainder of FY17 At start of period 814 764 – On target for c 50 net openings New store openings 36 42 – Well established track record of deli
Slide 17: New store roll out
New store roll out Update Roll out of stores across multiple location types Traditional high streets and shopping centres Increasing exposure to retail parks Optimising stores based on location 17
Slide 18: Business efficiencies
Business efficiencies Consistently strong margins maintained Industry leading EBITDA margins at 20.2% (H1 FY16 20.1%) Strong culture of cost control and economies of scale Various business efficiency initiatives underway – LED lighting conversion – Loss Prevention – Investment in Buying functi
Slide 19: Online update & development
Online update & development Strategic review of the online businesses reinforces significant upside sales opportunity for both of our online businesses Potential to unlock incremental sales performance & profitability with two distinct separate online teams: – cardfactory.co.uk & gettingpersonal
Slide 20: Immediate priorities & opportunities
Immediate priorities & opportunities Continued new space Optimisation of ranging Product & programme – & utilisation of space pricing opportunities reflecting where & how through Buying team in store our customers shop Ongoing development of online – Extended programme Investment in people through t
Slide 21: Summary
Summary Solid H1 results Potential for growth remains exciting Trading patterns in recent weeks broadly unchanged Well set for important Christmas quarter Confident of delivering underlying PBT within range of current expectations “We remain as convinced as ever of the strong growth prospe
Slide 22: Questions
Compare the quality…….Compare the price Questions