£193m wiped from Card Factory as wage rises hit
RETAILER Card Factory saw more than £193m 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 £93m and £95m as a result – a drop from £98.5m a year before.
The warning caused shares to plunge 20pc, 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 £7m to £8m 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.
Yesterday, it reported a 2.7pc increase in sales in the 11 months to December 31, and a solid performance over Christmas.
Sales from its website grew 3pc 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 0.2pc, or 14.43 points, to close at 7762.94 while the FTSE 250 closed down 0.1pc, or 22.08 points, at 20737.92 points.
Takeaway firm Just Eat powered up the blue-chip index, jumping 4.7pc, or 36.2p, to 803.8p after an upgrade from Barclays.
The bank said it expects Just Eat’s sales to surpass £710m this year thanks to the consolidation of Hungryhouse and the expansion of its logistics business.
Anglo American also soared 3.6pc, 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 2.7pc, 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 2pc on the same period last year.
Foxy Bingo owner GVC Holdings reported record annual revenues of £897m ahead of its £4bn takeover of Ladbrokes. Shares dipped 0.4pc, 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 4.3pc, or 8p, to 196.3p after it said fees were up 12pc for the three months to December 31.
It was largely thanks to its success in continental Europe, where fees grew 19pc.
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 10pc growth in Asia but in the UK fees rose just 1pc.
Meanwhile, a flurry of acquisitions sent outsourcing group
Bunzl higher. The firm jumped 2.2pc, 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 £27m worth of sales in the year to the end of March 2017 while Revco also generated £27m 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 3.8pc, or 9.5p, to 243.5p, as investors took profits off the back of its strong results.
Sales rose 33.4pc to £89.8m in the 18 weeks to December 30, while its shares are up more than 22pc since it listed on the London Stock Exchange in October.