16
May 2024
Card Factory
plc
Annual Financial Report and
Notice of AGM
Card Factory plc ("cardfactory" or
the "Company") announces that it has published its Annual Report
and Accounts for the year ended 31 January 2024 and Notice of the
Company's 2024 Annual General Meeting.
The Annual General Meeting is to be
held at the Company's registered office, at Century House, Brunel
Road, Wakefield 41 Industrial Estate, Wakefield, WF2 0XG at 11.00
a.m. on Thursday 20 June 2024.
Copies of the documents listed below
(or notifications of electronic access to these documents) have
been posted to shareholders on Wednesday 15 May 2024:
1.
Annual Report and Accounts 2024;
2.
Notice of 2024 Annual General Meeting; and
3.
Form of Proxy for the 2024 Annual General Meeting.
The Annual Report and Accounts; the
Notice of the 2024 Annual General Meeting and the proposed rules of
the Card Factory Long Term Incentive Plan and the proposed rules of
the Card Factory plc Save As You Earn Scheme are accessible via the
Company's investor relations website www.cardfactoryinvestors.com.
In compliance with LR 9.6.1, the Company has submitted electronic
copies of the above documents to the National Storage Mechanism
appointed by the Financial Conduct Authority and these will shortly
be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
cardfactory's preliminary results
announcement on 30 April 2024 (which is available via the Company's
investor relations website referred to above) included, in addition
to the preliminary financial results for the year ended 31 January
2024, information on important events that occurred during the year
and their impact on those financial results. That information,
together with the information set out in the Appendix below is
provided in compliance with the requirements of DTR6.3.5(2)(b).
This information is not a substitute for reading the full Annual
Report and Accounts for the year ended 31 January 2024.
For
further information:
|
Ciaran Stone, Group General Counsel
and Company Secretary
Card Factory plc
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Tel: 01924 839150
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ENDS
Appendix
Principal Risks and Uncertainties
The principal risks and
uncertainties facing the cardfactory group (the "Group") are set
out below, together with details of how these are currently
mitigated. For further information on how the Group manages risk,
see pages 65 to 68 of the Strategic Report and also pages 78 and 79
of the Corporate Governance Report within the Annual Report and
Accounts 2024 ("Annual Report").
|
Risk
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Description
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Mitigation
|
|
Strategic Risks
|
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ESG compliance and
climate change
risks
|
Failure to meet requirements of
Institutional Investors, customers and other stakeholders on ESG
requirements may have an adverse impact on our colleagues,
customers, suppliers and our reputation which could lead to a
decline in sales and profits.
|
• 'Delivering a Sustainable
Future' plan
launched which outlines our sustainability strategy. The strategy
is built around four key areas where we want to deliver a positive
impact: climate, waste & circularity, protecting
nature and people &
equity.
• Each pillar
has a roadmap, detailing commitments and targets with owners
assigned.
• Various
other actions in relation to ESG can be found on pages 32 to 39 of
the Annual Report.
|
|
Operational Risks
|
|
IT
infrastructure
and security
|
Outdated, unsupported IT systems and
software could expose the business to security incidents,
unauthorised access and data breaches resulting in fines/
censure/outages/disruption/lost sales/ revenue etc.
|
• An IT
strategy is in place that includes the approach being taken
regarding the removal / migration of out of date / legacy systems,
including ringfencing systems to provide an additional layer of
security. Also, IT specialists support out of date / legacy systems
and back up arrangements and an IT disaster recovery plan is in
place.
|
|
Business
continuity
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Significant disruption to the
operation, including support centre, distribution centres, the
Printcraft site, design studio and IT systems could severely impact
the Group's ability
to supply stores and retail partners or fulfil online sales
resulting in financial loss, fines, loss of sales and/or
reputational damage.
|
• A
'Business Continuity
Management Framework' and a 'Business
Continuity Policy' are in place, which are reviewed annually and approved by the
senior management team.
• 'Crisis Management
Plan' and business
continuity plans are in place for all operations of the business
which are reviewed annually or when major changes to processes
occur or incidents arise. These plans include business impact
analysis, crisis response teams, recovery techniques, resources
etc.
• An IT
disaster recovery plan is in place for all operations of the
business which is reviewed annually or when major changes to
processes occur or incidents arise.
• The business
continuity and IT disaster recovery plans are tested annually with
lessons learned being produced and plans updated
accordingly.
|
|
Cyber
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Prolonged loss or disruption to IT
capability which could result in unauthorised access/data breaches,
void of insurance cover, malware, ransomware, significant IT
disruption, fines for negligence by the ICO, legal prosecution from
customers, settlements, leading to a loss of sales, reduction in
share price and lack of confidence by shareholders.
|
• The IT
strategy includes our approach regarding the removal / migration of
out of date / legacy systems as noted in the IT Infrastructure and
Security risk.
• Point of
Sale meets all payment card industry (PCI) compliance requirements
and PCI training is refreshed annually and completion rates
tracked.
• Two-factor
authentication (2FA) has been implemented across the majority of
our systems.
• 'Bring Your Own
Device' policy
approved and in place with a mobile device management system rolled
out to senior management and 2FA in place for password
changes.
• Cyber
expertise is employed within the business and appropriate cyber
controls are in place. Plans designed to continue to address
multiple cyber risks, alongside further risk mitigations arising
from replacement of legacy systems, are also in place.
• Data
Protection Officer in place.
• Crisis
management and IT disaster recovery plans in place for all
operations of the business which are reviewed annually or when
major changes to processes occur or incidents arise.
|
|
Supply Chain
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The Group uses many third parties
for the supply of products, predominantly based in
China.
Risks include the potential for
supplier failures, risks associated with manufacturing and
importing goods from overseas, potential disruption at various
stages of the supply chain and suppliers failing to act or operate
ethically which could result in unavailability of stock leading to
reduced sales.
|
• Multiple
suppliers utilised across product and category ranges to off-set
supply or cost pressures.
• Detailed
critical path process in place for each season detailing plans from
design through to delivery, which is reviewed weekly and actions
taken if issues arise.
• All overseas
suppliers sign up to an online compliance platform providing all
necessary documentation including adherence to the Modern Slavery
Act.
• External and
ethical audits and Sedex membership performed with a
'no audit, no
order' policy.
• All product
testing and quality control inspections undertaken by authorised
accredited providers.
• Active
monitoring of shipping channels and when issues arise these are
discussed by the senior management team as to potential impact with
plans drawn up to off-set any delays in goods being
received.
• Multiple
shipping agents and lines are utilised.
|
|
Regulatory
compliance
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The Group is exposed to a diverse
number of legal and regulatory compliance requirements including
Modern Slavery Act, the General Data Protection Regulation (GDPR),
Listing Rules, employment law, tax, FSC, product safety,
competition law, etc. Failure to comply with these laws and
regulations could lead to financial claims, penalties, awards of
damages, fines or reputational damage which could significantly
impact the financial performance of the business.
|
• Compliance
responsibilities matrix in place detailing all compliance-related
matters across the organisation with assigned owners.
• Ongoing
review of regulatory changes monitored by relevant owners to
identify developments and ensure changes to operations, processes,
training, as applicable.
• External
advisers in place who provide ad hoc information updates or
highlight changes to existing legislation or new regulations coming
into force that may impact the organisation.
• Access to
external bodies who provide updates on specific regulations e.g.
product labelling and product safety.
• Governance,
Listing Rules, DTRs, Market Abuse etc. overseen by the General
Counsel.
• Quality
assurance process in place to ensure that products comply with
legal / ethical regulations / legislation etc.
|
|
Financial Risks
|
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Geopolitical
instability
|
Geopolitical instability may result
in cardfactory being unable to secure the products required to
fulfil customer demand on time and at acceptable prices. This could
result in customer dissatisfaction, reputational impact, loss of
market share, loss of sales and erosion of expected profit
margins.
|
• Continual
review of supply base to understand best route to market (and to
protect prices and impact on trading performance) including options
to move supply to new territories and using UK-based suppliers to
assist in mitigating any supply issue.
• Price
elasticity assessments undertaken to provide insights on
consequences of future price increases.
• Review of
import tariff duties and 'live'
Government legislative changes in the UK and new
territories to ensure we are always sourcing from the best source
to support the overall business.
• Continual
review of global matters that may affect supply.
|
|
Cost price
inflation
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Increasing input costs without
mitigating actions will either result in lower levels of
profitability/generation of cash or forces higher prices resulting
in possible impact on value perception and/or customers choosing to
buy elsewhere.
|
• Input costs
are monitored and proactive plans are developed as part of the
annual planning and monthly review process to mitigate cost price
inflation.
• Hedging in
place for foreign exchange, interest and energy; policies reviewed
annually and hedging position reviewed monthly.
• Management
of freight rates process in place and market monitored to identify
any potential increases so that these can be factored into pricing
decisions.
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Directors' Responsibility Statement
The Annual Report and Accounts 2024
contains a statement of directors' responsibility by Darcy
Willson-Rymer, Chief Executive Officer, by order of the Board in
the following form:
"We confirm that to the best of our
knowledge:
· the
financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken as
a whole; and
· the
Strategic Report includes a fair review of the development and
performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Group's position and performance, business model and
strategy."
Related Party Transactions
Details of the only material
transactions with related parties during the financial year ended
31 January 2024 are set out in note 28 of the financial statements
on page 153 of the Annual Report and Accounts.