Prospec­tive div­i­dend yield: 7.5%

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BUD­GET GREET­INGS CARDSto-gifts seller Card Fac­tory is pro­vid­ing a steady stream of pro­gres­sive or­di­nary div­i­dends and spe­cial div­i­dends amid in­clement re­tail con­di­tions.

Card Fac­tory’s pos­i­tive half year up­date (10 Aug) flagged 3.1% like-for-like sales growth, while its ver­ti­cally in­te­grated model al­lows the re­tailer to main­tain strong margins, gen­er­ate oo­dles of cash and keep prices low.

Stock­bro­ker Peel Hunt has up­graded its 12-month price tar­get from 400p to 430p, flag­ging the con­tin­u­ing woes at Clin­tons, Card Fac­tory’s main com­peti­tor, which is shut­ter­ing stores.

Card Fac­tory yields 7.5%, based on Peel Hunt’s year-to-Jan­uary 2018 fore­cast for pre-tax profit of £87.8m (2017: £85.1m) and a 25p div­i­dend (in­clud­ing an ex­pected 15p spe­cial div­i­dend on top of a 10p or­di­nary pay­out), ris­ing to £96m and 26p re­spec­tively for the fi­nan­cial year end­ing Jan­uary 2019. (JC)

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