Last close As at 05/08/2026
GBP0.76
▲ 0.50 (0.66%)
Market capitalisation
GBP259m
Research: Consumer
FY26 was a frustrating year as the steady progress on Card Factory’s main strategic drivers – growing market share in gifts and celebration essentials, international partnerships performing in line with expectations and the start of the integration of Funky Pigeon – were more than offset by the UK’s H2 weak trading. Management did a good job of controlling the controllables, which paid off handsomely with a significant improvement in adjusted free cash flow. This enables a further and enhanced share buyback in addition to the progressive annual dividend. Despite the ongoing challenging backdrop in the UK, management believes continued execution of the strategy will lead to profit progress in FY27. The main contributor in absolute terms will likely be the annualisation of Funky Pigeon’s profit, however store expansion and space reallocation opportunities in the UK, as well as further progress in partnerships should play their part too. Management also re-iterated medium-term guidance, with high confidence in the North American opportunity.
| Year end | Revenue (£m) | PBT (£m) | EPS (p) | DPS (p) | P/E (x) | Yield (%) |
|---|---|---|---|---|---|---|
| 1/25 | 542.5 | 66.0 | 14.18 | 4.80 | 4.7 | 7.2 |
| 1/26 | 582.7 | 56.0 | 11.78 | 5.00 | 5.7 | 7.5 |
| 1/27e | 614.4 | 58.2 | 12.76 | 5.20 | 5.2 | 7.8 |
| 1/28e | 639.3 | 63.6 | 15.10 | 5.40 | 4.4 | 8.1 |
All divisions supported FY26’s revenue growth of c 7%, which was helped by the first-time contribution from Funky Pigeon and annualisation of prior-year partnership acquisitions. The main profit delta from FY25 to FY26 was a c £11m drop in Stores adjusted EBITDA, more than offsetting progress in Digital, helped by the elimination of Getting Personal’s losses, and Wholesale partnerships. On the positive side for UK stores, the broadening of the range continued to drive a positive customer response with higher average basket value, and the ‘Simplify & scale’ programme continued to deliver efficiencies. Unfortunately, these were insufficient to offset the weaker footfall. From a cash flow perspective, working capital was neutral versus prior year outflows and capital investment of c £19m was below management’s indicated medium-term range of £20–25m. As a result, there was impressive growth in adjusted cash flow in absolute terms, over 40%, and on a relative basis, to 99% free cash conversion from 58% in FY25. Having completed the prior £5m share buyback, a new £15m earnings accretive share buyback has commenced.
With flat revenue excluding Funky Pigeon in Q127 there is no apparent recovery in trading. Management expects FY27 adjusted EBITDA to be in line with consensus of £54.8–60.5m. We trim our estimates towards the middle of the range, and incorporate a £15m share buyback in both FY27 and FY28.
The valuation is attractive with a prospective P/E multiple towards the low end of its historical range.
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Research: Metals & Mining
Alkane’s Q326 quarterly activities report revealed record quarterly gold production for the second quarter in succession of 45,776oz AuE (183,104oz pa annualised cf unchanged FY26 guidance of 160–175koz) at an AISC of A$2,928oz AuE (cf unchanged FY26 guidance of A$2,600–2,900/oz). All three mines outperformed our prior expectations, with Björkdal, in particular, producing 1,977oz Au (18.9%) above our prior estimate. As a result, we have increased our FY26 EPS estimate by 0.7%, and it now sits towards the top end of the range of expectations for the full year. Note that, if the current price of gold of