MARKET REPORT: Card Factory slumps after profit warning

Retailer Card Factory saw more than £193million knocked off its value after issuing its second profit warning in four months.

It had experienced increased pressure in its cards business and its yearly earnings will be in the range of £93million and £95million as a result – a drop from £98.5million a year before.

The warning caused shares to plunge 20 per cent, or 56.6p, to 225.8p.

Card Factory, which specialises in greeting cards, wrapping paper and gifts, said the weak pound and higher wage costs had hurt its bottom line. It now expects to book an extra £7million to £8million in costs for the full-year.

The update followed a similar warning in September, when it said the rising minimum wage and the pound’s fall hit earnings.

Card Factory said it had experienced increased pressure in its cards business and its yearly earnings will be in the range of £93m and £95m as a result – a drop from £98.5m a year before

Card Factory said it had experienced increased pressure in its cards business and its yearly earnings will be in the range of £93m and £95m as a result – a drop from £98.5m a year before

Card Factory said it had experienced increased pressure in its cards business and its yearly earnings will be in the range of £93m and £95m as a result – a drop from £98.5m a year before

Yesterday, it reported a 2.7 per cent increase in sales in the 11 months to December 31, and a solid performance over Christmas.

Sales from its website grew 3 per cent in the 11 months but trading on its personalised gifts site was ‘disappointing’ and broadly flat.

The FTSE 100 finished at yet another record high, increasing by 0.2 per cent, or 14.43 points, to close at 7762.94 while the FTSE 250 closed down 0.1 per cent, or 22.08 points, at 20737.92 points.

Takeaway firm Just Eat powered up the blue-chip index, jumping 4.7 per cent, or 36.2p, to 803.8p after an upgrade from Barclays.

The bank said it expects Just Eat’s sales to surpass £710million this year thanks to the consolidation of Hungryhouse and the expansion of its logistics business.

STOCK WATCH – GAME DIGITAL 

Strong sales of Nintendo Switch consoles failed to stop shares in Game Digital falling.

The video game retailer dropped 6 per cent, or 3.6p, to 56.8p after revealing margins in its hardware business, which includes consoles, had fallen due to the lack of flexibility on pricing from manufacturers.

Between November 1 and January 6, sales rose 5.2 per cent – the UK contributing 2.9 per cent.

The group, in which Mike Ashley’s Sports Direct is a major investor, has identified £4million of savings in the UK.

Anglo American also soared 3.6 per cent, or 60.6p, to 1761p after Morgan Stanley upgraded its rating and raised its target price for the stock to 1900p from 1600p.

Barratt Developments fell 2.7 per cent, or 17.2p, to 617p despite a steady half-year update as housebuilders remained out of favour.

It sold 7,324 new homes in the first six months of the financial year, up 2 per cent on the same period last year.

Foxy Bingo owner GVC Holdings reported record annual revenues of £897m ahead of its £4billion takeover of Ladbrokes. Shares dipped 0.4 per cent, or 3.5p, to 955p.

Hays was a big riser, after strong demand across Europe helped lift it to double-digit growth. 

The FTSE 250 firm, which is Britain’s biggest recruitment company, jumped 4.3 per cent, or 8p, to 196.3p after it said fees were up 12 per cent for the three months to December 31.

It was largely thanks to its success in continental Europe, where fees grew 19 per cent.

Paul Venables, the company’s chief financial officer, said there was a boom for recruiters in Germany. 

He added: ‘It’s our biggest business now and we are the largest operator there as well.’ Hays reported 10 per cent growth in Asia but in the UK fees rose just 1 per cent.

Meanwhile, a flurry of acquisitions sent outsourcing group Bunzl higher.

The firm jumped 2.2 per cent, or 45p, to 2050p after snapping up catering equipment supplier Aggora and the Californian workplace safety equipment manufacturer Revco.

Bunzl did not disclose the terms of the deal but said Aggora generated £27million worth of sales in the year to the end of March 2017 while Revco also generated £27million in sales last year.

It added that its expects to benefit from President Donald Trump’s changes to tax rates.

Booming Christmas sales failed to stop shoe firm Footasylum slipping. It dropped 3.8 per cent, or 9.5p, to 243.5p, as investors took profits off the back of its strong results.

Sales rose 33.4 per cent to £89.8million in the 18 weeks to December 30, while its shares are up more than 22 per cent since it listed on the London Stock Exchange in October.

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