Card Factory Reports Resilient H1 2025 Results with Revenue Growth and Funky Pigeon Acquisition

This is a material accelerator for the digital strategy, especially in direct-to-recipient cards and attached gifting. It also opens up data advantages – the plan is to enhance data capture from 24 million unique store customers and leverage that across Funky Pigeon and the wider omnichannel offer.

Outlook and guidance – focus on H2 delivery

Full year expectations are unchanged. Profit remains H2 weighted due to seasonality, timing of investments and inflation mitigation actions. The Board continues to expect mid-to-high single-digit percentage growth in Adjusted PBT in FY26, with strong plans across Halloween and Christmas.

Cost inflation is sizeable – more than £20 million in FY26, including National Living Wage and employer National Insurance increases – but the multi-year ‘Simplify and Scale’ programme is designed to largely offset these pressures. The new till PoS rollout should support store efficiency gains into the second half.

My take – resilient engine, improving toolkit, but execution still key

Positives:

• Top line resilience – +5.9% revenue with LFL store growth in a softer footfall environment.
• Partnerships momentum – both acquired and organic growth are contributing nicely.
• Cash discipline – operating cash flow improved markedly, helping hold leverage in check.
• Strategic clarity – Funky Pigeon meaningfully upgrades the digital route to growth and synergy potential looks tangible.

Watch-outs:

• Margin compression – gross margin down 3.0ppts, reflecting mix and FX. That narrative likely persists as mix broadens.
• Statutory vs adjusted gap – non-cash FX derivative losses make statutory optics tough; investors should understand the distinction, but the gap can still spook the market.
• H2 execution risk – guidance leans on a strong festive season and delivery of efficiency gains.
• Cost headwinds – wage and NIC increases remain a drag, even with mitigations.

What I am watching next

• Halloween and Christmas performance against plan, including premium card and roll-wrap value propositions.
• Early integration milestones and synergy delivery cadence at Funky Pigeon.
• Partnerships growth outside the UK – progress in the US trial, Australia rollout via third party logistics, and New Zealand opportunity.
• Store estate productivity post PoS upgrade and further labour efficiency gains.

Key operational highlights worth noting

• Store LFL +1.5% and total store sales +2.9% with 13 net new stores in H1.
• Partnerships revenue £16.5m versus £6.6m – with Garven and Garlanna contributing £9.8m.
• cardfactory.co.uk LFL -11.3% as the mix shifts to higher margin orders.
• Basket values up +4.1%; premium card range broadened to attract more affluent shoppers while keeping value.
• Stationery +20% LFL, baby gifts +28% and party tableware +23% growth highlighted in H1.

Housekeeping – dividend and webcast

• Interim dividend: 1.3p per share. Record date 7 November 2025. Payment 12 December 2025.
• Analyst and investor webcast: 10am today – register at https://storm-virtual-uk.zoom.us/webinar/register/WN\_rDIgvN4MQQeJhSxSczKvuw
• Materials will be available at the investor site: www.cardfactoryinvestors.com

Bottom line

This is a sensible H1 in a tricky retail backdrop. Stores ticked over, partnerships accelerated, and cash generation improved. Margins are the pressure point, but Card Factory is investing smartly to unlock efficiency and building a more scalable digital platform via Funky Pigeon. The stage is set for a pivotal H2 – now it is all about flawless execution through Halloween and Christmas.