Last close As at 29/09/2026
GBP0.78
▲ 5.20 (7.15%)
Market capitalisation
GBP258m
Research: Consumer
Card Factory’s H127 results and current trading update provide welcome signs of better momentum after a difficult period for UK trading. While the consumer backdrop remains challenging, better execution and cost control have improved the profitability of the core store business, with more recent trading suggesting the actions taken to improve the customer proposition are gaining traction. At the same time, the strategy to broaden beyond its traditional UK card market continues to progress, with encouraging early performance from party products, continued growth in international and wholesale, and the Funky Pigeon integration on track. There remains plenty to deliver through the all-important peak trading period; however, management is confident in meeting full-year consensus estimates.
| Year end | Revenue (£m) | PBT (£m) | EPS (p) | DPS (p) | P/E (x) | Yield (%) |
|---|---|---|---|---|---|---|
| 1/25 | 542.5 | 66.0 | 14.18 | 4.80 | 5.5 | 6.2 |
| 1/26 | 582.7 | 56.0 | 11.78 | 5.00 | 6.6 | 6.4 |
| 1/27e | 614.4 | 58.2 | 12.76 | 5.20 | 6.1 | 6.7 |
| 1/28e | 639.3 | 63.6 | 15.10 | 5.40 | 5.2 | 6.9 |
Group revenue increased c 5%, primarily reflecting the acquisition of Funky Pigeon and continued wholesale growth. Store revenue declined by 0.7%, with UK like-for-like sales declining by 2.3% as weak consumer confidence and footfall weighed on transaction numbers. Management continues to increase average basket values with product newness alongside early encouraging results from a multi-year test-and-learn store segmentation programme. Encouragingly, higher product margin and efficiencies led to higher store profitability despite the weaker top line. The Republic of Ireland stores performed well with a like-for-like sales increase of 5.6%, and wholesale grew revenue by 13.6%. Adjusted PBT of £12.7m compares with H126’s £13.2m as improved store profitability was offset by investment in digital. FY27 is viewed as a year of integration and transition, and international growth. A highlight of the results was the £7.1m improvement in adjusted cash flow to £0.8m, a strong outcome for the typical seasonally cash-consuming first half. With respect to shareholder returns, the interim dividend was increased to 1.4p/share (1.3p/share in H126) and the company has already completed 83% of the £15m share buyback.
Management has reiterated confidence in meeting consensus FY27 adjusted PBT expectations, with a company-compiled consensus of £54–59m and an average of £56.7m. The improving UK l-f-l trajectory since the period end is supportive, while H2 should benefit from the broader and refreshed products, an easier comparative, targeted value investments and the remaining ‘Simplify & Scale’ efficiencies, helping to offset 3–4% cost inflation. We make no changes to our estimates.
The prospective FY27 EV/sales multiple (excluding lease liabilities) of 0.56x compares with the company’s historic low multiple of 0.49x from FY26. The prospective dividend yield compares favourably with the long-term average of 5.9%.
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United Kingdom
Research: Healthcare
Starpharma is a biotechnology company specialised in targeted oncology, underpinned by its proprietary, clinically established dendrimer enhanced product (DEP) platform. The investment case combines two approaches to value creation: retaining more favourable economics through internally developed targeted oncology assets, while partnered programmes broaden DEP’s reach, validate the platform and generate non-dilutive economics. We see particular value in DEP’s applicability across therapeutic modalities where tumour delivery, retention, pharmacokinetics and off-target toxicity remain key constraints. Phase I-ready lead asset DEP HER2-Lu provides the nearest-term clinical proof point, supported by encouraging preclinical data. Partner-ready Phase II assets and collaborations with Genentech, Radiopharm Theranostics and Medicxi/Petalion provide additional optionality, while the A$32m raise extends the cash runway into FY28. We initiate coverage with a valuation of A$569.3m or A$1.19/share.