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Card Manufacturing facility (LSE:CARD) is a probably neglected FTSE inventory. It’s the UK’s main specialist retailer of greeting playing cards and celebration necessities — not notably attractive stuff.
Curiously, the inventory has carried out fairly properly because the pandemic. Whereas it’s down round 66% over 10 years, the shares are up 223% over 5 years. It’s a blended image, however the inventory we see right this moment might curiosity some traders.
Let’s take a more in-depth look.
Optimistic momentum
Card Manufacturing facility’s outcomes for the yr ended January 2025 gave additional proof of the corporate’s operational momentum. Revenues rose by 6.2% to £542.5m, pushed by a 5.8% enhance in complete retailer gross sales. Like-for-like (LFL) gross sales grew by 3.4%, outpacing a lot of the broader retail sector.
In the meantime, adjusted revenue earlier than tax climbed 6.3% to £66m, reflecting the advantages of a rising retailer property and ongoing enlargement into the items and celebration necessities classes.
Reflecting on the yr, the corporate’s administration highlighted the profitable execution of its “Opening Our New Future” technique. This contains focused acquisitions in Eire and the US, in addition to new partnerships to broaden worldwide attain.
CEO Darcy Willson-Rymer famous that momentum has continued into monetary yr 2026 and reaffirmed confidence in delivering mid-to-high single-digit revenue development. This will probably be supported by ongoing productiveness and effectivity initiatives.
Valuation is compelling
In an more and more sizzling market, it’s good to search out pockets of worth. And Card Manufacturing facility’s valuation actually seems engaging.
The shares presently commerce on a ahead price-to-earnings (P/E) ratio of simply 6.2 for 2026, falling additional to five.9 for 2027, primarily based on consensus forecasts. That is properly under the long-term common for the sector, suggesting the market has but to completely worth within the firm’s restoration and development prospects.
Dividend prospects are additionally brightening. The ahead dividend yield is forecast to rise from 5.1% this yr to just about 6.6% by 2027. The payout ratio stays comfortably under 40% all through.
Internet debt, excluding leases, rose to £58.9m within the monetary yr 2025, however leverage stays manageable at 0.7 occasions earnings earlier than curiosity, tax, depreciation, and amortisation. Money technology stays sturdy, with working money move of £105.6m. This could help dividends and debt repayments.
It’s not all blue skies
Regardless of these positives, traders must be aware of a number of dangers. Card Manufacturing facility’s enterprise stays closely store-based, with solely modest development in its on-line platform final yr. As client behaviour, normally, continues to shift in the direction of digital channels, the corporate might face challenges if it fails to speed up its e-commerce technique.
Moreover, rising nationwide insurance coverage and minimal wage prices might additional strain margins, as wage bills already signify a good portion of general prices.
Nevertheless, it’s a inventory I’m going to think about investing in. I actually haven’t made my thoughts up but, however its low valuation, stable revenue development, and enhancing dividend yield make it an intriguing prospect for worth and earnings investing. With manageable debt and a transparent development technique, the shares might ship blissful returns.
