Annual Report and Accounts 2025

Annual Report

and Accounts 2025

Creating celebrations

for all life’s

moments

Annual Report and Accounts 2025

Card Factory plc Annual Report and Accounts 2025

We are the UK’s leading specialist retailer of cards, gifts and celebration

essentials, with a successful and profitable estate of 1,090 stores across

the UK & Ireland. As we deliver on our ‘Opening Our New Future’ strategy,

our reach continues to expand internationally through both acquisitions in

the US, Republic of Ireland and South Africa, as well as through partnerships

in other target territories.

We deliver on our purpose of making, sharing in, and celebrating life’s

moments special and accessible for everyone by maintaining the lowest price

points in the market through our in-house design and manufacture of an

extensive range of high-quality cards, gifts and celebration essentials.

Strategic Report

1 FY25 highlights

2 Our focus

8 Our investment case

10 Chair’s statement

12 Our markets

14 Our brand

16 International expansion

18 Our business model

22 CEO’s review

24 ‘Opening Our New Future’ strategy

26 Strategy in action

36 Environmental, Social & Governance

44 Climate change and TCFD

56 Our stakeholders (Section172 statement)

60 CFO’s review

69 Risk management

74 Non-financial and sustainability

information statement

Governance

76 Chair’s letter – Corporate Governance

77 Governance at a glance

78 Board of Directors

80 Corporate Governance Report

87 Chair’s letter – Audit & Risk Committee

88 Audit & Risk Committee Report

91 Chair’s letter – Remuneration Committee

94 Directors’ Remuneration Report –

Remuneration Policy

102 Annual Report on Remuneration

115 Chair’s letter – Nomination Committee

116 Nomination Committee Report

117 Directors’ Report

122 Statement of Directors’ responsibilities

Financial Statements

124 Independent auditor’s report

131 Consolidated income statement

131 Consolidated statement of

comprehensive income

132 Consolidated statement of

financialposition

133 Consolidated statement of changes

inequity

134 Consolidated cash flow statement

134 Notes to the financial statements

163 Parent Company statement of

financial position

163 Parent Company statement of changes

in equity

164 Parent Company cash flow statement

164 Notes to the Parent Company

financialstatements

Company Information

169 Glossary

IBC Advisers and contacts

Creating

celebrations

for all life’s

moments

pages 2-3

Driving

growth across

channels &

markets

pages 4-5

Building the

organisation

to deliver our

ambition

pages 6-7

Welcome to cardfactory –

whereeveryone can celebrate

life’s special moments.

Strategic Report Governance Financial Statements Company Information

FY25 HIGHLIGHTS

Financial Key Performance Indicators (KPIs)

–

FY23

4.5

FY24

4.8

FY25

FY22

FY21

107.8

113.6

79.9

FY23

118.7

FY24

105.6

FY25

FY22

FY21

12.1

2.5

(3.7)

FY23

13.5

FY24

14.3

FY25

FY22

FY21

16.7

33.8

36.1

FY23

27.1

FY24

29.0

FY25

FY22

FY21

£542.5m

Revenue (£m)

cardfactory LFL sales (%)

2 3

14.3p £29.0m

Adjusted EPS

(pence per share)

Adjusted Free

Cash Flow (£m)

4.8p £105.6m

Dividend per share (pence) Operating Cash Flow (£m)

48.9

11.1

(15.2)

FY23

62.1

FY24

66.0

FY25

FY22

FY21

£66.0m

Adjusted PBT (£m)

The Group presents financial KPIs to demonstrate progress in sales, profit before tax, earnings and cash generation. Following the recommencement of dividends and update to

the Group’s Capital Allocation Policy last year, the financial KPIs presented here have been updated to reflect those metrics relevant to capital allocation and shareholder returns

(free cash flow, Adjusted EPS and dividends per share) in addition to core financial performance KPIs. All of the measures presented are either measures calculated in accordance

with IFRS (see financial statements starting on page 131) or Alternative Performance Measures (APMs). FY25 means the financial year to 31 January 2025.

1. The above financial KPIs are either measures calculated in accordance with IFRS (see financial statements starting on page 131 or are Alternative Performance Measures).

2. See the glossary on pages 169 to 172 for Alternative Performance Measures (APMs) and other explanatory information.

3. Excludes periods of store closure.

See the CFO review on pages60-68.

More about us online:

cardfactoryinvestors.com

6.7

(3.9)

0.1

FY23

7.6

FY24

3.3

FY25

FY22

FY21

+3.3%

52.4

11.1

(16.4)

FY23

65.6

FY24

64.1

FY25

FY22

FY21

£64.1m

Profit Before Tax (£m)

463.4

364.4

285.1

FY23

510.9

FY24

542.5

FY25

FY22

FY21

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Card Factory plc Annual Report and Accounts 2025

OUR FOCUS

Creating celebrations for all

life’s moments

“We make sharing in

and celebrating life’s

moments special and

accessible foreveryone.”

By continually developing and expanding our range of affordable

and high-quality cards, gifts and celebration essentials, we are

helping customers create truly memorable celebrations that

drive satisfaction and trust. Putting the celebration needs of our

customers first means we are developing the offer and seamless

celebration experience that is driving footfall and growth.

Supported by year-round relevant promotions, we are

continually reinforcing our value credentials.

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Company Information

Our authority in celebrations

Responding to consumer celebrations trends

From products created in our design studio to the customer

service experience training we are giving our colleagues

in-store, we are applying customer data into our thinking

and growing our ability to respond to market change.

Evolution of our offer

Building out the right range for our customers

Our strong performance in cards, gifts and celebration essentials

comes from our continual range innovation and expansion, which

in FY25, included stationery, toys, gift food and gift vouchers.

Engaging our customers

Passionate colleagues as celebration experts

We continued to develop our colleague customer experience

training programme – ‘The cardfactory Way’ – launching new

coaching cards to facilitate great development conversations

between store managers and their colleagues, and new recognition

badges for outstanding customer service.

Maintaining our value credentials

Delivering exceptional value for our customers

Maintained our value for money proposition with cards

still starting from just 29 pence while, delivering year-round

relevant promotions.

Helping our customers shop conveniently

Our transformation into an omnichannel retailer

We continue on our transformation into the leading

omnichannel retailer in our space through the further

refinement and improvement of our Click & Collect service.

Omnichannel is central to our digital strategy as it will allow

us to capture the online spend of our 24 million unique

in-store customers.

Unlocking our future growth

by delivering on our purpose.

Find out more

about our business

model online

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Card Factory plc Annual Report and Accounts 2025

OUR FOCUS CONTINUED

Driving growth across

channels &

markets

Our extensive store network and the investments we are making

in our online and omnichannel propositions are making it easier

for our customers to create their celebrations. Through our

partner network in the UK and internationally, we are more

accessible to more customers in more places supported by

targeted international acquisitions that are unlocking growth

opportunities in priority markets.

“Delivering an exceptional,

seamless celebrations

experience in the UK and

internationally.”

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Company Information

Scalable central model, driving organisational efficiency

Creative | Manufacturing | Technology

‘Opening Our New Future’

Value & choice Convenience Experience

“An extensive and growing estate

of1,090stores across the UK & Ireland.”

Growing our stores

Investing in the profitable

future of our stores

We have an extensive and growing estate

of 1,090 stores across the UK & Ireland,

underpinned by a highly successful

space optimisation programme that is

allowing us to further unlock gift and

celebration essentials range expansion

while maintaining our authority and

choice for card.

Our product innovation

Responding to consumer

demand through range

development

To deliver on our strategic ambition

ofbecoming a celebrations destination,

we are continually developing our

extensive range of cards, gifts and

celebration essentials with new and

expanded categories introduced inFY25.

Accessing new markets

A leading global

celebrationsbrand

Our journey of international expansion

continued in FY25 with our entry into

the US market through the acquisition

of Garven and entering a wholesale

agreement with a nationwide US

retailer, as well as the acquisition of

Garlanna in the Republic of Ireland.

See the international expansion

section on pages16-17.

Expanding our partnerships

Ongoing success within our

partnership programme

We continue to build on our successful

UK and international partnership

programme with full-service models

now adopted with both The Reject

Shop in Australia and Aldi in the

UK & Ireland where we are now a

supplier of everyday card across their

1,200storeestate.

Our digital ambitions

Investing in our digital channel

We are focused on a direct to recipient

offer and experience. This will drive

card attached gifting, offering greater

value for our customers compared to

the competition.

See the strategy in action section

on page 31.

Find out more

about our strategy

online

The first choice for celebrations

as a global celebrations group.

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Card Factory plc Annual Report and Accounts 2025

OUR FOCUS CONTINUED

Building the organisation

to deliver

our ambition

Read more about our colleagues onpage59.

With a clear strategic direction, detailed plans and a

disciplined approach for delivery, we are investing in the

right capabilities and capacity that is enabling our growth

transformation. This is built upon the culture, behaviour

and values that has created the environment to drive the

business forward, supported by a relentless focus on

productivity and efficiency.

“A scalable central

model that drives

organisational efficiency,

while enabling our value

and quality offer.”

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Company Information

Evolving our business

Investing in capabilities

and innovations

Underpinning our growth is investment

in our technology, manufacturing and

distribution infrastructure, which is

the critical enabler of change for any

business which is seeking growth

transformation.

Responding to headwinds

Tackling inflationary headwinds

through our efficiencies and

productivity programme

We are offsetting inflationary headwinds

through our proven approach which

includes our ‘Simplify and Scale’

productivity and efficiency programme,

as well as range development and

pricing, while continuing to invest in

our future growth.

Value focused

How we are maintaining our

value credentials

Our offer combines low prices and

relevant promotions with an extensive

range of quality products that reinforces

our value for money proposition.

See the strategy in action section

on pages 26-28.

Vertically integrated model

Our unique design, production

and retail model

Our business is built around a scalable

central model that drives organisational

efficiency, while enabling our value and

quality offer.

See our business model

pages18-21.

Enabling international

expansion

How we are supporting our

international expansion driv

We are investing in the capability

and capacity we need to support

international expansion across our

end-to-end design, production,

buyingand distribution model.

Cultural progress

Putting our values at the

forefront of our thinking

We are creating a culture within

cardfactory that is unlocking our

growth potential, built upon values

that put our customers at the heart

of our decision making.

Integrating sustainability

and corporate social

responsibility

Considering people, planet and

profit in our decision making

We’re delivering on our commitment

to embed sustainability considerations

into our growth plans and daily decision

making, ensuring we can operate in

a way that addresses environmental

impact and contributes positively to the

communities we live and work in.

See the ESG section

on pages 36-43.

Find out more about

our culture and

values online

Investing in the enablers of change across

the organisation.

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Card Factory plc Annual Report and Accounts 2025

OUR INVESTMENT CASE

Delivering

growth

By continuing to deliver on our ‘Opening Our New Future’

strategy, we are fulfilling our vision of transforming

cardfactory into a leading global celebrations group.

Proven delivery of growth

Since our ‘Opening Our New Future’ growth strategy was launched in FY23, we have:

• added £80 million of sales (+17%);

• increased adjusted profit before tax (PBT) by +35%;

• continued to open new stores in the UK & Ireland; and

• delivered a +7.3% store sales CAGR.

By delivering on our strategy and our opportunities forgrowth, after FY26 we are targeting:

Sustainable,

progressive

dividend based

on a 2-3x dividend

cover ratio

on adjusted

earnings.

Free cash

generation

of 70-80%

of adjusted

earnings.

Adjusted

profit before tax

growth in the mid-

to-high single-digit

percentage

range.

Mid-single-digit

percentage sales

growth.

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Company Information

Reaching more customers,

inmore locations

• We will continue to build our store estate footprint,

opening new stores at a similar rate to the past

two years across the UK & Ireland by targeting

underpenetrated markets.

• We have significant opportunity through our

retail partnerships strategy to address an £80

billion global celebrations market, the largest of

which is in North America, where we now have an

established presence and opportunity to create a

credible card-led celebration offer.

Increasing our share of the

£13.4billion UK celebration

occasions market

• As the leading omnichannel retailer with

nationwide presence of cards, gift and celebration

essentials in the UK, we combine our outright

market leadership in greeting cards with our

growing gifts and celebration essentials ranges.

• We continue to progressively capture more of our

24 million unique customers’ annual celebration

spend with share of wallet increasing 1ppt over

the last two years and target further growth at

a similar rate.

Leveraging our vertically

integrated model to drive

efficiency and lowest cost

tooperate

• Our vertically integrated business model of design,

manufacturing and retail supports our credentials

as a value retailer, with a quality offer, that can

respond rapidly to changes incustomer tastes

and needs.

• Our established ‘Simplify and Scale’ efficiency

and productivity programme will continue to

deliver astructural reduction in our underlying

cost base.

With a brand that is consistently rated the

most trusted brand in our sector intheUK,

and as we expand our offer to include card,

gift and celebration essentials, wewill

deliver on our purpose to make sharing in

and celebrating life’s moments special and

accessible for everyone.

No.1

for trust

No.1

for breadth

of range

No.1

for good

value

1. Savanta BrandVue Feb 2024 to Jan 2025. Key competitors are specialist UK card and gift retailers.

Drivers of

growth

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about our approach

togovernance

online

Card Factory plc Annual Report and Accounts 2025

CHAIR’S STATEMENT

Strong

growth

Paul Moody

Non-Executive Chair

“FY25 saw encouraging

progress against our

strategic objectives with

our store estate making

further good progress.”

Dear Shareholders,

The strong top and bottom-line growth

delivered in the year reflects our continued

clear market leadership in card combined

withthe emerging strength of our celebrations

proposition. As we progress delivery against

our ‘Opening Our New Future’ strategy,

webegin to see the operational and financial

benefits as we look to meet our ambition of

becoming a leading global celebrations group.

Our unwavering focus on value and quality

remains central to our customer offer. Our

ability to innovate and evolve ranges ensures

that we are relevant and accessible to a

broadening base of customers. A clear focus

on improving productivity and efficiency

enables us to target the lowest possible

operating costs, supporting the achievement

of stable profit margins.

The Board recognises and appreciates the

hard work and commitment of colleagues

throughout the business. Against a challenging

economic background, thebusiness has

continued the cultural journey, with our

customers benefitting from increased

customer-centric decision making that

is helping to build our reputation as a

celebrations retailer.

Year in review

FY25 saw encouraging progress against our

strategic objectives with our store estate,

in particular, making further good progress

through space optimisation and range

development. As a consequence, bothlike

for like card sales and average basket

valueincreased.

Internationally, FY25 saw encouraging

progress. Two further acquisitions, in the

Republic of Ireland and US, will help build our

internal capability whilst adding in-market

presence. We are confident that the US

market presents a significant opportunity

for the business in the medium term. Our

wholesale model is resonating well with

partners both in the UK and internationally,

evidenced by contract renewal and

geographical expansion with keypartners.

The decision to close gettingpersonal.co.uk

as of 31 January 2025 will allow the business

to focus on driving efficient, profitable online

growth at cardfactory.co.uk. The Board

recognises the growth potential of our online

business and continues to support the

development of this strategic initiative.

Outlook and macro environment

Trading through the first months of the

new financial year has been in line with

management expectations. The Board was

encouraged by the good momentum from

the second half of FY25, that continued across

our FY26 Spring seasons of Valentine’s Day

and Mother’s Day. A particular highlight was

a new record trading day being reported on

Saturday before Mother’s Day FY26.

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Strategic Report Governance Financial Statements

Company Information

The Board’s expectations for FY26 remain

unchanged; we expect to deliver a mid-to-high

single-digit percentage increase in adjusted

profit before tax in FY26 with margin expected

to be in-line with FY25.

Changes to the rates of the National Living

Wage and Employer National Insurance

contributions will result in annual cost

inflation of c.£14 million in FY26. We expect

to offset this through a combination of our

productivity and efficiency programme,

product range development and retail pricing.

Our capital allocation policy details the

methodology for determining the extent

of any surplus cash and how that may be

returned to shareholders. In line with this

policy, the Board has recommended a final

dividend of 3.6 pence per share, resulting in

a total dividend of 4.8 pence per share for

FY25 (FY24:4.5 pence per share).

ESG strategy

The Board continued to provide oversight

of progress towards the ‘Delivering a

Sustainable Future’ plan. This plan will

deliver on cardfactory’s commitment to

combine our focus on maintaining value

and business growth with playing our part

in helping to protect the planet, supporting

our communities, and managing the impacts

of environmental and social changes on our

business and supply chain. Positive progress

was made across all five pillars of the plan:

Climate, Waste and Circularity, Protecting

Nature, People and Equity, and Governance.

Board appointments

In June 2024, the Board welcomed Pam

Powell as Senior Non-Executive Director,

following Roger Whiteside stepping down.

Pam is an internationally experienced

blue-chip consumer FMCG marketeer and

brings extensive non-executive and consumer

facing executive experience which will prove

valuable to the Board’s strategic debates.

Pam was appointed a member of each of

the Company’s Remuneration Committee,

Audit &Risk Committee and Nomination

Committee. Nathan (Tripp) Lane also stepped

down from the Board in July 2024.

Summary

The Board remains confident in the compelling

growth opportunity for the business, which

has a clear strategy tobecome a leading global

celebrations group.

Paul Moody

Non-Executive Chair

7 May 2025

Find out more

about our ESG

strategy

online

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Card Factory plc Annual Report and Accounts 2025

-15

Jan 21

Apr 21

Jul 21

Oct 21

Jan 22

Apr 22

Jul 22

Oct 22

Jan 23

Apr 23

Jul 23

Oct 23

Jan 24

Apr 24

Jul 24

Oct 24

Jan 25

Feb 25

-10

-5

OUR MARKETS

Winning in mature

markets

Celebrating life’s moments is an important part of cultures

around the world. Whether life stage milestones, religious

festivals or achievements, celebrations bring people together

toconnect, to share in amoment and to appreciate things that

are important to them.

Creating a celebration for a life moment takes careful planning

and consideration. It requires products, retailers and suppliers

all coming together to enable customers to make these

moments special.

£13.4bn

Targeted UK celebration

occasionopportunity

1,2,3

£80bn

Targeted international celebration

occasion opportunity

+0.5%

cardfactory celebration

occasion market share growth

(UK physical retail)

+1.3ppt

Celebration occasion customers

shopping with cardfactory (UK)

Overall consumer sentiment index

780m

Overall UK card

market volume

(2024)

Leader in the UK & Ireland,

withgrowing international reach

Building from our core of greeting cards in the

UK, we have expanded to become a leader

in celebration essentials and have a growing

strength in gifts.

The UK market for celebration occasions

is large, estimated to be worth c.£13.4

billion

1,2,3

. This includes the greeting cards

market at c.£1.4 billion

, gifts at c.£10billion

and the market of celebration essentials at

c.£2billion

Internationally, our research indicates a

targetable opportunity of c.£80 billion across

card, gift and celebration essentials in seven

key markets. The largest international market

is the US which represents a c.£65 billion

targetable opportunity

Market trends

In the UK, uncertainty in the economy has

continued to impact consumer spending

behaviour. Although cost–of–living pressure

iseasing, it is taking time for consumers to

feel more confident in their financial situation,

and for this to translate into increased

spending on celebrations.

UK consumer confidence grew across the

year. GlobalData’s consumer sentiment index

recorded an increase of 5.6 points (from

–3.7to +1.9) between January 2024 and

January 2025

Consumers have been resilient in their

shopping behaviours and continue to shop

for celebrations – around 99% of the UK adult

population shopped for celebrations in the

52weeks to 26January2025

Overview of our markets

Our focus is the celebration occasions market,

enabling customers to find everything they

need to celebrate a life moment.

Our market is made up of three categories:

greeting cards, gifts and celebration essentials.

• Greeting cards – cards purchased in-store

or online to help customers to express

and share their celebratory message

for a broad range of life moments, from

birthdays to weddings, and from new

home to graduations.

• Gifts – items purchased to help celebrate

a person or occasion, bought individually

or with a card. These include stationery

(e.g.calendars and notebooks) and craft,

small toys, books, candles, homewares

such as mugs, glassware, and other small

gift items such as keyrings and novelty gifts.

• Celebration essentials – all the products

needed to turn a life moment into a

celebration occasion, such as balloons,

party products, wrap, bags and accessories.

See the Our international presence section

on pages16-17.

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Grocery multiple competitors have

experienced limited growth in physical retail

celebration occasions. Kantar indicates

physical retail value growth of just +1.7%

YOYin the 52 weeks to 29 December 2024

Discount retailers and value specialists have

grown slightly behind the grocery multiple

segment. The value of spend in these retailer

clusters has grown +1.4% YOY in the 52 weeks

to 29December 2024

Greeting cards

Purchasing greeting cards continues to be a

popular shopping mission, with 39.8 million

UK adults purchasing a card in the 12 months

to February 2025, a slight drop compared to

the prior year

. At a market level, 780 million

cards were purchased, representing a YOY

growth of +0.2%

. cardfactory continues to

retain its leadership position in both value

and volume of greeting cards sold in the UK,

as customers choose cardfactory for its range,

convenience andvalue.

Gifts

Kantar data indicates that within physical

retail, the gift market has experienced

value decline of -1.7% in the 52 weeks to

29December 2024. This is primarily driven by

a reduction in spend per basket on gift items.

While Kantar indicates the celebration

occasions market declined by -0.8% in the

52weeks to 26 January 2025 compared to the

prior 52 weeks, early signs of an improving

market were seen towards the end of 2024.

Customer shopping frequency increasing

+3.1% year-on-year (YOY) in the 12 weeks

to26January 2025.

Despite this improvement, consumers remain

highly price sensitive. A bespoke cardfactory

customer survey completed in September

2024 highlights that the top two drivers of

value for money perceptions for greeting card

buying are ‘having the lowest prices in the

market’, and‘having consistently low prices’.

These drivers are growing in importance and

are ahead of ‘having a wide range’ and ‘quality

products at reasonable prices’

In this context, cardfactory’s value proposition

continues to resonate. In the 52 weeks to

26 January 2025, cardfactory grew customer

penetration within the celebration occasions

market to 61% of UK adults – up 2.9%

YOY. Spend per basket at cardfactory grew

ahead of the celebration occasions market,

increasing +5.4% versus a decline of -2.0%

inthe rest of the market

Celebration occasions –

channeland competitive shifts

While consumer confidence and spending are

evolving, channel usage has remained relatively

consistent across 2024. The proportion of cards

purchased online has grown to 15.5% ofall

cards, up from 15.0% in2023

Competitors within the UK celebration

occasions market can be categorised

as: grocery multiples (e.g. Tesco, Asda),

celebrations specialists (e.g. cardfactory,

Clintons), discounters (e.g. B&M,

Home Bargains) and online pure-plays

(e.g.Moonpig,Funky Pigeon).

While the sub-categories of stationery

and craft and small toys have been more

resilient, other areas including gift vouchers

and experience days have driven the overall

category decline

In contrast, across 2024, cardfactory has

grown within the category, attracting more

customers to purchase gift items at a higher

frequency and spending more on those gifts

compared to 2023

Celebration essentials

Kantar physical retail data indicates that

consumers continue to purchase celebration

essentials at a high level with 93% of the

adult population purchasing items from this

category across 2024. Although participation

was high, the category experienced a decline

in value of -1.4% driven by a drop in consumer

frequency. Despite category weakness,

cardfactory has experienced a positive

performance with +3.1% more customers

YOY purchasing celebration essentials, with

celebration essential trip spend growing by

+5.7% in2024versus 2023

1. cardfactory bespoke annual UK Greeting

Card Market Survey FY23 (4,501

participants) commissioned with Dynata.

Feb 2023.

2. Kantar Worldpanel Plus (Physical

Retail) data to 52 w/e 22 Jan 2023 and

GlobalData Retail Occasions Series UK,

Partyware 2022.

3. Kantar Worldpanel Plus (Physical Retail)

data to 52 w/e 22 Jan 2023 and Whitecap

Consulting Ltd. Sept 2021.

4. GlobalData Global Expansion Project,

Jul 2022.

5. Kantar Worldpanel Plus (Physical Retail)

data to 52 w/e 29 Dec 2024.

6. cardfactory bespoke annual UK Greeting

Card Market Survey 2024.

7. GlobalData Retail Trend Tracker:

UKConsumer Sentiment.

8. Kantar Worldpanel Plus (Physical Retail)

data to 52 w/e 26 Jan 2025.

9. cardfactory price and value research,

Sept 2024.

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Card Factory plc Annual Report and Accounts 2025

The strength of the cardfactory

brand and its relationship

with our customers is, and will

continue to be, a core enabler

of our strategy.

Our purpose sits at the heart of our brand and

guides us in what we do: we make sharing in

and celebrating life’s moments special and

accessible for everyone. This statement is

more than simply a phrase in a document, it is

shared and used actively across the cardfactory

Group. It shapes every interaction and every

touchpoint internally and externally.

Our brand is 28 years in the making, since we

opened our first store in Wakefield in 1997.

Company Information

In FY25, with nationwide reach, cardfactory is

one of the most loved retail brands in the UK.

The love for the cardfactory brand successfully

converts into shoppers. A recent price and

value study commissioned by cardfactory

asked 4,500 consumers where they had

shopped for greeting cards, gifts and

celebration essentials in the past three months.

cardfactory was the second most popular retail

destination behind Amazon, andahead of

Tesco, Asda and Sainsbury’s. Thisbroad appeal

and high usage is our platform for growth

Bringing our brand to life for

customers and colleagues

We continue to prioritise the embedding of our

brand across the cardfactory Group. We know

that making celebrations special and accessible

is a powerful driver for culture and customer

growth. In FY25, we made strong progress both

internally and externally.

1. Store blueprints

We have refreshed the design of our

store blueprint in support of our purpose.

Our experience principles of ‘welcomed’,

‘wowed’ and ‘won over’ are embedded into

the environment, our product offer and

customer service.

2. Distribution livery

Together, with our third-party logistics

partner, road users will now see the

cardfactory brand and key messages

up and down the country. Our logistics

partner’s new dedicated fleet features 11

cardfactory branded trucks including two

eFreight electric trucks, which are also

helping to work towards becoming a more

sustainable brand.

3. Colleague celebration moments

Within cardfactory, celebrations are

important. From the big occasions down

to the little moments of appreciation.

Atthe start of our meetings, we

pause fora celebration moment – an

opportunity for colleagues to share

something they are personally celebrating

– an achievement in their home lives, a

person they value or a piece of work they

are proud of. These moments help us

connect as colleagues and reinforce the

importance of ourpurpose.

As we progress into FY26, we look forward

tocontinuing to make progress in bringing

our brand to life for customers, colleagues

and partners.

1. cardfactory price and value research. 4500 respondents, Sept 2024.

2. Savanta BrandVue Feb 2024 to Jan 2025. Key competitors are specialist UK card and gift retailers.

• Good value

• Wide range

• Ease of finding what you want

• Convenient

• Trusted

• Good service

1. Brand awareness 4. cardfactory no.1 metrics

3. NPS

5. Our values

+14.2

difference in NPS

score versus

key competitor

average

2. Brand consideration

+21ppt

difference in brand

consideration

versus key

competitor

average

+21ppt

difference in brand

awareness versus

key competitor

average

We lead the way

We stay curious,

agile and strive

for better

We celebrate

our difference

We know that

diversity is a

superpower

We make

it happen

We take personal

accountability

We do the

right thing

We make time

to think and act

with fairness

We care

We nurture our

communities

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Card Factory plc Annual Report and Accounts 2025

INTERNATIONAL EXPANSION

Our international

presence

International

Republic of Ireland

cardfactory is a recognised high street brand

in the Republic of Ireland, since 2017, with 41

Company-operated stores as at 31 January

2025. A curated cardfactory card range is now

also sold in all Aldi stores in Ireland.

Australia

The cardfactory range has been delighting

customers in Australia since 2020, through

an extended cardfactory branded offer in

TheReject Shop’s 393 stores.

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Company Information

SA Greetings is the leading wholesaler of

greeting cards, gifts and celebration essentials

in SouthAfrica, by offering value through

uniquely designed and high quality curated

products. It also operates 25 ‘Cardies’ retail

stores, and owns and operates a roll-wrap

production facility. Its head office and main

warehouse are located in Johannesburg,

withsales offices in Durban and Cape Town.

Alignment to our strategy

SA Greetings’ acquisition accelerates

our presence in this key market, with a

business that has a substantial share of the

wholesale market, providing opportunities

to realise efficiencies and use of respective

design and production facilities to serve all

internationalmarkets.

FY25 sales

£11.6m

Locations: Johannesburg (Head office,

card production and main warehouse).

Durban (Sales office). Cape Town (Sales

office). Ezakheni (Rollwrap production

andwarehouse).

Garlanna is a leading supplier of card,

giftwrap and bags to independent retailers

in the Republic of Ireland, with its own

design team and a team of field sales and

relationship managers who manage orders

and merchandising in convenience stores,

across a range of symbol groupoperators.

Alignment to our strategy

Garlanna’s premium brand in independent

retailers across the card market increases

our access to all customers in the Irish

market. The local market design expertise,

and differentiated operating model with

supply to an extensive range of convenience

retailers through its sales representatives,

supports development of ranges and

operating models for all our markets.

FY25 sales

£3.8m

Locations: Wicklow (Head office, Design team

and warehouse).

Garven is a leader in the design and wholesale

of gifts and celebration essentials, with a

primary focus on gift bags and wrap and

related accessories. Other bespoke gifting

and design-led products, including wall décor,

are designed and sourced for wholesale to

US retailers and online marketplaces. Sister

brand, ‘Cadence’ leverages on Garven’s design

expertise to develop bespoke packaging for

product brand owners andretailers.

Alignment to our strategy

Garven and cardfactory’s combined

strength in gift accessories brings design

and sourcing efficiencies. Garven’s strong

market presence provides a foundation

for extension of the offer to cards, and can

also support the cardfactory supply to retail

partners in the US.

FY25 sales

£26.2m

Locations: Minnesota (Head office

andDesignteam).

cardfactory’s international expansion has been supported by targeted acquisitions to enhance capabilities

inkey territories. This started with the acquisition of SA Greetings (SouthAfrica) in April 2023, Garlanna (Ireland)

inSeptember2024 and Garven (Minnesota, US) in December2024.

FONT

(PT Sans Narrow)

Logo to be used:

Black on White or White on Black

SIZE

Our logo is fully scalable, ensuring clarity and quality at any size.

Data correct as at 31 January 2025.

FY25sales reflects total sales for the 12 months to

31January 2025 (which may include the period prior

toacquisition), with exchange rates adopted as stated

in note 1 to the accounts on page 139.

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Card Factory plc Annual Report and Accounts 2025

OUR BUSINESS MODEL

A unique vertically

integrated model

Design

Retailing

Manufacturing

3.2.1.

Data-led design ensures rapid

response to changing consumer

trends and preferences.

• End-to-end control of product chain allows

flexible and rapid adaptation e.g. to reprint

anunexpectedly popular line.

• Card designs are planned in line

with the forwardprice architecture

(‘designtothebudget’).

Large-scale print facility inBaildon,

Yorkshire (Printcraft), is a key USP

forcardfactory.

• Produces 90% of all cards we retail through

ourstore network as well as our online cards.

• Continued investment ensures lowest cost to

operate print facilities and maintains quality

ofproduct.

Own estate of 1,090 retail

stores across UK & Ireland, online

and partnering with other retailers

to extend reach.

• UK & Ireland store network is main route

tomarket.

• Together, our stores and online presence

isunlocking our omnichannel growth

opportunity.

All data correct as at 31 January 2025.

UK design

colleagues

464

UK support

colleagues

124

UK manufacturing

colleagues

267

UK distribution

colleagues

8,338

UK & Ireland

retail colleagues

1,090

UK & Ireland

retail stores

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Company Information

Our business model continues

to evolve to enable our

transformation into a leading

global celebrations group.

As we deliver on our ‘Opening Our

NewFuture’ strategy, we are evolving

ourbusiness model in six areas:

Our

distribution

capability

We are in the process of

expanding our distribution

capacity, providing the

capacity headroom through

the delivery of the strategy

for all omnichannel and

partner needs.

Our ongoing

potential

We continue to grow our

store estate of 1,090 stores

in the UK & Ireland, while

developing our omnichannel

capabilities. And we will

have additional touchpoints

through our online offering

and via our UK and

international retail partners

as well asacquisitions.

Our global

potential

Building on the success of

three acquisitions over the

last two years, targeted

acquisitions will allow us

to expand our footprint

and add new capabilities

toouroffer.

Our

production

capability

Our in-house manufacturing

facility provides card

production for our UK,

Ireland and international

partners stores. We can

produce new ranges in as

little as four weeks and

remanufacture quick selling

lines in just days. This

allows us to maintain both

our quality and value for

moneycredentials.

Our buying

capability

As part of our expansion,

both internationally and

across gifts and celebration

essentials, we are developing

the sourcing and buying

capability that we need to

support a fully optimised

global supply base. This

ensures we can deliver speed

to market with a continual

focus on sustainability,

product development and

cost management enabling

our offer to exceed

customerexpectations.

Our design

capability

Our design capability uses

insights, sales data and trend

analysis. This ensures our

product offering for card, gift

and celebration essentials

meets the needs of loyal

customers, while appealing

to new demographics

in the UK and for our

partnersinternationally.

Insight-led

design

Speed to

market from

UK production

Supports

global supply

base

Capacity

headroom to

meet demand

Expanding

customer

touchpoints

Growing

international

capabilities

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Card Factory plc Annual Report and Accounts 2025

OUR BUSINESS MODEL CONTINUED

Creating value for...

Our communities

From individual store community

initiatives to The Card Factory

Foundation and 18-year long support

of Macmillan Cancer Support, we

place the communities we operate

within at the heart of our business.

Our planet

We are delivering on our vision

of minimising our environmental

impact with sustainability

embedded within our

growthstrategy.

Our shareholders

We provide consistent, profitable

and sustainable growth, returning

surplus cash to shareholders

through a clear capital

allocationpolicy.

Our colleagues

We have an inclusive culture that

nurtures talent across the entire

business, ensuring we deliver on

our values every day.

Our suppliers

We are committed to building

sustainable supplier relationships

to profitably deliver products and

services that meet customer needs.

Our customers

Our unique, vertically integrated

business model ensures our

customers can easily access an

extensive range of quality and

value products to meet all of their

celebration needs.

01 02 03

04 0605

See pages

56 to 59 for

more on our

engagement

with our

stakeholders

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We continue to grow our

store estate of 1,090

stores in the UK & Ireland,

while developing our

omnichannelcapabilities.”

Strategic Report Governance Financial Statements

Company InformationStrategic Report Governance Financial Statements

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Find out more

about our FY25

performance

online

Card Factory plc Annual Report and Accounts 2025

CEO’S REVIEW

Growing market

Darcy Willson-Rymer

Chief Executive Officer

”We continue to grow our share

of the celebration occasions

market through the expansion

of our gift and celebrations

essentials offer while leveraging

our continued leadership in the

card market.”

Introduction

Progress on our growth journey continued at

pace in FY25 with further strong revenue and

profit growth. As the leading omnichannel

retailer of cards, gifts and celebration essentials

in the UK and with a growing international

presence, we are well positioned to capitalise

upon the exciting opportunity presented by

the celebration occasions market across all the

countries we operate in.

Our ambition is to become a leading global

celebrations group. We are achieving this

by reaching more customers, in more

locations through our channels and markets

and increasing our share of wallet in the

£13.4billion UK celebration occasions market.

This is underpinned by our vertically integrated

model that drives efficiency and allows us to

target the lowest possible operating costs as

a value business.

Colleagues continue to focus on our core

values, ensuring we put the customer first in

our decision making. By doing so, we continue

to make good, profitable progress that is

resonating with customers as we deliver on our

purpose of making celebrating life’s moments

special and accessible for all.

FY25 performance

In FY25, we achieved strong sales and Adjusted

PBT growth in line with market expectations

which was driven by effective execution of

our strategy. Our revenue growth of +6.2%

to £542.5 million was ahead of the wider

celebration occasions market. We maintained

stable profit margins through disciplined

financial performance and the delivery of our

efficiency and productivity programme which,

alongside sales growth, successfully offsets

inflationaryimpacts.

UK consumers continue to celebrate life’s

moments, with around 99% of UK adults

shopping for celebrations in the 52 weeks

to26 January 2025.

While Kantar reports a modest -0.8% decline in

the celebrations market, improving momentum

emerged towards the end of 2024. cardfactory

outperformed the market, with basket spend

up +5.4% versus a -2.0% market decline,

supported by a +2.9% year-on-year (YOY) rise

in market penetration to 61%. Despite higher

shopping frequency, customers remain price

sensitive, with value perceptions of cardfactory

driven by low and consistent pricing. Our

proposition continues to resonate strongly in

this environment, reinforcing our leadership in

value-led celebration retail.

Our highly profitable store estate delivered

revenue growth significantly ahead of the retail

sector in FY25. Total store revenue grew +5.8%

with 32 net new stores opened in FY25, bringing

our extensive store footprint to 1,090 as of 31

January 2025. Our capex light approach to space

optimisation also significantly contributed to

like-for-like (LFL) store revenue growth of +3.4%

in FY25 as it continued to underpin strategic

category expansion of gift and celebration

essentials. This drove double-digit LFL growth in

key categories including confectionery (+25%),

soft toys (+22%) and stationery (+18%).

We continue to grow our share of the celebration

occasions market through the expansion of our

gift and celebration essentials offer +5.7% LFL

while leveraging our continued leadership in the

card market +0.7% LFL. With 70% of gift ranges

new for FY25, highlights included new baby, toys,

gift food and confectionery ranges, as well as an

updated and expanded party range and balloon

offer, where we remain the UK market leader.

Range development also enabled higher retail

pricing on gifts, which contributed to a +6.7%

year-on-year improvement in average basket

value (ABV) with approximately half of all

baskets in FY25 including gift or celebration

essentials items.

Further growth was achieved across both

seasonal and everyday cards as we added

more choice through trend-focused range

development and our strong value credentials.

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Company Information

Partnerships revenue grew by 30.6% to

£22.2million including contributions from

Garlanna, acquired in September 2024, and

Garven, acquired in December 2024. Both

businesses are delivering in line with our

expectations as we focus on identifying and

unlocking opportunities in their respective

markets. Our full-service partnership model

continued to deliver success with UK partners,

with rollout for international partners in

FY26. We completed rollout to the full Aldi

UK & Ireland estate in September 2024 and

extended our partnership with The Reject Shop

in Australia, to a new multiyear agreement,

including seasonal range supply. In the

US, wesecured our first wholesale supply

agreement with a nationwide retailer covering

over 1,100stores, initially with acurated

Christmas card range which was extended to

a curated Valentine’sDay, and Mother’s Day

offer in FY26.

We continued to focus on developing our

online offer and omnichannel propositions with

cardfactory.co.uk LFL sales in line with FY24

as we refined our ranges to support online

margin growth. The decision was taken to close

gettingpersonal.co.uk as of 31 January 2025

to focus on driving efficient, profitable online

growth at cardfactory.co.uk. Development of our

omnichannel propositions also continued with

improvements made to our nationwide Click &

Collect service, with average order value (AOV)

55% higher than online AOV, which continues to

be materially higher than storeABVs.

Our proven productivity and efficiency

programme remains key to offsetting

inflationary impacts and maintaining profit

margins. In FY25, this was further developed

into a multiyear ‘Simplify and Scale’ programme

with key initiatives for the past year including the

implementation of a new industry-recognised

labour management system to enable

prioritisation of value-add customer service

activity and remove store inefficiencies. Inflation

management was also supported through

our pricing methodology with strategic range

development introducing a ‘good’, ‘better’, ‘best’

approach to evolve card pricing architecture.

Strategy delivery

Two years on from our Capital Markets

Strategy Update in FY23, we have made good

progress on our ‘Opening Our New Future’

growth strategy. By delivering on our building

blocks of growth we are achieving growth

ahead of the wider celebration occasions

market, combining our market-leading

greeting card offer with an expanding range

of gifts and celebration essentials.

Since FY23, we have added £80 million of sales

(+17%) to our business and increased Adjusted

PBT by +35%, despite a much higher level of

inflation than originally anticipated. Our profitable

and expanding retail footprint combined with the

increasing penetration of our gift and celebration

essentials offer has delivered a +7.3% store sales

CAGR since FY23. We continue to grow our store

network in FY25, including in underpenetrated

markets such as London and Republic of Ireland,

and in FY26 we expect new store opening to

continue at a similar rates to those achieved over

the past two years.

By leveraging our leadership in card, we are

achieving good levels of growing celebration

and gift attachment rates as we continue our

evolution into a celebrations destination. Previous

work on our space optimisation programme

allowed in-store innovations such as stationery

and kids zones which helped contribute to

the strong growth seen from key expanded

categories. This approach is allowing us to further

unlock gift and celebration essentials range

expansion while maintaining our authority and

choice for card. This is supported by further

card range curation in-store to optimise choice

and release space for new and expanded gift

and celebration essential ranges. As we further

develop our marketing and trading strategy, we

are continuing to grow share of our 24 million

customers’ annual celebration spend, building on

the 1ppts growth in share of wallet we have seen

across the past two years.

In FY25, we secured new retail partnerships

while expanding existing contracts as seen

through our successes in Aldi and The

Reject Shop in Australia as well as our first

US wholesale agreement. By acquiring well-

established, accretive businesses, which

included Garlanna and Garven in FY25, wehave

been able to accelerate our plans to create an

international footprint. As we continue with

positive discussions with new prospective

partners in the UK, Republic of Ireland and other

international markets of interest, we took the

decision to refocus our partnership model in

the Middle East market. In the near-term we will

move from the current low-cost franchise trial to

broader wholesale agreements, leading to the

closure of the existing four franchised stores in

H1 FY26.

We have made progress building our online

presence as part of our omnichannel strategy.

We have stabilised and improved our online

platform and have a fuller understanding

of online growth and profit levers. With

the foundations for growth now in place,

werecognise that online requires further focus,

which is now underway.

People and culture

At cardfactory we use our cultural

transformation as a key growth enabler with our

priorities centred around customer, community

and purpose. Our customer and community

focus ensures our customers, sit at the heart

of our business. At the same time, it remains

vital for us to create an inclusive culture which

is empowered by exceptional leadership and

driven by passion and commitment. Keeping our

purpose at the heart of everything we do helps

us drive collective, collaborative decision-making

across the business.

Areas of focus in FY25 included colleague

induction and onboarding, internal mobility and

talent acquisition, and continuing to develop the

colleague experience. To ensure we maintain

our lowest cost to operate proposition and

reflecting the closure of gettingpersonal.co.uk,

we undertook a role restructure leading to a

headcount reduction of 49 roles in our support

centre and onlinefulfilment.

ESG progress

In FY25, we have continued the process of

embedding sustainability considerations across

the business, with key focus areas including

waste reduction through product design and

operational changes. We progressed our

greenhouse gas emissions reduction initiatives,

including a successful AI energy management

system trial across approximately 200 stores

with further rollout to 800 stores planned this

year. This forms part of our Net Zero pathway

activity which in FY26 will also include the

transition of our diesel van fleet to plug-in hybrid

EVs. We also evolved our ‘Giving Something

Back’ programme facilitating more opportunities

for colleagues to support local charities

and launching a new donation scheme for

discontinued stock.

For FY26, at a strategic level we have begun a full

supply chain climate risk review. Operationally,

we continue with our plastic reduction work,

eliminating bubble wrap use at Printcraft and

cellophane wrap from all own-label roll-wrap.

Summary

cardfactory continues to make good progress

delivering on our ‘Opening Our New Future’

growth strategy and at the same time we remain

proactive in managing inflationary pressures.

With robust operating cash flow and the

continued strength of our balance sheet, we

are well-positioned to confidently invest in our

growth ambitions.

Darcy Willson-Rymer

Chief Executive Officer

7 May 2025

See the Strategy in action section

onpages26-35.

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Card Factory plc Annual Report and Accounts 2025

OUR STRATEGY

‘Opening Our

New Future’

strategy

In FY25, we continued to deliver across all the building

blocks of growth within our ‘Opening Our New Future’

strategy. Progress highlights included the continued

growth of our store estate with expansion of our

gifts and celebration essentials resonating well with

customers. We continue to invest in the key strategy

ensuring we have the right capabilities, systems and

structures across thebusiness.

By delivering on the strategy, cardfactory

will become:

The omnichannel brand helping

customers every day to celebrate

life’s special moments.

The UK’s no.1 destination for all

customers seeking unrivalled

quality, value, choice, convenience

and experience.

A global competitor putting

cards and gifts in the hands

ofmorecustomers.

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Company Information

Value & choice

Retaining our UK leadership

position incards, while growing

our gift and celebration

essentialscategories.

Read more onpages 33-35.

Progress on our growth journey

continued at pace inFY25 with

further strong revenue growth.”

Darcy Willson-Rymer

Chief Executive Officer

We have a clear strategic direction with the

strategy as we continue with our growth

mission. Our strategic direction and the

building blocks of growth will ensure we

deliver on our vision to become a leading

global celebrations group.

‘Opening Our New Future’

Value & choice ExperienceConvenience

ManufacturingCreative

Scalable central

model, driving

organisational

efficiency

Insight-driven product,

design and creative content

publisher at the heart

of cardfactory IP

Ability to scale up

production to meet

increased demand in

line with projections

Enabling greater efficiency,

more agile practices and

the ability to do business

worldwide

Technology

Leadership

in card

Authority

in gifts &

celebration

essentials

Extensive

UK & Ireland

footprint

Digital

experience

innovation

Growing

international

presence

Customer

&community

focus

Passionate

colleagues

The leading omnichannel retailer in our sector with an extensive

UK & Ireland footprint and growing international presence

cardfactory

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Card Factory plc Annual Report and Accounts 2025

STRATEGY IN ACTION

Our transformation

into a leading

global celebrations

group combines our

leadership in card with

our emerging authority

as a destination for

gifting and celebration

essentials.”

Expanding into celebrations

as we evolve cardfactory

into the first choice for

celebrations.

Our transformation into a leading global

celebrations group combines our leadership

in card with our emerging authority as

a destination for gifts and celebration

essentials. By doing so, we are delivering on

the considerable opportunity for cardfactory

within an identified addressable UK market

ofc.£13.4 billion.

As we make progress on our strategic

ambition towards becoming a celebration

destination, we saw strong growth in gift

and celebration essentials through FY25,

having introduced new and expanded

gifting categories in the period. Like-for-like

(LFL) revenue growth in gift and celebration

essentials of +5.7% has also driven an

increase in average basket value (ABV)

of 6.7% compared to the previous year,

reflecting a continuing mix-shiftwith gift

and celebration essentialsrepresenting

more than more than half of total sales.

Strategic progress in FY25 included the

expansion of our gifting proposition across

stationery, toys, gift food and confectionery

as well as the expansion of our balloon and

party ranges where we are leaders in the UK.

Notable successes included strong year-

on-year (YOY) sales growth from the range

expansion of calendars and diaries (+20% LFL)

and baby gifting (+188% LFL).

We are maintaining our card market authority

and growing card volume. By carefully

curating our card range in-store, we are

both releasing space for gift and celebration

essentials expansion and responding to

customer needs by increasing speed to

market of new ranges and optimising choice

in several key categories with notable

successes in everyday and Christmas. An

example was regional ranging of ‘Mum/Mam/

Mom’ caption cards which drove a +69% YOY

growth across everyday and seasonal for

those cards.

To maintain our value credentials, we offer

cards from 29 pence while evolving the

average selling price through a considered,

intelligent approach that offers cards at

a range of price points as we know some

customers place a higher value on quality

and choice. This is supported by year-

round promotions that reinforce our value

credentials, while driving sales.

Continued work on improved sustainability

included transitioning all gift bags to be non-

laminated and recyclable, ensuring 100% of

UK and Far East manufactured cards were

recyclable and plastic free, and sourcing

closer to home where possible or meeting

carbon efficient requirements.

Value & choice

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Company Information

Building on

our status as

market

leader in

greeting cards

Interview with Brian

Waring, Executive Director

Customer and Commercial

Q: How is cardfactory

delivering on

its celebration

destinationvision?

By continually drawing

on customer insight, we are

driving range evolution and

space transformation in-store

to maintain our leadership

in card while considerably

expanding our gift and

celebration essentials offer.

1. Savanta BrandVue Feb 2024 to

Jan 2025.

Q: How will cardfactory

maintain its value

credentials?

Our pricing strategy

is built around intelligently

stretching average selling

prices with a ‘good’, ‘better’,

‘best’ approach that

ensures value for money

across all categories. Value

perceptions are reinforced

through relevant, year-

round customer promotions

with, for example, our 4 for

3 promotion contributing

+2ppts value perception

growth in April to May

well as driving sales growth

of +14% YOY over that

promotional period.

Q: What is driving

cardfactory’s continued

store estate success?

The most significant

contributing factor behind our

continued store estate growth

is the space optimisation

programme, which has

allowed us to maintain the

breadth and depth of our

leading card offer while

freeing up additional space

for our expanding gifting and

celebration essentials ranges.

The continued success of

this programme significantly

contributed to LFL Store

revenue growth of +3.4%

inFY25.

Q: How will cardfactory

sustain its leadership

incards?

In FY25, we continued

with our blended strategy

that optimises customer

choice with an easy to

curate range of cards while

intelligently stretching our

average selling price. This

ensures there is newness

across the range to broaden

customer appeal, and a

simplified in-store experience.

Our transformation into a leading global

celebrations group combines our leadership

in card with our emerging authority as a

destination for gift and celebration essentials.

By building on our status as market leader

in greeting cards, we will support more

customers in celebrating more of life’s

moments by delivering a strong celebrations

offer, enabling capture of a greater share of

our customers’ annual celebration spend.

Currently, our 24 million annual customers

spend less than 10% of their total annual

store-based purchases for celebration

occasions in our stores. Over the past two

years we have grown our share of wallet by

1ppts and expect to continue growing at a

similar rate as we have done over that period.

Progress in FY25 included the expansion of

our gifting proposition with 70% of gift ranges

new for FY25. This included new ranges across

stationery, kids gifts & toys, baby gifts and

gift food/confectionery. Notable successes

included strong YOY sales growth from the

range expansion of soft toys (+41% LFL),

confectionery (+38% LFL), calendars and

diaries (+20% LFL) and baby gifting (+188%

LFL). We also saw strong sales growth from

the expansion of our balloon and party

ranges, increasing choice for our customer

by covering a breadth of celebrations, with

party range expansion in Eid, Confirmation

& Communion and Pride to name a few. At

the same time, we have been maintaining

our card market authority responding to

customer needs and broadening our appeal

by optimising choice in several key categories.

Growing our share of celebrations spend

CASE STUDY

Examples include more choice of classic and

contemporary styles, which work particularly

well in the key seasons of Valentine’s Day and

Mother’s Day as well as our general birthday

ranges. This was alongside new innovation

throughout the ranges such as where we

introduced regional ranging of ‘Mum/Mam/

Mom’ caption cards leading to +69% YOY

growth across everyday and seasonal sales

for those cards.

By continually drawing on customer insight,

we are driving range evolution and space

transformation in store to maintain our

leadership in card, while considerably

expanding our gift and celebration

essentials offer.

Brian Waring

Executive Director

Customer and

Commercial

Read more about

‘Value & choice’

online

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Card Factory plc Annual Report and Accounts 2025

STRATEGY IN ACTION CONTINUED

Initiative Objective Progress Results Next steps

Leadership

in card

Retaining position as the UK’s

leading provider of cards.

• Maintained value for money proposition with

cards still starting from just 29 pence.

• Evolved the average selling price intelligently,

while delivering year-round relevant promotions

including new 4 for 3 mechanic across all

singlecards.

• Optimised customer choice with easy to shop

curated card ranges.

• Increased sustainability across card ranges.

• Boosted speed, efficiency and impact of newness

in response to customer needs.

• Simplified store plans.

• Continued positive performance in

everyday and seasonal card ranges,

with +0.7% LFL growth.

• Optimisation of choice drove strong

regional card growth of ‘Mam’ and

‘Mom’ cards of +69%.

• Increased average selling price drove

+6% sales growth.

• New 4 for 3 promotion drove

strong sales growth with first period

delivering +14% YOY sales growth in

May 2024.

• Grow card market authority through

continued range development

and curation, including further

tailored ranges by regions and

demographics, to further improve

customer choice and value-for-

money promotionaloffers.

Authority

in gift and

celebration

essentials

Grow market share within

c.£12 billion gift and

celebration essentials market.

• Continued growth of gift and celebration essentials

categories, which is now significantly over half of

oursales.

• Expanded ranges included large gifting proposition

across stationery, toys,gift food and gift vouchers,

and expanded balloon and party ranges.

• Optimised choice of wrap and bags with expanded

‘good’, ‘better’, ‘best’ ranges.

• Improved sustainability of gift and

celebrationessentials.

• Space realignment continued to provide more

space for gift and celebration essentials without

compromising breadth and depth of card offer.

• Strong growth in our gift and

celebration essentials ranges of 5.7%

LFL, including double-digit growth

in categories such as stationery,

calendars and diaries, and baby

gifting.

• Continue to focus on growing UK

market share of c.£12 billion gift

and celebration essentials market

with further expansion of key

categories alongside further space

optimisation for growth ranges.

Value & choice

Leadership in card and growing authority in gift and celebration essentials

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Strategic Report Governance Financial Statements

Company Information

Providing cardfactory

customers with an

exceptional, seamless

shopping experience

in the UK and

internationally.”

Convenience

Delivering an exceptional,

seamless shopping

experience in the UK and

internationally.

We are continuing to grow and optimise our

UK & Ireland retail footprint to support both

our evolution into a celebrations destination

and to fulfil our omnichannel ambition.

Through both targeted acquisitions and new

and extended relationships, FY25 was another

successful growth year for our UK and

international partnership programme.

Our UK & Ireland store estate grew by a

further 32 net new stores as we continue to

expand our points of presence through data

driven white space opportunities. Within our

stores, space realignment has increased gifts

and celebration essentials space by 16%,

while successfully maintaining card sales

through the careful curation of ranges and by

using new fixtures to improve density by 9%.

This has allowed in-store innovations such

as stationery and kids zones which helped

contribute to the strong growth seen from key

expanded categories: gifting (+40%), soft toys

(+32%), and stationery (+18%).

Omnichannel progress continued through the

further refinement and improvement of our

Click & Collect service. Encouragingly, Click &

Collect average order values are 55% higher

than online orders.

We made the difficult decision to close our

Getting Personal website in January 2025, so

that we can focus growth and investment into

cardfactory.co.uk. The cardfactory.co.uk saw

sales growth of 0.1% as we continue to focus

on driving profitable growth through higher

margin product ranges.

The expansion of our partnership programme

was a particular highlight in FY25 with two

acquisitions helping to build further on our

international expansion plans. An important

strategic milestone was the acquisition

of Garven, a leader in the design and

wholesale of gift and celebration essentials

in the US. Together with the signing of a

separate wholesale supply agreement with

a nationwide US retailer, the acquisition of

Garven establishes a physical presence in

the US market. In addition, we completed

the acquisition of Garlanna, a publisher and

wholesaler of greeting cards, wrap and gift

bags in the Republic of Ireland.

Building on existing partnership agreements,

we renewed our multi-year partnership with

The Reject Shop in Australia, including an

extension to a full-service model and seasonal

range supply. Nearer home, we secured

a multi-year agreement with Aldi to be an

everyday greeting card supplier across the

full UK & Ireland estate. Having moved from

a supply only to full-service contract, we are

now extending our relationship with Aldi to

include seasonal card ranges and testing our

first non-card ranges with gift bags trialled

during the Christmas 2024 season.

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Card Factory plc Annual Report and Accounts 2025

STRATEGY IN ACTION CONTINUED

Syed Kazmi

Executive Director

Business Development

Interview with Syed

Kazmi, Executive Director

Business Development

Q: What progress has

cardfactory made on its

partnership ambition?

In FY25, we built on

our existing partnership

relationships, transitioning

both The Reject Shop and

Aldi to full service contracts.

In addition, we signed our

first supply contract in the US

with a nationwide retailer in

time for the Christmas season

with everyday ranges now

introduced in a number of

trial stores.

Q: How have

acquisitions unlocked

our partnership

opportunities?

Our targeted acquisitions

in South Africa, the Republic

of Ireland and most recently

in the US, open relevant

growth opportunities

within those markets. The

acquisition of SA Greetings

means we are a significant

wholesale card supplier in

that region. We have also

realised a new channel of

wholesale supply within the

Republic of Ireland through

the acquisition of Garlanna.

In the US, Garven has

strategic gift and celebrations

essentials wholesale

relationships with several

major US retailers and we

are confident in our ability to

develop further relationships

while also expanding into a

card offer.

Q: What partnership

successes have we

enjoyed in the UK

inFY25?

A highlight of our

partnership programme in

FY25 was the success of our

relationship with Aldi where

we are now an everyday card

supplier in every store in the

UK & Ireland, now 1,200 Aldi

stores, up from 500 stores.

We have demonstrated our

ability to serve a major UK

retailer with the right range

of curated cards and are now

trialling our first celebrations

essentials ranges.

Q: What’s next

for cardfactory’s

international

partnership programme?

While we will continue

to expand in our selected

international markets, there

will be a significant focus on

developing our US operation.

Enabled by the acquisition of

Garven, we are well placed

to grow within the largest

celebrations market with an

estimated £65 billion value.

As an everyday card partner, we have also

moved from a supply-only contract to

full service support using merchandising

expertise to ensure we are maximising

opportunities for everyday card.

Working in collaboration with Aldi and

building on both internal and external

insights, we completely redesigned a new

card range to best meet the needs of the busy

Aldi shopper. As part of this closer working

partnership we are also now supporting

Aldi with in-store merchandising, equipment

audits and updates to improve the customer

experience in-store.

As a result of both this new range and

operational enhancements, both Aldi and

cardfactory have seen significant YOY

improvements and we continue to work

collaboratively to continuously improve and

evolve the customer offer for the future.

In addition, we are now also supplying some

own-label seasonal products, starting with gift

bags for Christmas 2024 and progressing to

both cards and gift bags for Mother’s Day and

Father’s Day 2025. We will continue working

with Aldi to grow this area of our partnership

throughout FY26.

In FY25, we extended our relationship with Aldi

in the UK & Ireland from the initial contract for

c.500 stores to their full 1,200 store estate.

CASE STUDY

The Aldi relationship demonstrates the

potential for successful partnership

opportunities in the UK & Ireland. We are

reaching new customers on shopping

missions that we are not able to support

through our existing store estate and

leveraging the full end-to-end design,

manufacturing and distribution capability

of our UK operation. As a result, Aldi

customers benefit from a carefully curated

range of high-quality, value cards with the

opportunity to extend the offer into gift

and celebration essentials as we evolve into

acelebrationsprovider.

Company Information

Convenience

Digital experience and innovation

Initiative Objective Progress Results Next steps

Omnichannel

services

To connect our online

and retail channels

to give customers

more choice in how

they shop with us

and a consistent and

seamless experience

across alltouchpoints.

• Continued to refine and improve national Click &

Collectservice.

• Just Eat trial launched across 43 stores to understand

demand for rapid delivery.

• POS upgrade programme with initial trial stores launched

before Christmas.

• Click & Collect average order value

(‘AOV') 55% higher than average online

AOV.

• Just Eat trial demonstrated ability to pick

from store, and delivered AOV of >£9.

• Balloon appointments trial from

Q1FY26.

• Working towards a pick-from-

store solution that will enable

same day collection.

• POS upgrade/replacement

enabling future omnichannel

capabilities suchas endless

aisle.

Range

expansion

To generate

incremental sales

by expanding the

online range into new

categories.

• FY25 focus on expanding online celebration essentials range.

• Added four new drop-ship partners offering premium

personalised balloons, personalised tableware and

decorations, life-size cardboard cut-outs and a range of

fancy dress costumes.

• Incremental sales generated. • Expansion of personalised

cardrange.

• Continued expansion of

celebrationessentials.

Online

customer

experience

To make it easy for

customers to create

unique celebrations

on our website

andapp.

• Wide range of findability enhancements to improve

navigation, filtering and search.

• Complete redesign and rebuild of the basket and checkout

to remove friction points, enhance customer experience and

enable futurecapabilities.

• Introduced ability to select a nominated delivery date for

third-party flowers and balloons.

• Rebuilt calendar personalisation and online event

reminderjourneys.

• Increased conversion rate optimisation programme, with

new tooling introduced.

• Customer service contacts continue

to reduce YOY as a percentage of

sales based on improving customer

experience and doorstep delivery.

• 32% growth in app sales YOY. App now

accounts for 10% of online sales, up

from 8% last year.

• Ongoing findability

improvements.

• Nominated day delivery to

facilitate direct to recipient

missions.

• Product personalisation

journeyimprovements.

• Refine product

recommendations.

Customer

growth

To drive profitable

sales growth and

improve customer

lifetime value through

effective customer

acquisition and

retention strategies.

• Development of customer leaky bucket and optimal pipeline

models to drive focus in total active customer growth.

• Regional trial undertaken to drive awareness and acquisition

of store customers to personalised cards online.

• Expanded affiliates programme – Student Beans

partnership.

• Dialled up focus on retention through CRM journeys and

initiatives around event reminders, App and opt-in rate.

• Full online range review with new margin targets and range

rationalised to support higher-margin position. Focus on

building a range that works for long-term online success.

• Sustained customer growth of +9%.

• Increased App downloads and usage –

now accounting for 10% of total online

sales versus 7% in FY24.

• Growth in Event Reminders: +47.5%

YOY.

• >10% improvement in gross margin

rateYOY.

• Monitor shopping behaviour of

customers recruited via store

flyers and affiliate promotions

to determine lifetime value and

payback. Further testing in FY26.

• Ongoing focus on optimising

store product range sold online.

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Card Factory plc Annual Report and Accounts 2025

STRATEGY IN ACTION CONTINUED

Convenience

Extensive UK & Ireland footprint

Growing international presence

Initiative Objective Progress Results Next steps

Store

evolution

programme

In-store improvements to

make shopping our gifting

range easier, improve store

navigation and overall

appearance.

• Space realignment initiative rolled out across

a total of 800 stores by end of FY25.

• Card space reduced by 7%, gift and

celebration essentials space increased

by16%.

• Total FY24 and FY25 cumulative sales

contribution of £12 million.

• Trial ‘radical space’ initiative to

further optimise space in store

around shopper missions.

Relocation

strategy

Continually adapt to changing

consumer footfall trends and

ensure exceptionally few

loss-making stores.

• Continue with our core principle of lower

cost, flexible leases with a target three-to-

five-year break clause.

• Less than 1% of the retail estate is loss

making providing the business with an

exceptionally strong store portfolio.

• Continue with relocation

programme.

Central

London

stores

Develop London store format

as underpenetrated market.

• Continued to test ranges. • FY25 saw LFL sales growth of +9.7%. • Continue to look for further

opportunities within London market

to continue space and range test.

Republic

of Ireland

stores

Expand Republic of

Ireland store portfolio as

underpenetrated market.

• Opened a further eight stores in FY25. • All stores achieving profitability targets. • Open further stores in Republic

ofIreland.

Initiative Objective Progress Results Next steps

UK & Ireland

partnerships

Secure UK wholesale partners

that extend our UK distribution

point reach.

• Full rollout across Aldi’s entire UK & Ireland

estate of 1,200 stores in FY25 and move to full

serviceoffer.

• Profitable contribution from existing

and new partnerships.

• Identify additional partners in the

UK & Ireland.

International

partnerships

Secure franchise and

wholesale partners across

our international markets

ofinterest.

• Signed first US partnership agreement and

moved to full service agreement with The Reject

Shop in Australia.

• Acquired Garven in the US and Garlanna in the

Republic of Ireland.

• Profitable contribution from existing

and new partnerships.

• Successfully integrated Garven and

Garlanna into the Group.

• Identify additional partners in our

international markets of interest.

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Company Information

Experience

Ensuring that both the

customer and colleague

experience delivers on our

values and brand promise

as a celebrations brand.

Delivering an exceptional experience for

our customers is at the heart of our brand

promise as a celebrations retailer. With

customer-centric thinking already embedded

at the heart of our decision-making, we are

continuing on our customer experience

journey that began in FY24 with the launch

of ‘The cardfactory Way’ training programme.

It is designed to transform the way colleagues

engage customers in-store, making them feel

‘welcomed’, ‘wowed’ and ‘won over’.

In FY25, we launched a new component of

‘The cardfactory Way’, which was designed to

elevate our in-store performance by focusing

on leadership capability and helping them

develop their team’s customer-centricity.

To further improve store standards, we

launched the ‘Set to Celebrate’ programme

which is helping make it easier for our

customers to shop in our stores and meet

their celebrations needs. Through this

programme, we are delivering a consistency

of service, promotions, merchandising and

store atmosphere, no matter the size or

location of store.

Our journey of cultural transformation

continued through FY25 with areas of focus

including induction and onboarding, internal

mobility and talent acquisition, and continuing

to develop the colleague experience.

Pay and benefits is an area we continue

to improve, ensuring we retain and attract

new talent, while ensuring all colleagues are

rewarded fairly, inclusively and competitively.

We continue to pay at the middle of the

market, although balancing the pay pressures

has meant that we have not been able to

further invest in our benefits offer, although,

we have been able to leverage some

additional benefits from existing suppliers.

Delivering an exceptional

experience for customers

and a values-led culture

of accountability and

empowerment.”

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Card Factory plc Annual Report and Accounts 2025

Steve Lilley

Executive Director

Retail Operations

Interview with Steve

Lilley, Executive Director

Retail Operations

Q: How is cardfactory

improving the customer

experience in-store?

We continue to develop

‘The cardfactory Way’

customer experience training

programme which this year

was expanded to focus on

store leadership capability.

As we pivot to celebrations as

a business, we are helping to

develop our store colleagues

into celebrations experts,

with our ‘Set to Celebrate’

store standards programme

ensuring a consistent

customer experience across

our entire store estate.

Q: How are you

supporting the

colleague training?

‘The cardfactory Way’

customer experience

training programme now

includes training tools in

the form of coaching cards

that helps reinforce and

embed best practice. These

are supported by a range of

initiatives including colleague

awards and recognition,

service observation records,

and a regular newsletter

that focuses on service

improvements.

Q: How are you

measuring success?

Success is measured

through both a customer

feedback forum and our

mystery shopper programme

which is driving positive

change.

STRATEGY IN ACTION CONTINUED

Q: How are you

supporting the pivot

to celebrations?

All colleagues are

focused on delivering our

brand purpose of making

sharing in and celebrating

life’s moments special and

accessible for everyone. For

store colleagues especially,

this means training

development to ensure they

are celebration experts,

helping them engage our

customers to understand

the life moment they want

to celebrate and ensuring

that we help them source the

products they need to make

that celebration as special

aspossible.

In a highly competitive and challenging

retail environment, we need to ensure that

whatever our customers are celebrating,

cardfactory is able to deliver. That means

transforming our teams into celebration

experts and providing a consistent,

exceptional shopping experience in each

and every cardfactory store.

Our ‘Set to Celebrate’ initiative was launched

in FY25 to deliver on this need, refreshing

store standards in terms of service,

promotions, look and feel, merchandising,

pricing and in-store atmosphere regardless of

size, location or age of store. Through training

and store assessment, the ‘Set to Celebrate’

initiative empowers store colleagues to make

improvements in every aspect of their store.

By taking a customer-centric approach, ‘Set to

Celebrate’ puts store colleagues in the shoes

of their customers, letting them understand

the shopping journey from first impressions

at the shop door through to navigating the

store to fulfil their celebration needs. As well

as clear and accessible merchandising, ’Set

to Celebrate’ helps reinforce our value and

quality credentials through clear promotional

display and clean and clear product ranging

throughout the store.

‘Set to Celebrate’ ensures consistent and

exceptional store standards for all our customers.

CASE STUDY

Through ‘Set to Celebrate’, colleagues

present on the shop floor are interacting with

customers and making recommendations

following ‘The cardfactory Way’ customer

experience training. This is supported by our

‘5 power plays’ training, which is reinforcing

how we welcome, wow and win over each

and every customer in our stores, using the

mantra: “we can’t control how a customer

feels when they enter our store, but we can

influence how they feel when they leave.”

about ‘Experience’

online

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Strategic Report Governance Financial Statements

Company Information

Experience

Customer and community focus

Initiative Objective Progress Results Next steps

Pay and

benefits

Focus on reward to

enable us to attract

and retain talent and

a philosophy of being

market-led.

• Continued with pay philosophy of being

‘at market’ by applying our pay review

considering individual circumstance versus

midpoint data, while also considering ongoing

economic challenges.

• Successfully rolled out our SAYE scheme to

store colleagues in the Republic of Ireland.

• Continued investment in our colleague

proposition and a pay framework and principles

to ensure fairness and consistency.

• A pause on our benefits offer with an intention

toreview in FY26.

• Build out a strategic reward roadmap aligned

withstrategy.

• Review our benefits offering and make

recommendations for enhancements.

• Review our family friendly policies to ensure

wearecompetitive.

Leadership Our emphasis

on leadership

development

continues to support

on delivering

ourstrategy.

• Clearly defined talent and succession

approach which enables planning for success

as well as mitigating risk by identifying clear

successors and clear gaps.

• We achieved an attrition rate (a significant KPI) of

29.1% (target35.1%).

• We have maintained opportunities for

secondments across our colleague populations.

• To continue to embed ‘Leading others’ programme

through all business areas including coaching

leadershipskills.

• To identify organisational-wide leadership capability

gaps and provide development opportunities.

Colleague

experience

To elevate the

colleague experience,

weaving our purpose

through everything

that we do.

• Improved our induction and onboarding

processes embedding the spirit of celebration

through key colleague moments during

onboarding.

• Rolled out our new colleague induction

programme ‘Welcome to the Party!’ – a brand

aligned experience that ensures every new

colleague feels welcome from day one.

• Fully implemented a model of direct sourcing

with a focus on candidate experience and less

emphasis on using agencies – this has meant

significant cost saving alongside attracting and

retaining the right talent.

• In FY26, we will work towards creating a shared

service model to ensure an excellent colleague

experience and efficiency of service.

• We will invest intechnology in an HR information

system (HRIS) transforming people processes and

practice.

• We will use colleague experience principles and brand

work tobring celebration to life.

Passionate colleagues

Initiative Objective Progress Results Next steps

Customer

experience

programme

Improve customer

experience instore.

• Continued with the development of ‘The cardfactory

Way’ customer experience training programme

totransform the engagement of customers in store.

• Launched new ‘Set to Celebrate’ component

of ‘Thecardfactory Way’ focused on improving

leadership capability across our stores.

• Mystery shopper programme indicates sustained

high levels of satisfaction at75.8%.

• Further customer experience

programme developments planned

for FY26 and beyond.

ESG Continue to build upon our

environmental social and

governance (ESG) credentials

with our aim of being

recognised as a socially and

environmentally responsible

business.

• Strategic focus on embedding sustainability

considerations across the business.

• Continued greenhouse gas emissions reduction

initiatives.

• Evolved our ‘Giving Something Back’ community

programme.

• Successful AI energy management system pilot;

planned rollout to 800 UK sites.

• Cross-business focus on waste reduction through

product design and operational changes.

• Further community engagement, including store

donation scheme for discontinued stock.

• Develop key action plan for Net Zero

pathway.

• Confirm renewable energy transition

plans.

• Begin supply chain climate risk review.

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Delivering a sustainable future at cardfactory.

Card Factory plc Annual Report and Accounts 2025

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

At cardfactory, we combine our focus on

maintaining value and business growth

with our commitment to play our part in

protecting the planet, communities and

the people within them, and to manage

the impacts of environmental and social

changes on our business and supply chain.

Our approach to this is outlined in our

‘Delivering a Sustainable Future’ plans,

published in FY24. This section of the report

provides an update on progress towards

our sustainability commitments and plans

forFY26.

Our focus in FY25 was on continuing the

process to embed sustainability considerations

across cardfactory’s strategic planning

and operations. Our business strategy

review provided an opportunity to deepen

our understanding of the sustainability

implications and opportunities of our

ambitious growth plans.

Our teams also examined ways of working

across UK and international operations to

identify, measure and plan for environmental

and social risk, and ensure we can quickly

understand and deliver on opportunities

to do things differently to minimise our

environmental impacts.

This work has enabled us to streamline and

strengthen how we operate as a business

day-to-day, and to further strengthen our

sustainability governance structures.

Our focus in FY25 was

on continuing to embed

sustainability considerations

across cardfactory’s strategic

planning and operations.”

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Our ‘Delivering a Sustainable Future’ strategy

Climate Waste &

Circularity

Protecting

Nature

People

& Equity

Governance

We will play our part in tackling

the climate crisis, adapting our

business to achieve Net Zero and

remain resilient.

Company Information

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Card Factory plc Annual Report and Accounts 2025

How did we do?

Achieved

In progress

Still to be achieved

ESG CONTINUED

Climate

We will play our part in tackling the climate crisis, adapting our business to achieve

NetZero and remain resilient.

Goals

• Become a Net Zero business

by2050.

• Deliver our science-based

near-term targets:

– Reduce absolute Scope 1 and

2 GHG emissions by 54.6%

by 2033

– Reduce Scope 3 emissions

by 61.1% by 2033 on an

economic intensity basis

• Align top suppliers to

cardfactory Net Zero targets.

FY25 progress highlights

• Scope 1 and 2 GHG emissions inventory complete (see pages 54 and 55):

– Scope 1 emissions:

– UK absolute emissions have decreased by 1.7% against a backdrop of continued business

growth

. The emissions intensity has also remained constant.

– From FY24 to FY25, UK emissions have decreased by 16%. It should be noted this

reduction is predominately due to exceptional FY24 emissions caused by faulty

air conditioning equipment (replaced in FY24) and the theft of Printworks air

conditioning units, which resulted in the loss of refrigerant gas.

– Rest of world (ROW) emissions have increased from 3 to 475 tCO

due to acquisition

of subsidiaries outside the UK

– Scope 2 emissions:

– UK Scope 2 emissions have increased by 11.8%, reflecting the growth of the

business

– From FY24 to FY25, UK Scope 2 emissions have decreased by 2.4% due to the

investment in LED lighting.

– ROW emissions from Scope 2 have increased year on year from 45 to 1,070 tCO

due to acquisitions.

– The Group is currently auditing Scope 3 emissions inventory for 2022-2024. Thisaudit

considers recent structural changes due to acquisitions, which have reached the

materiality threshold to trigger the re-baseline policy. Accordingly, the business

isworking to understand the impact of these structural changes on the base year.

• LED rollout now complete across cardfactory stores (excludes acquired companies),

distribution centres and support buildings, with store stock room space lighting to be

upgraded as part of future ongoing refurbishment programme.

• Completed successful trial of an artificial intelligence (AI) energy management platform

across

198 cardfactory sites; results showed potential for annual kilowatt-hour (kWh) energy savings

equivalent to powering 35 stores for a year if implemented across 800 sites.

• Renewable energy transition planning is underway, with options including corporate power

purchase agreement under review.

• Completed current climate change impact risk review for Printcraft manufacturing,

andUK& Ireland stores (no material risk identified).

• Completed review of sustainability considerations as part of business planning and strategy

review process, with action planning now underway.

Plans for FY26

• Transition cardfactory diesel

van fleet to PHEV (plug-in hybrid

electric vehicles), reducing total

average emissions by 144 tCO

per annum.

• Begin supply chain climate

impact risk review, including

manufacturing and logistics.

• Develop key action plan for

NetZero pathway.

• Continue to work with our top

suppliers to discuss emissions

reduction opportunities as a key

contributor to near-term targets.

• Rollout AI platform across

approximately 800 UK

cardfactorysites.

For additional information on

Climate, please see TCFD (Task

Force on Climate-related Financial

Disclosures) on pages 44 to 55.

1. Compared to 2022 baseline.

2. AI platform analyses site-specific energy

consumption behaviour and provides site teams

with immediate alerts of issues and advice on

how to fix them.

The results of this year’s

artificial intelligence (AI)

energy management trial

have been a real gamechanger

for cardfactory, driving

behaviour change within

our sites, which in turn has

improved energy efficiency.”

cardfactory

Head of Construction and Maintenance

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Company Information

How did we do?

Achieved

In progress

Still to be achieved

Waste & Circularity

We will continue our journey to become a circular business by redesigning products and

packaging, using fewer materials and finding new ways to increase recycling, recovery

and re-use of our products.

Goals

• Find opportunities to use less

materials and reduce waste across

our business.

• Identify initiatives and

partnerships to address product

end of life.

• All new gift bags and gift boxes to

be 100% recyclable by end of FY25.

FY25 progress highlights

• 100% recycled materials being introduced for own-label soft toy fillings, with transition

to be complete by end of FY26.

• All new own-label party tableware, gift boxes and gift bags (excluding handles) now 100%

recyclable (handles will also be 100% recyclable by end of FY26 across all core ranges).

• Implemented in-store printing for basic materials including labels and range plans,

replacing need to print centrally and issue to stores, reducing packaging waste and

distribution emissions.

• Reduced use of bubble wrap across our Printcraft facility by 80.3% since FY22.

• All primary and secondary packaging developed to reduce impact to environment

inline with Extended Producer Responsibility of Packaging legislation.

• Launched charity donation programme for discontinued stock across all cardfactory

stores, reducing waste to recycling and landfill.

Plans for FY26

• Review all product packaging

tounderstand full environmental

impacts of moving from plastic

toalternative materials, informing

approach moving forward.

• All new own label roll wrap to

befully recyclable and cellophane

wrap removed by end of FY26.

• Continue to reduce use of bubble

wrap at Printcraft.

Changes to recycling laws in the past 12 months have created some

unexpected opportunities for store teams in England and Wales to

share learnings across regions. This collaboration sparked ideas

on ways to update processes and ways of working to not only curb

waste levels and improve tracking, but also reduce emissions and

manage costs by consolidating waste collections. These positive

changes would not have happened without the enthusiasm and

engagement of our colleagues.”

cardfactory

Head of Business Improvement

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Card Factory plc Annual Report and Accounts 2025

How did we do?

Achieved

In progress

Still to be achieved

Protecting Nature

We will operate in a way that reduces harm to our planet and helps restore

ournaturalenvironment.

1. One roll-wrap supplier

isPEFC (Programme for

the Endorsement of Forest

Certification) certified

inplaceof FSC.

2. Partnership runs October

2022–October 2025.

Goals

• All cardfactory paper party

products to be FSC-certified by

endof FY25.

• Identify and mitigate impacts

ofour business on nature.

• Woodland Trust partnership

toplant more than 12,000 native

trees in the UK, mitigating up

to 3,200 tonnes of CO

during

trees’lifetime.

FY25 progress highlights

• All cardfactory paper party products now FSC certified, including own label tableware,

gift bags, roll wrap

and gift boxes.

• Scoped requirements for nature impact review of our supply chain activity. Review

now deferred to FY27 given need to encompass European Deforestation Regulation

(EUDR) requirements.

• Initiated discussions with suppliers around EUDR compliance.

• Donated £240,000 over three years

in partnership with the Woodland Trust, to enable

the planting of approximately 35,000 native trees, which are expected to remove

9,238tonnes of carbon dioxide from the atmosphere over their lifetime.

Plans for FY26

• Ensure all products in scope are

compliant with EUDR regulation

byDecember 2026 if importing

intothe EU.

Protecting nature is important to

cardfactory, and we are committed

to understanding and reducing

our impact on the environment.

Our journey has already begun

with initiatives such as achieving

FSC certification, redesigning our

products and partnering with the

Woodland Trust. These steps lay

the foundation for our efforts,

and we will continue to refine

and develop our strategy to drive

meaningful change.”

cardfactory

Sustainability Manager

ESG CONTINUED

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FY25 progress highlights

• Engaged colleagues on our sustainability strategy, and connected this to each business

function through strategy deep dives, awareness and engagement sessions.

• Improved colleague experience framework by aligning to brand strategy.

• Launched ‘Count Me In’ campaign to gather diversity data in March 2024, enabling us

toset new insight-based targets.

• Completed colleague training as part of family friendly employer accreditation.

• Delivered next phase of reward and benefit roadmap, including increasing colleague

discount to 25%, expanding availability of holiday purchase scheme and relaunching

‘reward gateway’ portal.

• Delivered targeted talent activity for colleagues identified as high potential, including

career progression plans to support internal mobility.

• Completed business assessment to receive Level 1 on government Disability Confident

Employer scheme, and made commitment to progress to Level 2.

Goals

• Continue evolving cardfactory

culture and enhance our colleague

experience journey.

• Gather colleague diversity data

to ensure our strategy and

activity reflects our colleague and

customer communities.

• Continue to support colleagues

with our comprehensive wellbeing

offer, covering mental, physical

and financial wellbeing.

For more on our colleague

initiatives, please see Our

colleagues within our Stakeholder

section on page 59.

Plans for FY26

• Launch Diversity, Equality and

Inclusion (DE&I) policy and refreshed

strategy, including refocus on

disability and accessibility initiative, to

reflect colleague data.

• Continue current programme

to embed purpose, values and

sustainability commitments.

• Maintain existing colleague wellbeing

programmes, including encouraging

take up of our Employee Assistance

Programme, and Mental Health

FirstAiders.

People & Equity

We will actively champion the wellbeing of everyone within our business, our supply

chain and our communities by creating an environment that allows them to thrive.

How did we do?

Achieved

In progress

Still to be achieved

Our colleagues

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Card Factory plc Annual Report and Accounts 2025

Our communities

Goals

• Continue to support The Card Factory

Foundation.

• Continue to identify and support

charity and community partners that

align with our values and business.

• Continue to support colleagues

who are engaged with local causes

andcharities.

FY25 progress highlights

• Donated £444,000 to Macmillan Cancer Support, taking the total raised since 2006

tomore than £8.7 million. We also partnered with Macmillan to design and produce

arange of updated ‘thank you’ cards to send to supporters.

• Donated more than £1.4 million to The Card Factory Foundation, contributing to the

Foundation’s Match Fund, Community Grant Fund and Family Fund.

• Generated a total of £125,000 in UK boxed Christmas card donations for Alzheimer’s

Society, Mind, Macmillan Cancer Support and Teenage Cancer Trust.

• Developed special edition East17 Christmas card, with 25 pence per card sold donated

to Nordoff and Robbins to support music therapy for people facing life-limiting

illnesses, disabilities, social isolation and mental health challenges.

• Donated discontinued stock to local charities and community organisations including

local schools, hospitals, hospices, nursing homes, homeless shelters and military

support organisations through new ‘Giving Something Back’ store programme

(seeWaste & Circularity on page 39).

• In response to colleague feedback, enhanced the opportunities for colleagues to

support our local communities across the UK & Ireland as part of our ‘Giving Something

Back’ activity, which included facilitating more colleagues to spend time supporting

charities close to them, and nominating local charities as recipients from a new

Community Fund of The Card Factory Foundation.

Plans for FY26

• Continue to support The Card Factory

Foundation and charitypartners.

• Support further colleague

involvement in community

engagement by building

awareness across the business and

encouraging fundraising activity

through accessible ‘how to’ guide

and annual activity planner.

ESG CONTINUED

People & Equity continued

We will actively champion the wellbeing of everyone within our business, our supply

chain and our communities by creating an environment that allows them to thrive.

How did we do?

Achieved

In progress

Still to be achieved

£8.7m

Total amount raised since 2006

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Strategic Report Governance Financial Statements

Company Information

Governance

We will operate with transparency and integrity, embedding

sustainability in everything we do.

Strategic Report Governance Financial Statements

Sustainability governance

Our sustainability strategy is supported

by a clear governance structure, which

provides the necessary oversight, drives

sustainability principles through our business,

and ensures environmental and social risk

is understood, measured and managed as

needed. Our sustainability strategy remains

in line with the results of our 2023 materiality

assessment refresh and will need to evolve

to incorporate any additional considerations

raised by our South African, US and Republic

of Ireland acquisitions once these are fully

understood. This approach ensures that our

sustainability focus reflects the dynamic nature

of our business environment and emerging

considerations posed by our growth plans.

During FY25, we further strengthened

our governance structures around

sustainability risk identification, mitigation

and oversight. Our Group risk review process

now incorporates a biannual review of

sustainability-specific risks with our Head of

Internal Audit & Loss Prevention, with any

risks evaluated as material incorporated into

our Group Risk Register for Board oversight.

This process moves us towards our goal

of constantly monitoring both existing and

emerging sustainability-related risk either to

the business or posed by the business, and

that the Board is aware of any significant risk

and mitigation plans.

We maintain clear sustainability ownership

structures at Board and senior leadership

team level. cardfactory’s Chief Financial

Officer provides oversight and challenge on

our approach to sustainability, reviewing

activity every month and leading the

Board in assessing strategy, progress and

risks on a six-monthly basis. At the senior

leadership team level, cardfactory’s CEO

has ultimate accountability for the Group’s

sustainability approach. Our Executive

Director remuneration structures include

an ESG underpin, whereby up to 10% of

earned bonus is dependent on making

sufficient progress on delivering our ESG

commitments, and long-term incentive

awards include an ESG underpin, with each

incentive arrangements further strengthening

accountability across our leadership.

Our sustainability strategy and goals

are fully transparent, and an operational

plan is now in place to embed sustainability

and associated ownership for action through

our business. This is managed by our

sustainability manager and delivered by

a Sustainability Steering Group, including

representatives from each business function.

Company Information

For more information see the Corporate

governance report on pages 80-86.

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Card Factory plc Annual Report and Accounts 2025

CLIMATE CHANGE AND TCFD

This section of the Annual Report details the

Group’s climate-related financial disclosures,

in compliance with the Companies (Strategic

Report) (Climate-related Financial Disclosures)

Regulations 2022. The disclosures adhere to

LR 9.8.6R (8) and, as such, are aligned with

the recommendations of the Task Force

on Climate-related Financial Disclosures,

published in 2021.

Through qualitative analysis of climate-

related risks, the Group has determined

that, in the short term, the financial impact

of climate change on the business is low

in regard to both physical and transitional

risks. cardfactory has assessed that climate

risk, in the short-to-medium term, will not

have a material impact on the business,

considering both likelihood and impact. This

also reflects the Group’s implementation of

mitigation strategies including our ‘Delivering

a Sustainable Future’ strategy and operational

practices that reduce the impact of extreme

weather events.

While climate change does not currently

present a significant risk to our financial

position, in order to ensure we maintain a

focus on this issue, ‘ESG compliance and

climate change’ has been designated as

a strategic business risk.

This risk is defined as a failure to meet ESG

requirements and expectations, which will

result in an adverse impact on reputation.

This designation enables the Group to

systematically monitor and manage the

risks and integrate the principles of climate

change mitigation and adaptation into

business planning and strategies.

This commitment is reflected in our

‘Delivering a Sustainable Future’ strategy,

which outlines the target to achieve Net Zero

by 2050 aligned with a trajectory that limits

global temperature rise to below 2.0°C.

Compliance statement

The following table summarises the

alignment of these climate-related financial

disclosures with the requirements of

Climate-related Financial Disclosures (CFD)

and the recommendations made by the

Task Force on Climate-related Financial

Disclosures (TCFD), as well as outlining

improvements made since last financial

year to strengthen the disclosure in line

with best practice.

Climate-related

Financial Disclosures

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Governance

Disclose the organisation’s governance around climate-related risks and opportunities.

TCFD recommendation Current status

Describe the Board’s oversight of

climate-related risks and opportunities.

TCFD progress:

The Governance section (see page 47) and the

description of the Board’s responsibilities have

been expanded.

Describe management’s role in

assessing and managing climate-

related risks and opportunities.

TCFD progress:

The description of the information flow

between the various governance structures

and the senior leadership’s role in risk

management has been improved

(see page 46).

TCFD requirements met

TCFD requirements not yet fully achieved

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the

organisation’s businesses, strategy, and financial planning where such information is material.

TCFD recommendation Current status

Describe the climate-related risks

andopportunities the organisation

hasidentified over the short, medium

and long term.

TCFD progress:

The descriptions of the risks and opportunities

have been improved, and descriptions of the

timescales considered for assessing the impact

of those risks and opportunities included

(seepage 49).

Describe the impact of climate-related

risks and opportunities on the

organisation’s businesses, strategy,

andfinancial planning.

TCFD progress:

The relative impact of the risks and

opportunities has been more clearly stated,

outlining the mitigation strategies we have put

in place (see page 50).

Describe the resilience of the

organisation’s strategy, taking

into consideration different

climate-related scenarios, including

a 2°c orlowerscenario.

TCFD progress:

The Group has described more effectively how

material we consider climate-related risks to

be against both the scenarios and timeframes.

This has been supported by strengthening the

scenario analysis (see page 51).

Risk management

Disclose how the organisation identifies, assesses, and manages climate-related risks.

TCFD recommendation Current status

Describe the organisation’s processes

for identifying and assessing

climate-related risks.

TCFD progress:

The sustainability risk register has been reviewed

and developed; this activity is reflected in the

disclosures in the risk section of the CFD, which

includes an updated table by risk category.

Indoing so, flood risk has also been reassessed

for the two main UK sites (see page 48).

Describe the organisation’s processes

for managing climate-related risks.

TCFD progress:

The climate-related risk management

processes have matured and more detail

provided (see page 48).

Describe how processes for identifying,

assessing, and managing climate-

related risks are integrated into the

organisation’s overall risk management.

TCFD progress:

The description of how the Board interacts

with the other functions of the business to

identify and manage risk has been improved

(see pages 47, 48 and 49).

Metrics and targets

Disclose the metrics and targets used to assess and manage relevant climate-related

risks and opportunities where such information is material.

TCFD recommendation Current status

Disclose the metrics used by the

organisation to assess climate-related

risks and opportunities in line with its

strategy and risk management process.

TCFD progress:

Based on the level of risk to the business,

the appropriate metric to measure mitigation is

greenhouse gas (‘GHG’) emissions. Accordingly,

the processes for monitoring and measuring

emissions has been strengthened (seepage53).

Disclose Scope 1, Scope 2, and, if

appropriate, Scope 3 greenhouse gas

(GHG) emissions, and the related risks.

TCFD progress:

Scope 1 and 2 emissions are disclosed and

limited Scope 3 emissions (see page 54).

Describe the targets used by the

organisation to manage climate-

related risks and opportunities and

performance against targets.

TCFD progress:

Net Zero targets are set, but the Group

does need to understand more about the

Scope 3 emissions not currently calculated

(seepage 53).

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Card Factory plc Annual Report and Accounts 2025

Climate risk governance

The Board’s oversight and governance concerning

climate change risk and opportunity are disclosed below.

Thediagram shows the flow of information between the

sustainability and climate change governance structures.

Board

• Oversight and responsibility for all sustainability matters including

climate-related risk.

• Approval of mitigation strategies and associated reporting.

• Receives updates from the Head of Audit & Loss Prevention specific

toclimate-related risks, once a month.

• Receives six-monthly updates from Sustainability Steering Group.

Remuneration Committee

• Agrees how sustainability performance

metrics are included in variable pay

arrangements for Executive Directors.

• Monitors sustainability

performancemetrics.

• Meets three times a year.

Audit & Risk Committee

• Considers all Group risks.

• Makes recommendations on

sustainability risk-related matters

totheBoard.

• Ensures risks requiring immediate action

are prioritised within operationalactivity.

• Meets quarterly.

Sustainability Steering Group

• Focused on supporting and directing

the implementation of ‘Delivering a

Sustainable Future’.

• Supports monitoring and identification

of climate-related risk and opportunity.

• Meets bi-monthly.

Chief Financial Officer

• Executive responsible for implementation of ‘Delivering a Sustainable

Future’ strategy.

• Receives updates on sustainability matters including climate risk

management throughout the year from key stakeholders.

• Member of the Sustainability Steering Group.

CLIMATE CHANGE AND TCFD CONTINUED

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Board oversight of climate-related risks

andopportunities

The Board has ultimate oversight and responsibility for

directing the Group’s approach to sustainability, including

climate-related risks and opportunities. The Chief Financial

Officer is accountable for sustainability matters, including

climate risk, while the CEO has ultimate accountability for the

Group’s sustainability approach.

The Board has determined that climate change action

and ESG matters are a strategic risk. Accordingly, in FY24,

the Board approved the Group’s sustainability strategy,

‘Delivering a Sustainable Future’, which includes objectives

that support mitigation of climate-related risks and help

torealise the associated opportunities, for example carbon

emissionsreduction.

The Board is accountable for the ‘Delivering a Sustainable

Future’ strategy, receiving a biannual update on progress

against targets. The Audit & Risk Committee of the Board also

receives updates on the Group Risk Register from the Head

of Internal Audit & Loss Prevention, to include both existing

and emerging risks. The Board uses this information to

ensure climate-related issues are considered when reviewing,

approving and monitoring the Group’s long-term strategy. This

includes considering how climate change could affect long-term

goals and competitiveness in the future market landscape.

Wider governance arrangements

The Board has established committees and working groups

through which it has delegated specific powers, duties,

decision-making and oversight of aspects of the organisation’s

approach to identifying and managing climate-related risks

and opportunities.

• Audit & Risk Committee: This Committee oversees and

advises the Board on risk-related matters, including financial

and non-financial (operational) risks. The Head ofInternal

Audit & Loss Prevention attends by invitation tosupport

discussions on emerging and evolving risks; thisincludes

climate-related risks, supporting the integration of these risk

into the risk management framework.

• Remuneration Committee: This Committee oversees

compensation and benefits, and how sustainability goals

and metrics are included in variable pay arrangements for

Executive Directors and the senior leadership team, and

for monitoring of the achievement of those metrics.

• Sustainability Steering Group: Chaired by cardfactory’s

strategic lead for sustainability. Sponsored by the

Chief Financial Officer. Attended by the Director of

Corporate Finance, the Sustainability Manager and senior

representatives of all business areas. The Sustainability

Steering Group coordinates climate-related planning,

delivery against those plans and climate-related disclosure,

and the delivery of the ‘Delivering a Sustainable Future’

strategy and plan. The Group supports the assessment of

climate risk and the maintenance of the sustainability risk

climate-related risk.

Management’s role in identifying, assessing,

and managing climate-related issues

Climate-related risk is managed in accordance with the overall

risk management framework and is addressed within one of

the five pillars of the ‘Delivering a Sustainable Future’ strategy

(see pages 38 and 69 to 73 for more information).

cardfactory’s Board has appointed both senior leadership and

wider senior leaders responsible for the implementation of

systems and procedures for the identification, assessment

and management of climate-related risks and opportunities:

• Reporting to the CEO, the CFO oversees the Group’s

response to climate change, including the mitigation

actions contained in the sustainability risk register. The

CFO is also responsible for leading the implementation

of ‘Delivering a Sustainable Future’ across the business.

• Reporting to the CFO, the Head of Internal Audit & Loss

Prevention is responsible for supporting the identification

of Group risks and maintenance of the Group Risk

• Reporting to the CFO, the Director of Corporate Finance

is responsible for assessing the financial materiality

ofidentified risks.

A Sustainability Steering Group meets monthly throughout

the year to guide implementation of ‘Delivering a Sustainable

Future’ and to review performance against its objectives

and targets, including in relation to climate goals and

riskmitigation.

The senior leadership team is responsible for leading and

delivering elements of ‘Delivering a Sustainable Future’,

including climate-related activity, within their respective

business areas.

The strategic senior leader for sustainability is responsible

for leading the Sustainability Steering Group, embedding

sustainability within the organisation and monitoring

progress. Supported by the Sustainability Manager, this role

also includes responsibility for developing and maintaining

the sustainability risk register, supporting compliance with

mandated disclosures, and horizon scanning to identify

transitional risks and opportunities.

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Card Factory plc Annual Report and Accounts 2025

Climate risk management

Process for identifying and assessing

climate-related risks

cardfactory’s approach to identifying and assessing risk

isdetailed on pages 69 to 73.

The identification, assessment and management of climate-

related risks is an integral component of doing business.

The risk management framework provides a robust structure

tomonitor and evaluate both current and emerging

climate-related risks and ensures that climate-related

considerations are prioritised by both the business and

the Board.

As noted on page 69, the Group Risk Register is in place

which includes the ‘ESG compliance and climate change risk.

Currently, this risk is reviewed by the senior leadership team

and the Audit & Risk Committee annually. The Group Risk

provides additional information on specific identified risks

associated with the broader title ‘ESG Risk’ and associated

mitigation measures. The Sustainability Steering Group meets

monthly and informs the content of the sustainability risk

and subject matter experts to raise any risks identified within

their respective business areas, which can then be escalated

if needed.

In FY26, the business intends to review the sustainability risk

This exercise will be used to further develop climate-related

risk monitoring, control and mitigation measures, thereby

augmenting the existing risk management systems.

Processes for managing climate-related risks

The Governance section of the climate-related financial

disclosures (see page 46) outlines the responsibilities for

managing climate-related risks, along with the related

governance and reporting structures.

The management and mitigation of climate-related risks

are primarily the responsibility of senior leadership and

operational staff within their respective business areas.

Senior leadership and operational teams are tasked with

identifying, assessing and implementing measures to address

climate-related risks, as part of the day-to-day operation

ofthebusiness.

The ‘Delivering a Sustainable Future’ strategy and

sustainability risk register are the central mechanisms for

reducing exposure to climate-related risks, minimising

environmental impact and supporting the transition to a

low- carbon economy. Aligning these actions with our broader

sustainability goals ensures a coordinated and strategic

approach to climate risk management.

To date, the Group has not experienced significant operational

disruptions due to extreme weather events. However, the

logistics and distribution teams have contingency plans in

place to ensure business continuity, including systems for

reorganising delivery routes and schedules in response

to disruption caused by adverse weather. This proactive

approach helps mitigate risks and maintain operational

resilience in the face of weather-related challenges.

The Group has recently acquired several subsidiary companies

and is in the process of integrating these businesses into

the Group, including extending the principles of the risk

management framework to these subsidiaries. From a

qualitative perspective, the risk of climate change on the

subsidiaries is considered low but action is being taken to fully

understand risks and opportunities upon integration of these

businesses into the Group. This action includes the capture

of data to enable the calculation of carbon emissions for

inclusion in future disclosures.

CLIMATE CHANGE AND TCFD CONTINUED

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Climate strategy

Identified climate-related risks and opportunities

In October 2023, the Group conducted an exercise to identify

climate-related risks and opportunities, using the TCFD-aligned

physical and transitional risk categories. This exercise identified

several risks and opportunities, which now forms aSustainability

Risk Register.

Climate-related risks

In classifying the identified physical risks associated with

climate change, acute risk is event-driven risks such as

extreme weather events including floods and gales, while

chronic risk includes rising temperatures, heatwaves, cold

spells, sea level rises and droughts. Transitional risks are

those related to the shift towards a low-carbon economy

and include policy and regulatory changes, market shifts

andreputationalimpacts.

Risk category Identified risks

Acute and chronic

physical risks

• Impact of extreme weather on our staff e.g. heatwaves.

• Impact on the operational sites and buildings in the estate e.g. high wind and floods.

• Impact on local infrastructure that serves our estate e.g. drought.

• Disruption to our distribution and supply chain logistics due to physical risks

e.g. high wind and floods.

Policy and legal

• Policies, regulation and legal frameworks and associated risk, for example:

– Strengthening of disclosure requirements e.g. GHG Reporting, TCFD, CFD.

– Eco-design regulation necessitating the substitution of existing raw materials

withlower emissions options.

– Carbon pricing and taxation.

Technology

• Cost of transition to lower emissions technology (decarbonisation).

Market and

reputational

• Changing customer behaviour:

– Slow internal response to the transition to a low-carbon ‘responsible’ business.

– Shifts in consumer preferences e.g. helium balloons and from physical

todigitalcards.

– Stigmatisation of our product lines e.g. virgin paper-based, disposable plastic.

• Increased cost of raw materials e.g. timber.

• Increased cost of electricity.

• Failure of the supply chain to decarbonise.

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Card Factory plc Annual Report and Accounts 2025

Climate-related opportunities

The identified opportunities represent the positive outcomes that can result from mitigation and adaptation activities.

Theseopportunities include those related to the shift towards a low-carbon economy, such as policy and regulatory changes,

market shifts and reputational impacts.

Opportunity category Identified opportunities

Product and

services

Increased revenue through:

• Development and expansion of new, low-emissions products e.g. FSC timber,

movetothe use of recycled content in products.

• Operational efficiency for example leaner manufacturing and reduced resource use.

• Improved levels of design and transparency from sustainable design regulation

e.g.digital product passports, which collect and share sustainability information about

a product and its supply chain with consumers.

• Extended producer responsibility (EPR), which could generate cost savings and

potential revenues from waste and via the circular economy.

Markets

Better competitive position of product and service, leading to:

• Achievement, demonstration and promotion of sustainability credentials

e.g.ourNetZero targets.

• Expansion of existing and new markets e.g. online shopping and eco-friendly

productmarket.

• Access to preferential borrowing.

Operational

(efficiency and

energy)

Reduced operating costs through efficiency:

• Resource and energy efficiency, reducing operational costs related to energy

andfueluse, and material and waste reduction.

• Efficiency in logistics due to improved planning.

• Participation in the circular economy.

• Use of lower emissions sources of energy.

• Improved stock management, reducing waste, storage costs and logistics.

Resilience

Improved working practice, procedure and environment:

• Adoption of mitigation and adaptative measures that improve and strengthen

ouroperations.

As part of its risk assessment, the Group has considered the

impact of the identified risks over various timescales, aligning

with its business planning cycle and the Paris Agreement:

• Short-term (up to 5 years, 2025 to 2030): This period aligns

with the Group’s viability statement (see pages 119

and 120).

• Medium-term (5-15 years, 2025 to 2040): This period

allows the Group to assess the evolving financial impact

ofclimate risks and opportunities, along with any

emerging risks that could materially impact the Group and

how these factors influence our strategic plans.

• Long-term (over 15 years, 2025 to 2050+): This period reflects

the emergence of long-term risks and ensures the Group

monitors and horizon scans for strategic considerations.

Impact of climate-related risks

andopportunities

Using the risk identification and assessment processes

described in this disclosure, cardfactory has assessed

climate-related risk with regard to financial materiality of the

impact. Our assessment determined that, in the short-term,

there is no material financial risk or threat to the financial

performance of the business, our revenue and costs, financial

position, or assets and liabilities, that will affect our business

model or ability to create value.

Despite this, and subject to our materiality approach,

theGroup has designated climate change as a strategic

risk and has included climate within our ‘Delivering a

Sustainable Future’ strategy to mitigate our impact and guide

our transition to a low-carbon business. In doing so, our

approach considers double materiality, as recommended by

the global reporting initiative (GRI). It recognises the business

has impacts that extend beyond immediate operations and

financial performance, and that these impacts can be material

externally (to society and the environment) and not just on the

performance of the business.

Climate-related risks

The physical risk of climate change is currently having minimal

impact on the Group and our financial position. Over the next

five years, we do not anticipate any significant change to this risk

status. The Group has conducted a flood risk assessment for our

two main sites, Printcraft, the support centre and distribution

centres, and identified that these locations are at very low risk

offlooding. This risk rating applies from now until 2060.

CLIMATE CHANGE AND TCFD CONTINUED

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Our stores are located on high streets, in shopping centres

and retail parks. While adverse weather does impact these

sites, any effects have, to date, been minimal and manageable

based on our assessment of financial disruption and impact

on revenue. This includes the impact associated with the

distribution of products to these stores.

The transitional risks of climate change present a more

significant risk but are not considered to have a substantial

financial impact over the same period. This is partly

because we have mobilised mitigation strategies, and

hope to realise the associated opportunities and benefits

through the implementation of ‘Delivering a Sustainable

Future’. Accordingly, the activities to address these risks are

considered within our financial planning and budgets.

Climate-related opportunities

Our response to climate risk, particularly the transition to

alow-carbon economy, presents opportunities for the Group.

Our ‘Delivering a Sustainable Future’ strategy is built around

four key areas where we believe the business can deliver

a positive impact: Climate; Waste & Circularity; Protecting

Nature; and People & Equity (see pages 36 to 43).

Climate change offers significant opportunities to capitalise

on the transition to a low-carbon economy. Promoting

our sustainability credentials will further position us as a

forward-thinking, environmentally responsible business,

appealing toeco-conscious consumers.

The Group is actively improving our operational efficiency,

implementing measures that reduce costs while supporting

our sustainability goals. This dual approach, leveraging market

opportunities and optimising operations, ensures we will

remain resilient, competitive, and well-positioned to thrive

inalow-carbon economy.

Scenario analysis – resilience of the

cardfactorystrategy

To gain deeper insights into how potential climate related

risks and opportunities may develop and affect our business

in the medium to long term, the Task Force on Climate-

related Financial Disclosures (TCFD) advises the use of climate

scenario analysis. This approach helps assess the potential

implications under various future climate pathways.

Against these selected scenarios, TCFD recommends that companies consider how the rate of change will influence the

materiality of impact on the business and the resilience of the businessstrategy.

The Group has selected the following climate pathways or scenarios against what we consider the impact of climate-related

risks and opportunities over time, using a qualitative approach to business, strategy and financial planning. The business has

not conducted quantitative analysis as the risks of climate change are not currently considered to be material. If this position

changes, we will complete a quantitativeanalysis.

Scenario Scenario description

Scenario

Gradual transition – Paris Agreement goal,

aligned – limits warming by +1.5°C but well

below 2°C.

In this scenario, there is a measured and orderly transition,

which means gradual change and policy slowly becoming

more stringent, leading to significant emission reductions

and limiting global temperature rise.

Scenario

Late transition and disorderly transition –

rapidshift to a low-carbon economy within 2°C.

In this scenario, disjointed global action leads to

government intervention, with climate policy and wider

action ‘forcing’ rapid shifts to a low-carbon economy.

This generates significant emission reductions and limits

global temperature rise but creates greater transition risks.

Scenario

Hothouse world – slow or no action on carbon

mitigation, >4°C.

‘Business as usual’ where existing policies are preserved

but new policies do not materialise, transition risks are low

but physical risks are high with severe social and economic

disruption, the climate action and mitigation are minimal,

and global temperature exceeds 4°C.

Our scenario analysis indicates that under Scenario 1, which assumes a gradual transition to a low-carbon economy,

transitional risks are more pronounced than physical risks in the short term. However, overall risks and their associated

financial impacts remain low. Over the longer term, while physical risks remain consistent, transitional risks are expected

toincrease slightly. Despite this, we are confident that ‘Delivering a Sustainable Future’ will effectively mitigate any heightened

impacts from transitional risks. As a result, we have concluded that climate-related risks under Scenario 1 are unlikely

tosignificantly influence our business strategy or resilience. Accordingly, we do not need to consider the impact of this scenario

inour analysis.

Recent findings from the Intergovernmental Panel on Climate Change (IPCC) suggest that global temperatures may have

already surpassed the +1.5°C threshold. If confirmed, this would imply that the window for a gradual transition to a low-carbon

economy has narrowed, making Scenario 2 increasingly probable. Under this scenario, governments are expected to implement

more stringent climate policies, such as carbon taxation and pricing, in the medium to long term. While these measures could

raise operational costs, we consider it unlikely that such policies would severely affect the financial stability of our business,

given its relatively low energy intensity. A greater challenge under this scenario will be the decarbonisation of our supply chain,

but we would anticipate that a global response to climate change would support this activity. For these reasons, we anticipate

that transitional risks under Scenario 2 will not materially affect the resilience of the business. Physical risks are expected to rise

slightly under this scenario, but not to a level that would significantly impact the future of the business.

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Card Factory plc Annual Report and Accounts 2025

Under Scenario 3, which assumes a ‘business as usual’ approach with no substantial climate action, transitional risks are assessed as negligible. However, physical risks associated with

global temperature increases exceeding 4°C would become more pronounced. This scenario anticipates a rise in acute weather events, potentially leading to property damage, disruptions

indistribution and supply chains, and reduced footfall in our stores, which could impact revenue. Despite these challenges, we have evaluated the overall risk as medium but having an impact

that is not currently considered to have a material impact on the business. Our assessment is partly due to our operational model, which includes short-term store leases that provide flexibility

to relocate if necessary. Additionally, our growing online presence helps mitigate the impact of reduced store footfall by aligning with shifting consumer preferences. Furthermore, the logistics

industry, including our distribution networks, is already adapting to climate challenges through digitalisation, data-driven route optimisation, weather routing, fuel efficiency improvements,

andadvancements in vehicle and ship design. These measures enhance our ability to manage and mitigate potential disruptions.

Primary climate-related risks, impact and mitigation by climate scenario

The primary mechanism for mitigating the impact on climate change will be through the implementation of ‘Delivering a Sustainable Future’. The following table details some of the additional

mitigation measures for the Group.

Physical risks Scenario

Time horizon

Potential impact Mitigation response/actions

Short Medium Long

Acute and

chronic

<2°C Low Low Low The two main UK sites, Printcraft in Baildon, near Bradford,

andour support centre and distribution centres in Wakefield,

are not exposed to flood risk, which has been assessed to 2060

as very low annual flood risk for surface and river flood.

All sites in the UK are exposed to high wind events,

withanaverage of 1% chance of wind gusts above 100mph.

Heat Stress: The UK, on average, sees less than five heatwave

days each year, with temperatures of more than 30°C,

sohavelow heat stress.

Planned and preventative maintenance to assess and reduce

theimpact of acute weather events.

There have been some flood events at a small number of stores,

the impact of which in relation to the estate is considered low.

The reason for the flood is assessed and action taken to avoid

recurrence, and we continue to monitor store flood events.

Monitoring of heat events in the UK and any incidence of building

overheating enables planning for any scenario where this

moves from a low risk. If individual stores experience significant

issues, mitigation for that store, for example, air conditioning,

canbeconsidered.

4°C Low Low Medium Potential store flood events and weather-related impact,

leading to some loss of revenue.

Increased disruption to distribution and supply chain.

Business continuity plan to respond to serious events.

Planned work with our value chain to mitigate the impact

ofdelayed deliveries and store stock management.

Logistics and route planning technology is deployed to reduce

disruption of extreme weather.

Transitional risks Scenario

Time horizon

Potential impact Mitigation response/actions

Short Medium Long

Policy and

legal

<2°C Low Low Low-

medium

Increased operational costs: Introduction of climate-related

regulations, including carbon tax and pricing.

Tax and levies on high impact materials, such as plastic

andwood pulp, increase the cost of products.

New rules on reporting product impact are expected

fortheEUin the form of digital product passports.

The Company is not currently exposed to carbon pricing or

taxation but has set near-term reduction targets for Scope 1, 2

and 3 emissions, which will reduce exposure.

Monitoring of policy and regulation changes and communication

of the impact of the changes to the business via the functional

riskregister.

4°C n/a n/a n/a No change to the current impact. n/a

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Transitional risks Scenario

Time horizon

Potential impact Mitigation response/actions

Short Medium Long

Technology

<2°C Low Low Medium Increased capital costs:

Cost of transition to lower-emission technologies

(decarbonisation) for our operations.

Legacy stock, as recycling may not be economically viable

orpossible and may require investment in new technology.

The cost of transition of our own operations to a low-carbon

business is currently assessed as part of our pathway to

NetZero but is not anticipated to significantly influence our

financial position under anyscenario.

All new, refitted, and relocated stores have and will continue

tobe fitted with building management systems.

4°C n/a n/a n/a No change to the current impact. n/a

Markets and

reputational

<2°C Low Low Medium Consumer perception and behaviour change, driven by

low-carbon transition, results in preference shifts that result

inreduced demand for products or a perception the business

isnot operating responsibly.

The business strategy targets increasing volumes of

complementary category product sales which, without

mitigation, will increase the Group’s carbon footprint.

A reduction in revenue and market share may occur if the Group

fails to meet and disclose its sustainability targets and strategy.

Carbon intensive energy supply leads to increasing energy costs.

Material replacement for high impact products and packaging

that support the decarbonisation of the supply chain.

Successful engagement with the supply chain and reduction

invalue chain emissions.

Internal expansions to consider supply chain impact.

Successful implementation of ‘Delivering a Sustainable Future’

andachievement of Net Zero targets, reducing the carbon

intensity of sold products.

Improved energy efficiency of the operations reduces exposure to

increasing energy costs and transition to low-carbon energy supply.

4°C n/a n/a n/a No change to the current impact n/a

Climate-related metrics and targets

The metrics used by the organisation to assess climate-related risks and opportunities.

The Group has determined that greenhouse gas (‘GHG') emissions are currently the most appropriate metric for assessing climate-related risks and opportunities. This aligns with the Group’s

commitment to reducing its impact on climate change.

The Group has set a Net Zero target for 2050 along with near-term targets, with progress measured against a 2022 baseline:

• Reduce absolute Scope 1 and 2 GHG emissions by 54.6% by 2033.

• Reduce Scope 3 emissions by 61.1% by 2033 on an economic intensity basis.

The Group has also set goals in ‘Delivering a Sustainable Future’ that supports the transition to a low-carbon business, more details of which, including the Group’s progress, can be found

onpages 36 to 43.

The table in the Energy and Carbon Report on page 54 details the Group’s carbon from our base year 2022 to 2025, for the emissions associated with the Streamlined Energy and Carbon

Reporting (SECR) Regulation for the UK and global operations. This year’s disclosure includes a limited category of Scope 3 emissions for category 3, fuel and energy-related activities and those

emissions that relate to recent acquisitions. The impact of including these additional sources of emissions is that the reported absolute emissions have increased by a small amount but the

relative measure of emissions by turnover has reduced by 4.8%.

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Card Factory plc Annual Report and Accounts 2025

The Group’s carbon emissions, using a location-based approach to calculating emissions, were 8,850 tonnes CO

e for 2025, which is 1% higher than in 2024. These include the emissions

associated with natural gas, LPG, diesel, petrol, electricity and fugitive emissions. The emissions intensity of 16.5 tonnes CO

e per £m is 4.8% lower than last year, which continues to reflect the

impact of energy efficiency projects absorbing business growth, whilst reducing emission intensity.

In reference to Scope 3 emissions, the Group conducted an analysis in 2022, which assessed Scope 3 emissions as 92% of total emissions, amounting to 70,915 tCO

e. The Group is currently

auditing the 2022 data and calculating Scope 3 emissions from 2022 to 2025. At the time of this disclosure, it is not possible to report Scope 3 emissions for all categories. The Group intends to

complete this work in FY26, to ensure future greenhouse gas reporting is aligned. This audit also considers the impact of recent structural changes due to acquisitions, which have reached the

materiality threshold to trigger the rebaseline policy. Accordingly, the business is working to understand the impact of these structural changes on the base year.

Energy and Carbon Report

In accordance with the disclosure requirements for listed companies under the Companies Act 2006, the table below shows the Group’s energy and carbon emissions and intensity metric

tonnes of CO

e per £m of turnover. The Companies Act also requires the inclusion of commentary regarding the implementation of energy efficiency measures, to be included within the Energy

and Carbon Report, this requirement is discharged within the climate action section of the sustainability update on pages 36 to 43.

cardfactory GHG table Most recent year Previous year Previous year Previous year

Energy and carbon

Country

FY25

tCO

FY25

FY24

tCO

FY24

FY23

tCO

FY23

FY22

tCO

FY22

Scope 1

emissions (combustion of fuel – direct emissions) tCO

UK 661 58% 789 63% 724 99% 672 99.6%

RoW 475 42% 463 37% 4 1% 3 0.4%

Total 1,136 100% 1,251 100% 728 100% 675 100%

Scope 2

emissions (purchased energy – indirect emission) tCO

UK 4,738 82% 4,852 88% 4,479 96% 4,238 99%

RoW 1,070 18% 684 12% 163 4% 45 1%

Total 5,808 100% 5,536 100% 4,642 100% 4,283 100%

Scope 3

emissions (Category 3 – Fuel and Energy related activities)

tCO

UK 1,675 88% 1,695 85% 1,701 98% 1,692 99%

RoW 231 12% 297 15% 43 2% 21 1%

Total 1,906 100% 1,993 100% 1,744 100% 1,713 100%

Total energy use

(kWh) Scope 1 & 2

UK 25,240,574 87% 25,564,019 89% 25,651,206 98% 22,269,584 99%

RoW 3,632,639 13% 3,080,177 11% 449,480 2% 225,256 1%

Total 28,873,213 100% 28,644,196 100% 26,100,686 100% 22,494,840 100%

CLIMATE CHANGE AND TCFD CONTINUED

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Intensity metric

Intensity ratio

FY25

tCO

FY24

tCO

FY23

tCO

FY22

tCO

Variance Vs Prior year

FY24 (%)

Variance vs

FY22 (%)

Total emissions

(Scope 1 & 2) 6,944 6,788 5,370 4,958 2.3% 40.01%

Total emissions

(Scope 1, 2 & 3) 8,850 8,780 7,114 6,671 0.8% 32.7%

Emissions intensity

(tCO

e / £m turnover) Scope 1 & 2 13 13.3 12 13 -2.8% -2.9%

Emissions intensity

(tCO

e / £m turnover) Scope 1, 2 & 3 16.5 17.3 0 15.35 17.91 -4.8% -8.0%

Methodology

The SECR report relates to cardfactory and includes the emissions from its operations from 1 February 2024 to 31 January 2025, aligning with the fiscal year.

The reported carbon emissions have been calculated following the guidance in the UK Government’s Environmental Reporting Guidelines, 2019, and the methodology outlined in The GHG

Protocol Corporate Accounting and Reporting Standard (revised edition). The Carbon Emission factors used are those in the UK Government’s GHG Conversion Factors for Company Reporting

2024 and the International Energy Agency, for subsidiaries outside the UK. An ‘operational control’ methodology has been adopted for the boundary of carbon emissions reporting, operational

control refers to the ability of an organisation to direct the activities of a facility or operation. The Energy and Carbon Report includes material carbon emissions, in line with the emissions

categories required to be reported under the SECR regulations.

This financial year, the Group has reported the first full year of SECR emissions for SA Greetings. The business was acquired in 2023 and as such 2024 represents the first full year of available

operational data. The report also includes the emissions from the recent acquisition of Garlanna Holdings Limited but not Garven Holdings, as the business is still in the process of integrating

Garven into the carbon reporting process. For those entities included in the SECR disclosure, the emissions for Scope 3, Category 3 fuel and energy-related activities, have been included in the

reporting for the first time.

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Card Factory plc Annual Report and Accounts 2025

OUR STAKEHOLDERS / S172

This section summarises how the Board (or senior colleagues)

engage with the key stakeholder groups, the key issues

identified from this engagement and the actions taken to

respond to that engagement. The Board are provided with

updates from all stakeholder engagement at scheduled Board

meetings, with cascades of relevant information via members

of the senior leadership team.

Key aspects of engagement with some stakeholder groups are

also reflected in the ESG section (from page 36), particularly in

relation to our colleagues, communities and environment, with

consideration of matters effecting our suppliers also reflected

in our risk reporting (from page 69).

Section 172(1) Statement on

stakeholder engagement

The Board of Card Factory plc engages with the following

stakeholder groups to ensure they understand their views

and to ensure these are considered in decisions made by

the Board and by the senior leadership team. This includes

engagement with key stakeholder groups (customers,

colleagues, shareholders, suppliers and communities),

understanding their priorities and taking account of these

priorities in decision-making for the long-term benefits of all

these stakeholder groups, whilst protecting the cardfactory

brand and the business’ reputation.

Our

stakeholders

Our customers

How we engaged

• Our internal data and insights team provide

monthly briefings to the Board and senior

teams, collating multiple bespoke research

for specific needs and various additional

sources for continuous tracking and analysis

of customers. In addition to various sources

referenced in this report (including pages 8,

13 and 15) and other specific data includes:

– Savanta BrandVue tracking of brand health

and customer sentiment.

– 20,000+ monthly contributions from

customers via our ‘tellcardfactory’.

– Ad-hoc bespoke surveys are used to test

andinform, (including September 2024

survey to support assessment of price

elasticity and value drivers).

– Product innovation and range development

is supported by trends WGSN (Worth Global

Style Network), segmentation analysis

customer insight, desk research, colleague

insights and trade visits.

Discussions, topics and actions

• We have seen some erosion in the

‘consideration’ and ‘value’ perception of card

following cost-of-living challenges for customers

along with postage and price inflation

challenges. This can impact cardfactory’s NPS

(asignificant KPI).

• Pricing analytics has identified categories

where customers are highly price sensitive,

andranges where customers are more tolerant

of increased pricing, meaning we can be more

customer centric in our pricing approach.

• Insights allow us to deploy designs for latest

trends (e.g. Taylor Swift friendship); and a

wider offering to meet ‘non-nuclear’ family

requirements, whilst segmentation highlighted

opportunity in the ‘celebration enthusiast’

space which has seen us refine our premium

tier cards.

• Issues identified with the customer journey

foronline transactions.

• Lack of customer awareness vs recognition

of cardfactory.co.uk offer, despite messaging

in-store.

Outcomes

• Reinforcement of our ‘everyday

low price’ strategy to reinforce our value

credentials in-store, including promotional

pricing for cards from 15 pence.

• Continuous enhancements to customer service

training and ongoing efficiencies to focus

store colleague’s time on customer service

is supported in mystery shopper store and

service standards (a significant KPI) landing at

77.2% inDecember 2024, the highest result

of the year, despite being our busiest period,

and Savanta BrandVue’s customer satisfaction

rating, which improved 1ppt in year.

• The adoption of a pricing policy to account for

the drivers of value findings and focus on clarity

and consistency of price for the customer.

• An optimised online journey at basket and

checkout has reduced customer contact and

increased checkout completion by 1.4%.

• Promotional activity to drive online customer

base via ‘tellcardfactory’ data capture.

As custodians of the cardfactory business,

the Board continues to engage with

a range of stakeholders and to apply

their perspective in its decision-making,

toensure the business is sustainable

andcan grow over the long-term.

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Our shareholders

How we engaged

• Ongoing programme of two-way

shareholder communications by the

Board, Q&A with all shareholders at

AGM and Preliminary Results and

InterimResults.

• Investor presentation by CEO and CFO

following Preliminary Results and Interim

Results made available to all investors.

• Shareholder consultation with the

Chair with invitations issued to top 12

shareholders (59% of shares) following

the2024 AGM.

• Meetings and calls with material

shareholders (and prospective

shareholders) with CEO and CFO on

an ongoing basis, including investor

roadshow meetings.

• Responding to ad hoc enquiries

fromshareholders.

Discussions, topics and actions

• Retail investor issues with lack of visibility

on analyst consensus.

• Appetite for share buy-back.

• Opportunity to improve explanations

toshareholders e.g. on how efficiencies

are being realised in store operations.

• Improvement of Board diversity expected

(based on Board composition at the start

of the year).

Outcomes

• Edison engaged to provide paid-for research,

which is accessible to retailinvestors.

• Additional analyst coverage initiated

during the year, with seven other analysts

now reporting on Card Factory plc.

• Capital Allocation Policy published

in April2024 to provide clarity for

investments including dividends and other

shareholder returns.

• New investor website launched

inFebruary 2024.

• Significant improvement in

Boarddiversity.

Communities and environment

How we engaged

• Our colleagues support and represent

the communities across the UK & Ireland

with colleague engagement (see pages

41 and 42) identifying opportunities

where cardfactory and The Card Factory

Foundation can support our local

communities and the environment.

• Engagement with colleagues, both directly

and through our Sustainability Steering

Group, has identified opportunities

tocollaborate and improve processes to

reduce waste and emissions within our

business and supply chain.

• We have also engaged with key

product suppliers, using environmental

questionnaires to build insight into

practices across our supply chain,

informing our strategy moving forward.

• Our Board continues to provide oversight

on our approach to communities and

environment, with our Chair acting as

designated Director for sustainability.

Discussions, topics and actions

• Colleagues request for increased

opportunity in ‘Giving Something Back’ to

our communities (see pages 41 and 42).

• Ongoing commitment to improve our

ESGcredentials (see pages 36 to 43).

Outcomes

• See pages 36 to 42 (i.e. ESG section and

progress to targets, including Climate,

Waste & Circularity, Protecting Nature,

People & Equity and our communities).

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Our suppliers

How we engaged

• Our supplier engagement is led by our

buying and technical teams and reports to

the Board twice a year.

Discussions, topics and actions

• Far East suppliers are generally reliant on

cardfactory order volumes as a significant

part of their business, with concerns

relating to foresight on ranges, volumes

and order timelines.

• Suppliers are supportive of our

collaborative approach and cardfactory’s

supplier engagement not adopting a

penalty-based model, but preference for

greater collaboration.

• Preference for opportunity to be able to

secure supply of a wider range of products

rather than specific orders allocated to

each supplier, based on buyer’s view on

which supplier to select.

• Ongoing compliance requirements,

including supply chain minimum

standards before any orders are placed

and compliance with mandatory policies

(e.g. modern slavery, anti bribery) with

further details on page 72.

Outcomes

• Following trials in Winter 2023/24,

weextended a tender process for high

volume orders to most suppliers which:

– provides improved advance notice on

planned products and order volumes;

and

– supports greater collaboration with

suppliers on specification vs cost price,

that is sustainable for the suppliers’

businesses and maintains our

customer value offer.

• Quarterly reviews of a range of supplier

KPIs introduced to support collaboration,

address any issues and share future

rangeplans.

• This revised model allows cardfactory to

maintain a limited number of potential

suppliers for specific product ranges,

to work in long-term partnership,

whilst affording scope to invite tenders

from new suppliers to maintain a

competitive tension to secure products

at the right price point for customers,

whilst maintaining profitability for

ourshareholders.

OUR STAKEHOLDERS / S172 CONTINUED

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Our colleague experience

It is our priority at cardfactory to make

sharing in and celebrating life’s moments

special, not only for our customers but

for our colleagues too. Colleagues help to

bring our values to life. They are our key

enablers to help us achieve our strategic

goals and we want to continue evolving

our culture and colleague experience on

our way to becoming the number one

celebration destination for all.

Our values also represent who we are and

are reflected in how we behave. Theyare

woven through ‘Talent Every Day’, our

performance management process in

guiding our colleagues on not only what

they do but how they do it. We also host

an annual recognition event to recognise

colleagues throughout the business who

have exceeded in their demonstration

ofour values.

Our culture is inclusive and is empowered

by exceptional leadership. Celebration

is at our core, driven by passion and

commitment. We continue to evolve our

inclusive culture while developing how

we engage with colleagues. This is key

in building and enhancing our colleague

proposition and supporting colleagues in

other life events, supported by community

network groups, focus group engagement

and ‘Let’s Talk About’ sessions to support

colleagues and improve diversity.

During the year, we undertook a total

refresh of our People policies, including key

policies on family leave, grievance, equal

opportunities and disciplinary policies,

including new policies to reflect legislative

change, including an anti-harassment

policy, with associated training.

How we reward and recognise

our colleagues

Our focus on reward for 2025 has been on

pay, ensuring we continue to pay at the

middle of the market. The cost of increases

to National Minimum Wage (NMW) has

given us challenge from a cost perspective

and has meant we have not been able

to pursue further enhancements to our

benefits suite although we recognise,

our pension benefits are below market

norms. We continue to review our benefits

providers and to ensure maximum

engagement through the offer we have.

Building our leadership

capability

This is fundamental to our ability to

deliver on our strategy as it is developing

our colleagues to build skills and to retain

and promote talent. Our compelling

leadership and development proposition

enables this in several ways with an

accessible toolbox of interventions that

support all colleagues to develop their

leadership skills (from leading self, to

leading a function or the enterprise), and

to develop a coaching culture through

functional and technical skills.

Our colleagues

How we engaged

• Functional colleague forums identify issues

for representatives to discuss with the

Chair (designated Director for colleague

engagement) at Combined Listening

Groupmeetings.

• Regular colleague updates include a

weekly newsletter; weekly key messages

from senior leadership team; monthly

business updates (with Q&A); functional

team huddles; and annual Golden

Quarterconference.

• Informal colleague discussions with

Board members and members of the

senior leadership team through regular

store visits and support centre colleagues

working in stores.

• Community network groups drive

conversations, education and awareness

in four areas: LGBTQIA+, Women at Work,

Menopause and Disability.

Discussions, topics and actions

• Feedback from our bHeard survey

in October 2023 highlighted that our

colleagues want to ‘Give Something Back’

to our communities. As a result we have

built a strategy and approach and an

action plan of activity.

• Pay and benefits, and wellbeing are areas

colleagues have told us are important

tothem.

• Progress is required to improve our

diversity data and the demographic of our

colleagues to align with the aim of reflecting

the communities we serve.

Outcomes

• See page 42 for details of additional

community engagement as part of

enhanced ’Giving Something Back’

activities.

• Improved communications of our

wellbeing offer, with regular updates in

weekly newsletter, and wellbeing sessions

delivered in all retail divisional meetings.

Alongside adopting flexible practices

to support colleague work-life balance

andwellbeing.

• Clarification of pay principles and range

ofbenefits, including wellbeing support.

• Extension of holiday purchase scheme

and extension of SAYE to Irish store

colleagues.

• We reduced attrition levels (a significant

KPI) for seasonal store colleagues to 11%

this year, compared to 20% in FY24.

• ‘Count Me In’ survey launched to

collect diversity data with 10%

participation to date.

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Card Factory plc Annual Report and Accounts 2025

Financial highlights

The Group delivered a robust performance and made

significant strides towards our strategic ambition including

continued, resilient growth in stores revenue and successful

expansion inpartnerships.

• Total sales of £542.5 million increased by £31.6 million

(+6.2%) year-on-year (YOY).

• Strong revenue growth of +5.8% across our stores in

the UK & Ireland underpinned by like-for-like (LFL) sales

growth of +3.4% compared tolastyear, with particularly

strong growth in giftingrevenue.

• Our international growth accelerated with the acquisitions

of Garven in the US and Garlanna in the Republic of

Ireland for combined net consideration of £22.5 million.

• Growth in Adjusted PBT of +6.3% to £66.0million, at a

margin of 12.2%, margins are in line with prior year as

our strong performance offsets theeffect of inflationary

headwinds.

• Robust balance sheet, with strong cashflow from

operations and netdebt of £58.9 million (FY24: £34.4

million). The net debt position reflects £43.0million of

acquisitions and dividends during FY25.

• Store portfolio in UK & Ireland stands at 1,090 stores

at 31January 2025, up by +32 from 1,058 stores on

31January 2024.

• Successful refinancing in April 2024, delivered a new

four-year £125 million committed revolving credit facility

which provides greater flexibility and afirm platform from

which we can execute ourstrategy.

• Dividend per share for FY25 progressively increased by

6.6% to 4.8 pence with a1.2 pence interim dividend paid

in December 2024 and a final proposed dividend of

3.6 pence per share.

Sustainable

shareholder

returns

Matthias Seeger

Chief Financial Officer

”The Group aims to balance

sustainable, progressive

cash returns and long-term

growth in shareholder

value.”

CFO’S REVIEW

+5.8%

Store revenue

+6.2%

Total sales

+6.3%

Adjusted PBT

+32

net new stores

Store portfolio

£125m

committed facilities

Refinancing

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Company Information

Financial performance

FY25 FY24

Revenue £542.5m £510.9m

EBITDA £127.5m £122.6m

Adjusted Profit Before Tax £66.0m £62.1m

Profit Before Tax £64.1m £65.6m

Adjusted earnings per share 14.3 pence 13.5 pence

Basic earnings per share 13.8 pence 14.4 pence

Dividend per share 4.8 pence 4.5 pence

Net debt £58.9m £34.4m

Cash from operations £105.6m £118.7m

Adjusted Leverage (exc. Leases) 0.7x 0.4x

Adjusted PBT excludes transactions that are either one-off in nature or otherwise not part of the Group’s underlying

trading performance. In FY25 this includes one-off restructuring costs (£1.9 million), acquisition-related costs (£1.0m

million), refinancing costs (£0.5 million) and unrealised gains on derivative contracts (£1.5 million).

Sales

Total Sales

Change

FY25

£m

FY24

£m

Stores 506.8 478.9 +5.8%

cardfactory Online 8.8 8.8 +0.1%

Getting Personal 4.4 5.9 -25.4%

Partnerships 22.2 17.0 +30.6%

Other 0.3 0.3 –

Group 542.5 510.9 +6.2%

LFL Sales

FY25 FY24

cardfactory Stores +3.4% +7.7%

cardfactory Online +0.1% +0.4%

cardfactory LFL +3.3% +7.6%

Getting Personal -27.4% -26.1%

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Card Factory plc Annual Report and Accounts 2025

Total Group sales for FY25 were £542.5 million, an increase of £31.6 million or +6.2% when

compared to the previous year. The sales growth in FY25 was underpinned by LFL sales in

cardfactory stores of +3.4% and a £5.2 million increase in partnerships revenue, including

£3.9million of revenue for Garven and Garlanna, which we acquired in the year.

Store sales across the UK & Ireland of £506.8 million increased by £27.9 million or +5.8%

compared to the prior year, with LFL sales of +3.4%. Everyday ranges performed strongly,

withgifts (+17.8%) and celebration essentials (+3.5%) showing continued positive momentum

on LFL sales, supported by positive LFL growth in everyday card. Approximately a third of the

total LFL growth was delivered through targeted price increases. Total store sales and LFL

store sales both outperformed the non-food LFL sector sales as general high street footfall

wasdown YOY.

Average basket values increased by +6.7%. The increase in basket values was supported by

higher average selling prices, delivered via a combination of the price activity described above

and continuing to expand and develop our range, particularly in gift and celebration essentials.

Gift and celebration essentials had positive LFL growth of 5.6% compared to 2024 and now

represents 50.2% of total sales, with approximately one in every two baskets now containing a

gift or celebration essentials product.

We continue to optimise and improve our store portfolio, and during FY25, adding 32 stores to

our store network. We opened 40 new stores and closed eight increasing our portfolio to 1,090

stores. The value of our flexible approach to the store portfolio is illustrated in the incremental

sales growth delivered by non-LFL sales in the year.

Our partnerships business, which focuses principally on B2B sales, delivered total sales

of £22.2 million in FY25, compared to £17.0 million in FY24. This included an £11.6 million

contribution from SA Greetings (FY24: £10.4 million) as well as a £3.9 million contribution from

Garven and Garlanna since they were acquired during the year in September and December

2024 respectively. Other partnerships delivered total sales of £6.7 million, including increased

contributions from the annualisation of our offer across the Matalan store estate in the UK and

the expansion of our existing agreement with Aldi in both the UK & Ireland.

In online, cardfactory.co.uk delivered positive sales growth towards the end of the year

resulting in LFL growth for the full year of +0.1%. Following the cessation of trade on the

Getting Personal platform, we are now focused on driving efficient, profitable growth at

cardfactory.co.uk.

Within Online, Click & Collect is a key component of our omnichannel offer, differentiating

cardfactory.co.uk from pure play online and bricks and mortar retailers in allowing customers

to Click & Collect and, since the year end, book balloon appointments in a select number of

trial stores. Total online sales (including Getting Personal) declined by £1.5 million, entirely

driven by Getting Personal.

Following a review of our online offer, we made the decision to close the Getting Personal

platform from 31 January 2025 as we continued our strategic shift in focus to cardfactory.co.uk.

Sales on our cardfactory.co.uk platform grew slightly in the year aswefocused on delivering

improvedmargins.

Gross profit

FY25

£m

FY25

% Sales

FY24

£m

FY24

% Sales

Group sales 542.5 510.9

COGs (164.4) (30.3%) (155.9) (30.5%)

Product margin – constant currency 378.1 69.7% 355.0 69.5%

FX (losses)/gains (0.8) (0.1%) 0.6 0.1%

Product margin 377.3 69.5% 355.6 69.6%

Store & warehouse wages (134.4) (24.8%) (124.0) (24.3%)

Property costs (25.0) (4.6%) (24.7) (4.8%)

Other direct costs (24.1) (4.4%) (22.0) (4.3%)

Gross profit 193.8 35.7% 184.9 36.2%

Adjusted gross profit 192.9 35.6% 184.9 36.2%

Product margin calculated on a constant currency basis using a consistent GBP/USD exchange rate across both periods.

FXgains and losses reflect conversion from the constant rate to prevailing market rates.

Overall gross profit for the Group increased by £8.9 million, or +4.8%, to £193.8 million.

Thisreflects a slight reduction in gross margin from 36.2% in FY24 to 35.7% this year, largely

due to increased wage costs and a lower effective FX rate. The cost of goods sold (COGs) figure

for FY25 includes a one-off impact of £0.6 million relating to the cessation of trade of the

Getting Personal platform which reduced the underlying gross margin by 0.2%.

Product margin, when calculated using a constant GBPUSD exchange rate YOY, wasfavourable

with an increase of +0.2ppts to 69.7%. This product margin improvement was achieved in spite

of a slight shift towards lower-margin non-card products in sales mix, 51.8%non-card in FY25

which is an increase on a 50.5% mix in FY24.

The Group purchases approximately half of its goods for resale in US Dollars from suppliers

in the Far East. Our well-established currency hedging policy continues to protect us against

unexpected volatility in GBP/USD exchange rates. Our average USD delivered rate in FY25 of

1.2589 was lower than the prior year (FY24: 1.3121) as expected, which reflects market rates

at the time hedges were entered into. Our hedging policy operates over a three-year period,

with most hedges placed in the 12-24 months prior to delivery, which was a particularly volatile

period for FY25 including record historical low GBPUSD rates in late 2022. The average spot

rate during FY22 and FY23, when most of our FY25 deliveries were contracted, was 1.2365.

Going forward we expect average delivered rates to move slightly higher, reflecting subsequent

increases in market rates.

CFO’S REVIEW CONTINUED

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Company Information

The net foreign exchange (FX) loss of £0.8 million includes £1.5 million of unrealised gains

on our derivative portfolio that will mature in future years and do not reflect current period

trading performance. Given the size of these gains in FY25, we have excluded the gain from our

Adjusted results (see pages 169 to 172 for further details). Previously these values have been

negligible. The increase in underlying FX loss YOY reflects the reduction in average delivered

rates described above.

Store and warehouse wages increased by £10.4 million (8.5%), which included the impact ofthe

National Living Wage increasing by +9.7% in April 2023 and +9.8% from April 2024, as well as

thefurther expansion of the store portfolio.

Building on our strong track record of managing inflation through a combination of pricing,

efficiency and productivity, we have carried out a robust programme of activity to drive profit

margin, as previously guided.

We have actively managed the impact of specific retail inflationary pressures, successfully

offsetting a significant proportion of these inflationary wage increases through driving greater

efficiencies and improving productivity in our stores via the introduction of a new industry-

recognised labour management system implemented in H1. This is optimising labour costs,

prioritising value-add customer service activity and removing inefficiencies whilst also allowing

us to reduce temporary seasonal and agency labour costs.

This detailed programme also includes evolving our pricing architecture through a ‘good’,

‘better’, ‘best’ approach to range development across card, gift and celebration essentials,

enabling product margin improvements.

Property costs, which cover business rates, insurance and service charges (rent is reflected in

depreciation and interest costs as a result of the lease accounting rules in IFRS 16) increased

by£0.3 million or 1.2%, compared to an increase in the overall size of the store portfolio of 3%.

Other direct expenses include warehouse costs, store opening costs, utilities, maintenance,

point of sale and pay-per-click expenditure. We have seen some direct costs increase year

on year including energy commodity costs and costs of transmission and distribution. The

Group continued to benefit from its long-term energy hedge in FY25, which fixed commodity

unit costs at FY22 levels until September 2024. Following expiration of this hedge, we have

seen increases in commodity costs in the last third of the year. We continue to have good

visibility of commodity costs going forward, with the majority of the Group’s requirements out

toSeptember 2026 secured.

EBITDA and operating profit

FY25

£m

FY25

% Sales

FY24

£m

FY24

% Sales

Group sales 542.5 510.9 –

Gross profit 193.8 35.7% 184.9 36.2%

Other operating income – – 2.0 0.4%

Operating expenses (66.3) (12.2%) (64.3) (12.6%)

EBITDA 127.5 23.5% 122.6 24.0%

Adjusted EBITDA 128.6 23.7% 120.6 23.6%

Depreciation & amortisation (12.2) (2.2%) (10.4) (2.0%)

Right-of-use asset depreciation (36.4) (6.7%) (34.7) (6.8%)

Impairment reversals/(charges) 0.4 0.1% (1.1) (0.2%)

Operating profit 79.3 14.6% 76.4 15.0%

Adjusted operating profit 80.7 14.9% 75.5 14.8%

Operating expenses (excluding depreciation and amortisation) include remuneration for

central and regional management, business support functions, design studio costs and

business insurance together with central overheads and administration costs.

Total operating expenses have increased £2.0 million compared to the prior year, £3.4 million

of which arises from acquisition-related activity – annualisation of SA Greetings, plus the

in-year acquisition of Garven and Garlanna. This also includes the one-off impact of a write

down of trade debtors at SA Greetings. We have also incurred one-off restructuring costs

associated with the closure of the Getting Personal website and streamlining central support

operations as well as transaction costs related to the acquisitions of Garlanna and Garven

totalling £1.9million, which have been excluded from Adjusted results (see page 170).

We have seen successful early results from our productivity and efficiency programme,

Simplify and Scale, which has seen operating expenditure prior to acquisitions and one-off

costs decrease. This programme and the focus on cost efficiency has enabled us to continue

to invest in key areas such as major long-term IT projects and in marketing, where spend has

historically been very low, whilst reducing our overall core expenditure. The net impact of the

above has seen the operating expenses as a percentage of sales reduce by 0.3% year on year

in spite of the inflationary headwinds seen in FY25.

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Card Factory plc Annual Report and Accounts 2025

As a result, driven primarily by the improved trading performance, EBITDA improved to

£127.5million (FY24: £122.6 million); however, the reduced gross margin as a result of increase

in the National Living Wage, means EBITDA margin fell slightly from 24.0% to 23.5%.

Right-of-use asset depreciation has increased by £1.7 million in FY25, this is a result of an

overall increase in the store portfolio in the past couple of years, a higher overall average asset

value per store and gains in FY24 on disposal of lease assets. We maintain an average lease

term at inception across the portfolio of five years, with a break clause typically at three years,

meaning in many cases the time to the next lease event is less than 2.5 years. On average 20%

of the lease portfolio renews each year, enabling us to capture reductions in market rents

where available. During FY25, we achieved net rent reductions on average of around 7%,

which will flow through depreciation charges in future years.

EBITDA after deducting depreciation and interest charges relating to store leases, was

£83.5million (a margin of 15.4%) in FY25 compared to £81.8 million in FY24 (a margin of 16.0%).

Depreciation and amortisation, at £12.2 million, was higher than the prior year which reflects

the increased capital investment over the last two years and also amortisation related to

intangible assets, principally customer-related assets and brands, recognised as a result

of the acquisitions of Garlanna and Garven, see notes 10 and 29 in the Financial Statements

on pages 147 and 162 for further detail.

Profit Before Tax

FY25

£m

FY25

% Sales

FY24

£m

FY24

% Sales

Group sales 542.5 510.9

Operating profit 79.3 14.6% 76.4 15.0%

Gain on acquisition – – 2.6 0.5%

Net finance costs (15.2) (2.8%) (13.4) (2.6%)

Profit Before Tax 64.1 11.8% 65.6 12.8%

Non-underlying transactions 1.9 0.4% (3.5) (0.6%)

Adjusted Profit Before Tax 66.0 12.2% 62.1 12.2%

Net finance costs increased by £1.8 million to £15.2 million, which includes interest paid on

bank debt, amortisation of refinancing costs and lease interest, offset by interest income

earned on cash investments.

The composition of net finance costs is set out in the table below.

FY25

£m

FY24

£m

Interest on bank loans and overdrafts 6.4 6.5

Interest received on deposits (0.2) –

Loan issue cost amortisation 1.0 0.6

IFRS 16 leases interest 8.0 6.3

Total finance expenses 15.2 13.4

FY25

£m

FY24

£m

IFRS 16 depreciation 36.0 34.5

IFRS 16 leases interest 8.0 6.3

Total IFRS 16 44.0 40.8

IFRS 16 depreciation includes impairment and gains/losses on disposal. Total costs in this table reflect lease costs not

included in the calculation of EBITDA, above.

The average cost of debt, taking into account margin, indexation and the impact of hedging

activity, in the period was 7.1% (FY24: 7.4%). This decrease was a result of a lower margin rate

achieved in the refinancing completed in April 2024 in addition to gradually lowering market

rates of interest. As a result, bank loan interest reduced year on year despite a higher level

ofoverall borrowings as a result of the recommencement of dividends and the acquisitions

ofGarven and Garlanna.

Loan issue cost amortisation of £1.0 million includes a £0.5 million one-off charge as a result

of the refinancing completed in April 2024. IFRS 16 leases interest has increased, reflecting

both the increase in size of the store portfolio and changes in market interest rates reflected in

renewals. Our average lease term is five years, with higher rates of interest applicable on new

and renewed leases compared to those entered into five years ago.

Adjusted Profit Before Tax, which excludes the impact of one-off transactions in the period that

are not reflective of the Group’s underlying trading performance, was £66.0 million compared

to £62.1 million in FY24, an increase of 6.3%. Adjusted PBT margin of 12.2% is in line with the

prior year, despite the significant inflationary headwinds absorbed in FY25.

Reported Profit Before Tax for the year was £64.1 million, down £1.5 million from £65.6 million

for the previous year.

CFO’S REVIEW CONTINUED

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Company Information

The total reported profit before tax for the year includes non-recurring finance charges of

£0.5 million in respect of the refinancing completed in April 2024, £1.0 million of transaction

costs and amortisation due to the acquisitions of Garven and Garlanna, £1.9 million of one-off

restructuring costs and unrealised gains on derivatives of £1.5 million. These items are not

considered to be reflective of the underlying trading performance of the Group or they are

one-off in nature and as such have been excluded from Adjusted PBT. (FY24: One-off gains

in relation to SA Greetings gain, Covid provision release and Getting Personal impairment

excluded totalling £3.5 million from Adjusted PBT).

Taxation

The tax charge for FY25 of £16.3 million reflects an effective tax rate of 25.4% and has

increased £0.2 million compared to FY24.

The effective rate of tax for the year is higher than the equivalent rate applied for the same

period last year (24.5%) largely due to the annualisation of increases in corporation tax rates

effective from 1 April 2023. The rate is slightly higher than the standard rate applicable to the

current financial year (25.0%).

The Group makes UK corporation tax payments under the ‘Very Large’ companies’ regime

and thus pays its expected tax bill for the financial year in quarterly instalments in advance.

Corporation tax payments in FY25 totalled £16.7 million (FY24: £13.5 million).

Earnings per share

The net reported result for the year was a Profit after tax of £47.8 million, decreased from

£49.5 million in FY24. As a result, basic earnings per share (EPS) for the year was 13.8 pence,

with diluted EPS of 13.7 pence.

FY25 FY24

Profit after tax (£m) 47.8 49.5

Adjusted EPS (pence) 14.3 pence 13.5 pence

Basic EPS (pence) 13.8 pence 14.4 pence

Diluted EPS (pence) 13.7 pence 14.3 pence

Adjusted EPS, which excludes the post-tax effect of one-off transactions in the period, was

14.3 pence compared to 13.5 pence in FY24. A reconciliation of all Alternative Performance

Measures is set out in the appendix on page pages 169 to 172.

Cash flows

FY25

£m

FY24

£m

Cash from Operating Activities (after tax) 88.9 105.2

Cash used in Investing Activities (40.5) (30.0)

Cash used in Financing Activities (42.9) (73.2)

Impact of foreign currency exchange rates (0.1) (0.8)

Net cash flow for year 5.4 1.2

Operating cash flows less lease repayments 43.3 61.5

Operating cash conversion (%) 82.9% 96.8%

Free Cash Flow 17.3 27.1

Adjusted Free Cash Flow 29.0 27.1

The Group continued to deliver strong cash performance in FY25, with cash from operations

(before corporation tax payments) of £105.6 million. This reflects cash outflows considered

one-off in nature of £11.7 million (related to the refinancing, acquisition costs and covid

provision settlements) or due to timing differences on working capital outflows due to an

additional weekly payment run falling into FY25 compared to the previous and subsequent

year. As a result cash from operations decreased from £118.7 million in the prior year.

Working capital outflow increased, partially due to the timing of payments considered one-off

in nature of £6.0 million compared to the prior year. Total fees of £1.6 million were paid as a

result of the refinancing completed in April 2024. Furthermore, £3.3 million was paid in FY25

asa settlement of part of the remaining Covid provision, which is non-recurring.

Operating cash conversion, which is the ratio of Cash from Operations to EBITDA, decreased

asa result of the outflows in working capital as above to 82.9% (FY24: 96.8%).

Capital expenditure decreased to £18.4 million in the year (FY24: £27.8 million) as expected,

aswe continued to invest in infrastructure and growth projects to support our strategy.

Free cash flow, which we define as net cash before M&A activity, distributions or debt

repayments, was £17.3 million. Adjusted free cashflow has increased year on year to

£29.0million when the impact of one-off cash outflows are excluded.

We invested £22.5 million in the acquisitions of Garven and Garlanna during the year and paid

total dividends of £19.8 million in respect of a final dividend for FY24 (4.5 pence per share) and

an interim dividend for FY25 (1.2 pence per share).

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Card Factory plc Annual Report and Accounts 2025

Acquisitions

During the year, we accelerated our international growth plans by completing two acquisitions

– Garlanna in the Republic of Ireland and Garven in the United States.

On 4 September 2024, the Group acquired 100% of the issued equity of Garlanna Holdings

Limited (‘Garlanna’) for enterprise value of €3.6 million (£2.9 million) calculated on a cash free,

debt free basis. This consideration was settled in cash funded from existing facilities.

Garlanna trades as a publisher and wholesale supplier of cards, wrap and gift bags in the

Republic of Ireland. Garlanna’s historical revenues have typically been less than 1% of the

consolidated annual revenue of the Group. The acquisition will strengthen the Group’s

position within the Republic of Ireland market and is expected to provide further wholesale

opportunities, particularly in the convenience sector.

On 4 December 2024 the Group acquired 100% of the members’ interest of Garven Holdings,

LLC (‘Garven’) for enterprise value of $25.0 million (£19.6 million) calculated on a cash free,

debt free basis. This consideration was settled in cash funded from existing facilities.

In line with cardfactory’s growth plan, this acquisition accelerates our partnerships strategy

in one of our key international target markets. It marks cardfactory’s physical entry into the

US gift and celebration essentials market, which represents the biggest market globally at

c.£70 billion. Garven has an established customer base of general and specialty retailers

which will allow cardfactory to drive design and buying synergies, alongside opportunities

to introduce its own ranges into the US wholesale market.

Garven’s historical revenues have typically been less than 5% of the consolidated annual

revenue of the Group. In line with cardfactory’s growth plan, this acquisition accelerates our

partnerships strategy in one of our key international target markets.

We look forward to exploring the full range of potential growth opportunities with our

new colleagues in both businesses, and enhancing our presence and offer in both the

USandIreland.

The accounting for the acquisitions has been completed, and has resulted in the recognition of

intangible assets of £12.9 million and £8.7 million of goodwill. See note 29 to the Consolidated

Financial Statements for more information. We expect to exclude the amortisation of acquired

intangibles from our Adjusted PBT going forward.

Capital expenditure

Total capital investments to grow the business and deliver the strategy were £18.4 million

inFY25, decreased from £27.8 million in FY24.

Key investments included a point of sale (POS) upgrade in stores which is expected to roll out

across FY26, developing our network infrastructure in stores and the continued delivery of our

long-term project to upgrade our business support systems, with extended ERP functionality

inrelation to inventory management.

In addition, we continue to invest in opening new stores and refreshing the store estate,

including continued delivery of our store evolution programme, which has enabled expansion

of gift and celebration essentials in store, without negatively impacting card LFLs.

Looking forward, we continue to expect capital expenditure will average £20 million per

annum through to FY27. FY26 priorities include the POS rollout across our store estate,

implementation of enhanced ERP functionality and other infrastructure projects to enable us

to deliver online growth and improved partnership capabilities.

Net debt

FY25

£m

FY25

Leverage

FY24

£m

FY24

Leverage

Current borrowings 0.1 7.1

Non-current borrowings 73.9 37.9

Total borrowings 74.0 45.0

Add back capitalised debt costs 1.4 0.7

Gross bank debt 75.4 45.7

Less cash (16.5) (11.3)

Net Debt (exc. Leases) 58.9 34.4

Leverage (exc. Leases) 0.5x 0.3x

Adjusted Leverage (exc. Leases) 0.7x 0.4x

Lease liabilities 110.4 100.8

Net Debt (inc. Leases) 169.3 135.2

Leverage (inc. Leases) 1.3x 1.2x

CFO’S REVIEW CONTINUED

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Strategic Report Governance Financial Statements

Company Information

Our balance sheet remains strong. In FY25 we delivered strong underlying operating cash flows

and made disciplined investments in line with the principles of our capital allocation policy.

Net debt increased to £58.9 million in FY25, which includes expenditure on acquisitions,

dividend payments and the one-off cash flow impacts described above. We have accelerated

our international growth strategy with the acquisitions of Garven and Garlanna, for cash

consideration of £22.5 million, net of cash acquired as above. We have also recommenced

dividends payments in FY25, with total payments of £19.8 million.

The Group focuses on net debt excluding lease liabilities, this reflects the way the Group’s

covenants are calculated in its financing facilities. Leverage compares the ratio of net debt to

EBITDA as calculated on page 66, Adjusted Leverage reflects adjustments in the Group’s bank

facilities to deduct lease-related EBITDA charges from EBITDA. A full description, calculation

and reconciliation of Alternative Performance Measures is provided in the appendix on pages

169 to 172. Both metrics remain comfortably below the Group’s long-term target to keep

leverage below 1.5x throughout the year.

The Group’s banking facilities and amounts drawn in the current and prior periods are

summarised in the table below:

Facility

31 January

2025

£m

31 January

2024

£m

£18.75m Term Loan ‘B’ – 18.8

£125m/£100m Revolving Credit Facility 75.0 26.0

Overdraft facilities – 0.2

Property mortgage 0.4 0.6

Accrued interest – 0.1

Gross bank debt 75.4 45.7

On 26 April 2024, the Group successfully concluded a refinancing of its debt facilities, having

agreed a new four-year £125 million committed revolving credit facility with a syndicate

of banks. The previous revolving credit facility and Term Loan B have been fully repaid

andcancelled.

The new facilities have an initial maturity date in April 2028, with options to extend by up to

19 months, subject to lender approval. The facilities include a £75 million accordion, which

can be drawn subject to lender approval. The interest margin on the facilities is dependent

upon the Group’s leverage position, with margins between 1.9-2.8%, which is lower than the

previousfacilities.

The new facilities include covenants for a maximum leverage ratio (calculated as net debt

excluding leases divided by EBITDA less rent costs for the prior 12 months) of 2.5x and a fixed

charge cover ratio of at least 1.75x. The leverage covenant is consistent with the Group’s

definition of Adjusted Leverage. The Group expects to operate comfortably within these

covenant levels for the foreseeable future. These facilities provide a firm platform from which

we can execute our strategy with all previous dividend and capital limits removed.

At 31 January 2025 the Group had undrawn committed facilities of £48.8 million (FY24: £74.0million),

resulting in total cash and committed facilities of £65.3 million (FY23: £85.3 million).

The Group’s cash generation profile typically follows an annualised pattern, with higher cash

outflows in the first half of the year associated with lower seasonal sales and investment in

working capital ahead of the Christmas season. The inverse is then usually true in the second

half, as Christmas sales led to reduced stock levels and higher cash inflows. As a result, net

debt at the end of the year is usually lower than the intra-year peak, which typically occurs

during the third quarter and also higher than the intra-year low, which is usually at the end

of December. The Group’s intra-year working capital requirement (reflecting the difference

between these two points) is typically £70-80 million).

Capital structure and distributions

The Group has a disciplined capital allocation approach, which aims to balance investing to

deliver the strategy with sustainable, progressive cash returns to shareholders and long-term

growth in shareholder value.

Our capital allocation policy has four key tenets, each with relevant guardrails and controls

designed to ensure balanced application:

1. Maintain a strong balance sheet, targeting a maximum leverage of 1.5x during the year;

2. Invest to deliver the strategy, investment to accelerate progress must deliver attractive

returns relative to cost of capital;

3. Regular, progressive cash returns to shareholders, via an ordinary dividend with dividend

cover between 2-3x adjusted earnings; and

4. Disciplined use of surplus cash, total returns will not exceed free cash generated.

Investment may include M&A activity, where the Board considers that the proposed

transaction delivers both attractive returns and a significant enhancement or acceleration to

our strategic objectives.

During FY25, we invested £22.5 million in the acquisitions of Garlanna and Garven,

asdescribed on page 66.

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Card Factory plc Annual Report and Accounts 2025

On 24 September 2025, the Board declared an interim dividend for FY25 of 1.2 pence per share, which was

paid on 11 December 2024 to shareholders on the register on 1 November 2024.

At the Annual General Meeting on 19 June 2025, the Board will recommend to shareholders a final dividend

of 3.6 pence per share for the year. If approved, the dividend will be paid on 27 June 2025 with a record date

of30 May 2025.

At the present time, considering the ordinary dividends paid and proposed in respect of FY24 and FY25,

completed acquisitions, the Group’s liquidity profile and available cash and committed facilities for FY26,

theBoard does not consider there to be surplus cash for furtherreturns.

The Board remains confident in the future cash flow generation prospects of the Group and, infuture,

wherethe Board concludes that the Group has excess cash, taking into account, inter alia, the performance

and prospects of the Group, together with any potential investment opportunities, the Board expects

tomake additional returns to shareholders. The Board will consider at the time the most appropriate method

ofreturning such cash to shareholders.

Outlook

The Board remains confident in the compelling growth opportunity for our business, in particular to grow our

share of our customers’ total celebrations spend.

Our expectation to deliver mid to high single digit percentage growth in Adjusted Profit Before Tax in FY26

isunchanged.

This will be underpinned by the continued growth of our core stores business, integration and delivery from

our acquired businesses and ongoing successful execution of our efficiency and productivity programme to

maintain PBT margin rates.

Further, we target free cash productivity of between 60-70%, supporting continued progressive cash returns

toshareholders in line with our capital allocation policy.

The macro-environment remains uncertain and cost inflation, particularly in wages and employment taxes in

the UK, will continue at elevated levels into FY26.

We are well placed to manage these challenges and are confident in our ability to offset cost inflation over

the course of the year to deliver our expectation of profit growth. We currently expect the phasing of profit

delivery in FY26 to be similar to FY25, reflecting the seasonal nature of the business and the timing of wage

andtaxinflation in H1.

Matthias Seeger

Chief Financial Officer

7 May 2025

CFO’S REVIEW CONTINUED

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Company Information

Managing our risks

Risk management, an integral aspect of

conducting business, involves striking a

balance between risk and reward, dictated

by careful assessment of potential outcomes,

impacts and risk appetite.

Approach to risk management

cardfactory’s risk management framework

establishes the identification, assessment,

mitigation and monitoring of risks that

could potentially impede our objectives.

This framework uses a top-down approach

to pinpoint the Group’s principal risks

and a bottom-up strategy for identifying

operationalrisks.

A Group Risk Register evaluates the business’

gross level of risk (likelihood and impact), the

extent of mitigating controls and the resultant

net level of risk. It also details any forthcoming

plans to mitigate or reduce risks. Risk appetite

and target risk are designated to each risk.

Each risk has an assigned senior leadership

team member. Critical net rated risks are

examined and updated four times a year,

while all others undergo an annual review.

Risks are discussed at the senior leadership

team’s monthly meeting on a rolling basis.

The Head of Internal Audit & Loss Prevention

produces a risk management update at each

Audit & Risk Committee meeting, including an

overview of changes to specific risks reviewed

during the period, along with a summary of

the Group Risk Register.

With the oversight of the Board and detailed

scrutiny by the Audit & Risk Committee,

members of the senior leadership team are

responsible for identifying emerging risks and

executing mitigation plans. A comprehensive

review of all risks and the adequacy of the

process to identify up and coming risks was

conducted at the end of the financial year.

The Audit & Risk Committee assists the Board

in maintaining a robust risk management

framework by approving the risk management

process and frequently reviewing the Group’s

principal risks and risk appetite. More

information on risk governance can be found

in the Audit & Risk Committee Report on

pages 87 to 90.

Internal Audit also offers independent

assurance to management and the Audit &

Risk Committee over specific risk areas as part

of the Group’s annual internal audit plan.

RISK MANAGEMENT

Risk management is

an essential part of

doing business, and

must be given the

attention it deserves.”

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Card Factory plc Annual Report and Accounts 2025

Identify

•

Risk registers compiled.

•

Risk mapping to identify

emerging issues.

Assess

•

Determining the likelihood

of risk occurrence.

•

Evaluating the potential

impact.

Mitigate

•

Agreeing actions to manage

the identified risks.

•

Ensuring control measures

are in place.

Monitor

•

Reviewing the effectiveness

of controls.

•

Maintaining continued

oversight and tracking.

Card Factory plc Board

Maintains sound risk management and internal control systems,

assesses principal risks.

Audit & Risk Committee

Sets out the risk management framework,

assesses the effectiveness of risk management and internal control systems.

Maintains oversight of risk monitoring activities.

Internal Audit

Coordinates risk management activities through review of risk registers.

Agrees on risk mitigation plans and preparation of risk reporting.

Operational Management

All colleagues are responsible for managing risks within their area

of responsibility, overseen by their respective senior leadership team member.

Senior Leadership Team

Manages risks within each of their respective areas of responsibility.

Is accountable for mitigating risks where appropriate, reviewing and

updating risks on a rolling monthly basis. This group is also primarily responsible

for monitoring, identifying and reporting emerging risks.

Bottom up

Top down

1 IT infrastructure & security

2 Business continuity

3 Supply chain

4 Cyber

5 Geopolitical instability

6 Regulatory compliance

7 ESG compliance & climate

change risks

8 Cost price inflation

9 Loss of position as leading

value specialty retailer forcards

Likelihood

Impact

See pages

71 to 73 for

a detailed review

of our principal

risks and

uncertainties

The risks noted above are shown on a net basis.

Risk management process

Principal risks and

uncertainties

As noted in FY24, an extensive review

of the risk management framework

was undertaken, which identified

opportunities to further enhance the

risk management framework. During

the year, several enhancements to the

framework have been implemented.

These include updating risk

management roles and responsibilities,

and introducing supplementary

impact criteria – this helps guide risk

owners when assessing risks as well as

introducing a new reporting format to

the Audit & Risk Committee.

The Audit & Risk Committee performs

a thorough assessment of the principal

risks facing the Group at each meeting,

specifically, April, June, September 2024

and January 2025. Modifications have

been made to the principal risks with

the addition of ‘loss of position as the

leading value specialty retailer for cards’

in January 2024, whilst one risk has seen

an increase and two have decreased in

their net risk score.

On a quarterly basis, emerging risks to

the Group are discussed by the senior

leadership team and are presented

to the Audit & Risk Committee for

consideration. These are either added

to the Group Risk Register, retained on

the emerging risk list or are discounted.

Four emerging risks have been identified

which resulted in two risks being

consolidated with existing risks on the

Group Risk Register, and two remaining

on the emerging risk list. The two

emerging risks incorporated into existing

Group risks are ‘increasing helium

costs and environmental impact’ and

‘increasing price of stamps/impact on

card sales and delivery schedule’.

RISK MANAGEMENT CONTINUED

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Company Information

Operational risks

Risk Trend Description Mitigation

IT infrastructure

and security

Link to strategy

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.

• Also see Cyber risk below for additional mitigations.

Business

continuity

Link to strategy

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 policy are in place, which are reviewed annually and

approved by the senior leadership team.

• Crisis management, business continuity and IT disaster recovery 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.

• The business continuity and IT disaster recovery plans are tested annually with lessons learned being

produced and plans updated accordingly.

Cyber

Link to strategy

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.

• Two-factor authentication (2FA) has been implemented on applicable systems.

• Annual penetration tests performed and patch management policy in place and executed.

• New password policy introduced in line with ‘cyber essential’ to provide increased access security.

• ‘Bring Your Own Device’ (BYOD) mobile device management system is now mandatory when accessing

cardfactory systems for all mobile BYOD devices and colleagues can no longer access business information

unless the devices is enrolled and meets company requirements.

• Point of sale meets all payment card industry (PCI) compliance requirements and PCI training is refreshed

annually and completion rates tracked.

• Cyber expertise is employed within the business and appropriate cyber controls are in place. Plans designed

to continue to address multiple cyber risks.

• Data Protection Officer in place.

Risk trend

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

Increasing DecreasingStable

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Card Factory plc Annual Report and Accounts 2025

Risk trend

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

Increasing DecreasingStable

Risk Trend Description Mitigation

Supply chain

Link to strategy

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 offset supply or cost pressures.

• Detailed critical path process in place for each season detailing plans from design to delivery, which is

reviewed weekly and supported by quarterly 2-way supplier KPI reviews, with actions taken if issues arise.

• All overseas suppliers sign up to an online compliance platform providing all necessary documentation

including adoption of minimum supply chain standards (including ethical and technical audits, e.g. BSCI,

SA8000 and ISO9001) and adherence to anti-bribery and corruption and modern slavery standards.

Compliance is supported through our Sedex membership 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 leadership

team regarding any potential impact with plans drawn up to offset any delays in goods being received.

• Multiple shipping agents and lines are utilised.

Regulatory

compliance

Link to strategy

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 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.

Strategic risks

Risk Trend Description Mitigation

ESG compliance

and climate

change risks

Link to strategy

Failure to meet requirements of institutional

investors, customers and other stakeholders

on Environmental, Social and Governance

(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 36 to 43.

RISK MANAGEMENT CONTINUED

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Company Information

Risk Trend Description Mitigation

Loss of position

as leading value

specialty retailer

for cards

Link to strategy

NEW

Changing customer sentiment/behaviours/

dramatic shift in the market and/or the

deterioration of our value proposition

and perception could result in decline of

penetration and footfall negatively impacting

sales and profits.

• Monthly tracking of market data, customer metrics, brand data and transaction metrics.

• Tracking of competitiveness of offers.

• Targeted campaigns and promotions to mitigate deterioration of value perception.

• Development of online presence as additional channel.

Financial risks

Risk Trend Description Mitigation

Geopolitical

instability

Link to strategy

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

Link to strategy

Increasing input costs could result in higher

product retail prices which could lead to lack

ofdemand/lost sales impacting profits.

• 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.

• Helium contracts negotiated to manage costs.

Risk trend

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

Increasing DecreasingStable

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Card Factory plc Annual Report and Accounts 2025

In accordance with Sections 414CA and 414CB of the Companies Act 2006, the following table summarises where you can find further information in this Annual Report on each of the key areas

of disclosure that these sections require.

NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT

Reporting requirement Relevant information Policies and standards

Information necessary to understand the Company’s development, performance and position and the impact of its activity

relating to:

1. Environmental matters, sustainability and climate-related information (including governance arrangements, the impact

of the Company’s business on the environment).

Pages 36 to 55 Page 72

2. The Company’s employees. Pages 35, 41 and 59 Page 59

3. Social matters. Pages 42 and 57 Pages 39 and 40

4. Respect for human rights. Pages 58 and 72 Page 72

5. Anti-corruption and anti-bribery matters. Pages 72 and 86 Page 72

Required information

6. Description of the Company’s business model. Pages 18 to 21

7. Description of policies (and any due diligence processes implemented pursuant to those policies) pursued by the

Company in respect of items 1 to 5 above and a description of the outcome of those policies.

See the sections referred to above

8. A clear and reasoned explanation if the Company does not pursue any policies in respect of the above matters. Not applicable

9. Description of the principal risks relating to items 1 to 5 above and where relevant and proportionate, a description

of the business relationships, products and services which are likely to cause adverse impacts in those areas of risk

andadescription of how it manages such risks.

Pages 69 to 73

10. Description of the non-financial key performance indicators relevant to the Company’s business. Pages 56 to 59

11. Where appropriate, references to and additional explanations of amounts included in the accounts. The accounts are produced in

accordance with UK-adopted

international accounting standards and

applicable law. Seepages169 to 172 for

Alternative Performance Measures.

The Strategic Report, which was approved by the Board on 6 May 2025 and is set out on pages 1 to 74.

Darcy Willson-Rymer

Chief Executive Officer

7 May 2025

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Governance

76 Chair’s letter – Corporate Governance

77 Governance at a glance

78 Board of Directors

80 Corporate Governance Report

87 Chair’s letter – Audit & Risk Committee

88 Audit & Risk Committee Report

91 Chair’s letter – Remuneration Committee

94 Directors’ Remuneration Report –

Remuneration Policy

102 Annual Report on Remuneration

115 Chair’s letter – Nomination Committee

116 Nomination Committee Report

117 Directors’ Report

122 Statement of Directors’ responsibilities

Strategic Report Governance Financial Statements

Company Information

Governance

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Card Factory plc Annual Report and Accounts 2025

CORPORATE GOVERNANCE

CHAIR’S LETTER

Paul Moody

Non-Executive Chair

Dear Shareholder

Encouraging progress has been made during FY25 in pursuing the ‘Opening Our New Future’

strategy. The Company has delivered both sales growth and profit growth, particularly in

the UK & Ireland store estate, whilst investing in key strategic growth areas, notably the

acquisitions of Garlanna and Garven.

The Board has continued to be focused

on governance and oversight to support

setting strategic priorities and targets

and supporting the executives and senior

leadership in building a sustainable, growing

business. The Board are particularly pleased

with the endorsement of our effectiveness

from the external Board review, but are not

complacent as we and the senior leadership

team continue to address new challenges,

helping to steer the cardfactory Group

through continuing inflationary pressures and

the consequences of macro-economic and

geopolitical uncertainty.

There were a number of changes to the

Board during the year, welcoming Pam Powell

as Senior Independent Director, replacing

Roger Whiteside in June 2024, and Tripp

Lane stepping down in July 2024. Whilst far

from the primary objective, these changes

significantly improved the overall diversity of

the Board, which was an objective from the

previous financial year. We recently concluded

that the Board is appropriately diverse, across

a range of criteria (of which gender and

ethnicity are just part) and do not consider

it to be in the interests of shareholders, or

the effectiveness of the Board, to recruit

an additional director solely to achieve the

recommended 40% of women members.

The Board will keep all aspects of experience

and diversity under review.

I welcomed the opportunity to meet with

a number of our shareholders during the

year, to discuss the Company’s performance,

receive feedback on the strategic direction

and to understand any concerns they might

have had regarding governance. These

meetings also satisfied the requirement to

consult shareholders following our 2024 AGM.

The insight, challenge and preferences of

our stakeholder groups continues to be fully

evaluated in the Board’s decision making.

I am grateful to Matthias Seeger, who has

assumed responsibility for being the Board

member sponsoring the sustainability agenda,

as well as overseeing implementation of the

ESG strategy across the business. I continue

to hugely enjoy my role as designated Board

member for colleague engagement, ensuring

that the Board reflects on the views and

priorities of this group, alongside the other

key stakeholder groups.

The Board has continued to review corporate

governance developments, including the

changes to be introduced by the Corporate

Governance Code 2024 and work is

underway to comply with the updated code,

asappropriate.

With increased analyst reporting on

cardfactory, now eight independent

contributors, the Board appreciates the

efforts of the Executive Directors to further

enhance engagement and transparency with

our investors and prospective investors.

We look forward to welcoming shareholders

to our AGM on 19 June 2025.

Paul Moody

Chair

7 May 2025

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Company Information

Board member experience

Design/

Manufacturing Retail

Online/

Omnichannel International Wholesale Franchise

Brand

Owner ESG

Supply

Chain Finance Marketing

Listed

Company

Paul Moody ■ ■ ■ ■ ■ ■ ■

Darcy Willson-Rymer ■ ■ ■ ■ ■ ■ ■

Matthias Seeger ■ ■ ■ ■ ■ ■ ■ ■ ■

Pam Powell ■ ■ ■ ■ ■ ■ ■

Rob McWilliam ■ ■ ■ ■ ■ ■ ■

Indira Thambiah ■ ■ ■ ■ ■ ■ ■ ■

GOVERNANCE AT A GLANCE

Compliance statement – Code principles

The following table references sections of this report that demonstrates how the Company has

complied with the principles of the Code:

Pages Pages Pages

Board leadership and

company purpose

Division of

responsibilities

Audit, risk and

internal control

Promoting and

preserving long-term

value

2-9 Board structure and

independence

80 Audit & Risk

Committee Report

87-

Purpose, values,

strategy and culture

14,

15,

24 &

Board responsibilities 80 Independence and

effectiveness of

external auditor and

internal audit

Section 172 statement 56 Board experience 77 Fair, balanced and

understandable

Board engagement

with shareholders and

stakeholders

56-

Composition,

succession and

evaluation

Risk management

and internal control

framework

69-

Managing Director

conflicts of interests

85 Nomination

Committee Report

115-

116

Remuneration

Workforce policies and

practices

35,

Board succession

planning

116 Remuneration

Committee Report

(including Policy)

91-

114

Board evaluation 84-

Code compliance

The Company fully complied with the

principles and provisions of the UK Corporate

Governance Code (2018) published by the

Financial Reporting Council (Code) during

the financial year. The Company intends to

comply with the 2024 version of the Code

from 1 February 2025. The Code can be

obtained from frc.org.uk.

The Board has focused on ensuring it

provides strategic challenge and direction

to the executive and senior leadership team

and supporting the framing of the strategic

priorities, which include reassessment of

values, cultural development and addressing

stakeholder feedback. Specific examples

include undertaking an annual review

of the strategic plan and reviewing the

specific priorities to support delivery of the

initiatives, with a detailed operating plan

to support achievement of the ambitious

multi-year change agenda for the business

to realise long-term growth. The Board and

its Committees have also adopted detailed

activity schedules to ensure that over the

course of a year, it undertakes the reviews

and assessments required by the Code.

Board gender

Jan 2025

■ Female

■ Male

Board ethnicity

Jan 2025

■ Ethnic minority

■ White

Jan 2025

■ 0-2 yrs

■ 2-5 yrs

■ 5-7 yrs

See the Board of Directors onpages 78-79.

Board tenure

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Card Factory plc Annual Report and Accounts 2025

BOARD OF DIRECTORS

Paul Moody

Non-Executive Chair

Darcy Willson-Rymer

Chief Executive Officer

Matthias Seeger

Chief Financial Officer

Date of appointment

19 October 2018

Paul has extensive retail experience having

served 20 years at Britvic plc, including

eightyears as Chief Executive Officer.

Paulis currently Chair of 4imprint Group

plc, having been appointed in February

2016. Paul was Chair of Johnson Service

Group plc between May 2014 and August

2018 and was a Non-Executive Director

and Chair ofthe Remuneration Committee

of Pets at Home plc from March 2014 until

July 2020. Paul assumed the interim role

as Executive Chair of Card Factory plc from

1July 2020 to8 March 2021.

Paul is the designated Non-Executive

Director for workforce engagement.

Current external appointments

Non-Executive Chair of 4imprint Group plc

(LSE:FOUR).

Date of appointment

8 March 2021

Prior to joining the Company, Darcy served

as CEO of Costcutter Supermarkets Group

for eight years and was CEO of Clinton

Cards plc from 2011 to 2012. Before joining

Clinton Cards, Darcy held a range of roles

in international branded businesses,

including Managing Director (UK & Ireland)

of Starbucks Coffee Company, and senior

roles at Yum Restaurants International,

including Operations Director of KFC

GreatBritain, and Director of Operations

and Franchise, Europe, KFC and Pizza Hut.

Date of appointment

22 May 2023

Matthias was CFO of Ambassador Cruise

Line Limited between February 2022 and

May 2023, having previously been CFO

of Costcutter Supermarkets Group from

September 2015 to September 2021.

Previous roles include senior finance roles

with Procter & Gamble, in Germany, the

UK, Belgium and Switzerland, between

1991 and 2013. Matthias has a Master’s

Degree inEngineering and an MBA from

theUniversity of Texas.

Matthias is the Director accountable for

sustainability and ESG.

R N

Committee

membership

Audit & Risk

Remuneration

Nomination

Chair

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Strategic Report Governance Financial Statements

Company Information

Pam Powell

Senior Independent

Non-ExecutiveDirector

Robert (Rob) McWilliam

Independent

Non-Executive Director

Indira Thambiah

Independent

Non-Executive Director

Date of appointment

21 June 2024

Pam is an internationally experienced

blue-chip consumer FMCG marketeer,

with previous roles including senior global

positions at Unilever from 1989 to 2001,

and SAB Miller, from 2002 to 2011 as

Group Director, Strategy and Innovation.

Pam was previously Non-Executive Director

of Cranswick plc, vertically integrated UK

producer and suppliers of premium pork

and poultry products; Premier Foods plc

and A G Barr plc. Pam was a member of

Audit, Remuneration and Nomination

committees with each of these companies,

chaired the Remuneration Committees

of Cranswick plc and Premier Foods plc

and was a member of the Cranswick plc

ESGcommittee.

Current external appointments

Non-Executive Director & member of

ESGCommittee and the Audit and Risk

Committee of Origin Enterprises plc (AIM:

OGN)

Date of appointment

1 November 2021

Rob was Chief Financial Officer of Asda

from 2018 to 2021; and between 1997

and 2012 held a number of senior

roles within the Asda group including

Commercial Finance & Strategy Director

and Business Change Director. In between

his two periods with Asda, Rob was Vice

President, UK, Finance Director and then

Vice President of Consumables at Amazon

UK. Rob was Independent Director of YPO

(from 2017 to September 2021) and was

previously a Non-Executive Director of

Ten Entertainment Group plc where he

was also the Chair of the Risk and Audit

Committee.

Current external appointments

Rob is currently Non-Executive Director

and Audit Committee chair of the Solicitors

Regulation Authority, Non-Executive

Director of Venture Simulations Limited

and Non-Executive Director of Fruugo plc

(unlisted).

Date of appointment

1 September 2022

Indira is an experienced multi-channel

retail executive and consultant, with

previous roles including Head of Multi

-Channel for Home Retail Group (Argos

& Homebase) and Vice President, Europe

at online sales marketplace, Zulily. Indira

has successfully managed a number of

private businesses, most recently Roof-

Maker (CEO, 2018 to 2022). Indira has

also been an Independent Non-Executive

Director and member of the Remuneration

Committee at each of Superdry plc (2010 to

2013) and Yorkshire Building Society (2007

to 2010). Indira is a qualified Chartered

Accountant.

Current external appointments

Indira is currently Senior Independent Non-

Executive Director and Audit Committee

chair of Vivobarefoot Limited and Non-

Executive Director and Remuneration

Committee chair of Warpaint London plc

(AIM: W7L).

AR R N R RN NAR AR

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[[

Card Factory plc Annual Report and Accounts 2025

Committed to

the highest standards

Leadership and approach

The Board is committed to achieving the

highest standards of corporate governance.

The Board understands the importance

of its leadership in setting the culture and

values and in the achievement of long-term

sustainable success, while successfully

managing risks for our stakeholders.

We believe that good governance is

demonstrated by applying appropriate and

relevant principles and following the more

detailed provisions and guidance in a way that

enhances and protects the long-term value

of the business. This ensures a pragmatic

governance culture sits alongside the

entrepreneurial and community-minded

spirit which has enabled cardfactory to

develop into the business it is today.

Key governance activities

Key activities during the year included:

• Review of the strategic plan and extension

of the financial outlook to at least FY30.

• Review of the FY26 budget and annual

operating plan, including prioritising

strategic projects and investments to

support long-term growth.

• Assessment of acquisition opportunities

(including the acquisitions of Garlanna

in September 2024 and Garven in

December 2024) and the alignment with

strategicpriorities.

• Organisational design, including

identification of target operating model

toaccount for international expansion

and acquisitions.

• Externally conducted Board effectiveness

assessment, and review of size,

composition, skills, experience and

diversity of the Board, in parallel with

shareholder consultation following the

2024 AGM.

• Review of targets and progress in

establishing the foundations to achieve

our ESG ambitions.

• Succession planning for the Board and

the senior leadership team and their

directreports.

Board composition, balance

andindependence

The Board currently comprises six members.

During the FY25 financial year, eight Directors

served on the Board: Paul Moody, Roger

Whiteside (until 20 June 2024), Pam Powell

(from 21 June 2024), Tripp Lane (until 26 July

2024), Rob McWilliam, Indira Thambiah, Darcy

Willson-Rymer and Matthias Seeger.

The Code recommends that at least half the

board of directors of a UK-listed company,

excluding the chair, should comprise non-

executive directors, determined by the board

to be independent in character and judgement

and free from relationships or circumstances

which may affect, or could appear to affect,

the director’s judgement.

The Board considers all of the current

Non-Executive Directors as independent

Non-Executive Directors (within the meaning

of the Code).

Paul Moody was independent prior to his

appointment as Chair in October 2018. Paul

held the position as interim Executive Chair

between July 2020 and March 2021, following

the resignation of the previous CEO, pending

appointment of Darcy Willson-Rymer as

CEO. The Board has considered whether

the Chair’s independence may have been

compromised as a result of his interim role

as Executive Chair, but concurred that he

remains appropriately independent, but with

additional insights to support his challenge

of the leadership team.

The constitution of the Company’s Board

complies with the Code’s recommendation,

with three members of the Board being

judged to be independent and (excluding

theChair) two being non-independent

(i.e.two Executive Directors).

The Board considers the balance of skills and

experience of the Board to be appropriate

for its current requirements and is confident

that it continues to be an effective and

efficient decision-making body that supports

the Group’s strategy and growth.

The skills and experience of the Board

is kept under constant review, together

with succession planning for the Board

asawhole.

CORPORATE GOVERNANCE REPORT

The Chair is the nominated Board member

responsible for workforce engagement and

the CFO is the Board member responsible for

out sustainability strategy.

Board responsibility

The Company has a clear division of

responsibilities between the Non-Executive

Chair and the Chief Executive Officer.

Ingeneral terms, the Non-Executive Chair is

responsible for running the Board and the

Chief Executive is responsible for running the

Group’s business on a day-to-day basis.

This clear division of responsibilities, when

taken together with the schedule of matters

that the Board has reserved for its own

consideration, ensures that no one person

has unlimited and unchecked power to

make decisions that may have a material

impact on the Group as a whole. Acopy

of the matters reserved for the Board is

available on cardfactory’s investor website

(cardfactoryinvestors.com).

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See the Committee Reports

on pages 87-116.

[[

Strategic Report Governance Financial Statements

Company Information

Board attendance

During the year, the Board held nine scheduled meetings and 12 other ad hoc Board or sub-

committee meetings. The Committees of the Board also convened meetings during the year,

with attendance as follows:

Director Role

Scheduled

Board

meetings

Other

Board or

committee

meetings

Remuneration

Committee

(5 meetings)

Audit

& Risk

Committee

(4 meetings)

Nomination

Committee

(4 meetings)

Paul Moody

Non-Executive

Chair & Chair

of Nomination

Committee

9 of 9 1 of 1 5 of 5 – 4 of 4

Roger Whiteside

Senior

Independent Non-

Executive Director

2 of 2 0 of 0 1 of 1 3 of 3 0 of 1

Pam Powell

Senior

Independent Non-

Executive Director

6 of 6 1 of 1 3 of 4 1 of 2 2 of 3

Nathan (Tripp) Lane

Non-Independent

Non-Executive

Director

4 of 4 0 of 0 – – –

Rob McWilliam

Independent Non-

Executive Director

9 of 9 1 of 1 5 of 5 4 of 4 4 of 4

Indira Thambiah

Independent Non-

Executive Director

9 of 9 1 of 1 5 of 5 4 of 4 4 of 4

Darcy Willson-Rymer

Chief Executive

Officer

9 of 9 12 of 12 – – –

Matthias Seeger

Chief Financial

Officer

9 of 9 11 of 12 – – –

1. Roger Whiteside resigned on 20 June 2024.

2. Pam Powell was appointed 21 June 2024.

3. Nathan (Tripp) Lane resigned on 26 July 2024.

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Card Factory plc Annual Report and Accounts 2025

CORPORATE GOVERNANCE REPORT CONTINUED

Board activities and effectiveness

Board meetings are structured to ensure they focus on key strategic matters that affect the business and examples of topics reviewed during the year are set out below. Additionally, theBoard

considers any decisions that are within the matters reserved for the Board.

The Board had in place a schedule of matters that were discussed during the year and a similar schedule is in place for the current financial year. As part of normal planning, the Board puts

these schedules in place in advance of each financial year.

The Board meetings include a rolling agenda of key strategic, operational, governance and risk topics, as well as updates on financial and non-financial KPIs, key strategic programmes and

operational and financial performance, which includes periodic presentations from the senior leadership team. These ensure that the Non-Executive Directors remain informed of key

developments within the Group and the progress in achieving the strategic objectives.

The key topics discussed by the Board during the year were:

Strategy Performance Governance

• Group strategy evolution to FY30 and beyond.

• Annual operating plan and projects and investments to

align with the strategic plan.

• Group budget and investment priorities.

• IT strategy, cyber security and ERP investment review.

• Potential acquisitions and strategic alignment.

• Refinancing.

• Capital Allocation Policy.

• Trading performance including annual and interim results.

• Key project updates.

• KPIs and balanced scorecard performance.

• Seasonal, divisional and strategic initiative trading reviews.

• Market performance including customer data and insights.

• Garlanna and Garven acquisitions and review

ofperformance.

• Shareholder returns.

• Remuneration Committee assessment of business

performance for variable pay awards (annual bonus and

share awards).

• Health and safety performance.

• Stakeholder engagement, including shareholder

consultation following 2024 AGM.

• Externally conducted Board effectiveness evaluation

andinternal Committee effectiveness assessments.

• Reviews of performance against Board objectives.

• Board structure, experience, and diversity, including

SIDappointment.

• Senior leadership team appointments.

• Colleague engagement, policies and remuneration,

including diversity, equality and inclusion.

• ESG strategy, engagement, including support of

TheCardFactory Foundation.

• Succession planning.

• Governance and legal updates and approvals for matters

reserved for the Board.

• Risk and Internal Audit controls.

• Organisational design, including target operating model

totake account of acquisitions.

• Committee reviews as required by applicable Terms of

Reference and updates to Committee Terms of Reference.

All Directors receive papers in advance of Board meetings including regular reports from the senior leadership team covering the parts of the business they are responsible for. Minutes of all

Board and Committee meetings are taken by the General Counsel & Company Secretary. The minutes record actions, decisions and resolutions arising out of the topics discussed and summary

resolutions of actions accompany the minutes, which enables the Board to regularly monitor progress.

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Company Information

Board strategy review

The Board held its annual strategy review

with the senior leadership team in July 2024.

This focused primarily on development

and extension of the strategy and outlook

to at least FY30, understanding market

insights, assessment of the competition

and cardfactory’s customer perception of

value, and the evolution of the business

towards celebration occasions. This strategy

review also assessed the organisational

structure requirements to realise this plan,

which facilitated further development for

subsequent review later in the financial year.

Non-Executive Director meetings

The Chair and the other Non-Executive

Directors met on one separate occasion in

the year without Executive Directors being

present. They intend to continue to meet

regularly to ensure that any concerns can be

raised and discussed outside formal Board

meetings. The Chair and the other Non-

Executive Directors regularly have informal

meetings with the Executive Directors and

other members of the senior leadership team

in the business, at a store location or at the

Group’s supportcentre.

cardfactory culture

The Board rely on various indicators to assess

the culture of cardfactory, including regular

presentations from the management team,

the results of colleague engagement surveys,

feedback from the colleague listening group

(CLG), which the Chair attends as designated

Director for workforce engagement, and also

ad hoc discussions with colleagues as part

of Director store and site visits. The Board

recognise the focus on continually enhancing

the supportive, inclusive and values-led

culture, including providing a platform

for colleague personal and professional

development.

Colleague engagement (and levels of

engagement) remain key performance

indicators of engagement, with a significant

focus over FY25 to further enhance the

opportunities for colleagues to participate

in, and support our ‘Giving Something Back’

value, based on feedback from our last

substantive colleaguesurvey.

Board Committees

The Board has three Committees:

• an Audit & Risk Committee;

• a Remuneration Committee; and

• a Nomination Committee.

If the need should arise, the Board may

set up additional Committees. Terms of

Reference (each of which comply with the

Code) for each of these Committees is

published on cardfactory’s investor website

(cardfactoryinvestors.com).

Audit & Risk Committee

The Audit & Risk Committee assists the Board

in discharging its responsibilities required by

DTR 7.1.3 R, including responsibility for:

• financial reporting;

• external and internal audits, including

reviewing and monitoring the integrity

of the Group’s annual and interim

financialstatements;

• reviewing and monitoring the extent

of the non-audit work undertaken by

external auditors;

• advising on the appointment of

externalauditors;

• overseeing the Group’s relationship with

its external auditors;

• reviewing the effectiveness of the external

audit process;

• reviewing the effectiveness of the Group’s

internal controls and systems; and

• whistleblowing.

The ultimate responsibility for reviewing and

approving the Annual Report & Accounts and

the half-year results remains with the Board.

The Audit & Risk Committee will give due

consideration to laws and regulations, the

provisions of the Code and the requirements

of the Listing Rules. The Code recommends

that an audit committee should comprise at

least three members who are independent

non-executive directors and that at least one

member should have recent and relevant

financial experience. The Audit & Risk

Committee was chaired by Rob McWilliam,

who the Non-Executive Directors consider

has recent and relevant financial experience.

The Audit & Risk Committee’s other members

during the period were Roger Whiteside (until

20 June 2024), Indira Thambiah and Pam

Powell (from 21 June 2024). The Directors,

therefore, consider that the Company is in

compliance with the Code.

The Audit & Risk Committee met four times

during the year and, in future, will meet no

fewer than three times per year.

This Committee has access to sufficient

resources to carry out its duties, including

the services of the Group General Counsel &

Company Secretary and the Group’s Head of

Internal Audit & Loss Prevention. Independent

external legal and professional advice can also

be taken by the Audit & Risk Committee if it

believes it is necessary to do so.

The Audit & Risk Committee Chair usually

attends the Annual General Meetings of

the Company and is available to respond to

questions from shareholders on the activities

of the Audit & Risk Committee during the

year, a report on which is set out on pages

87 to 90 of the Governance section of this

AnnualReport.

Remuneration Committee

The Remuneration Committee assists the

Board in determining its responsibilities in

relation to remuneration, including:

• making recommendations to the Board

on the Company’s policy on executive

remuneration;

• setting the over-arching principles,

parameters and governance framework

of the Group’s remuneration policy and

ensuring incentives and rewards are

aligned with the Group’s culture;

• determining the individual remuneration

and benefits package of each of the

Company’s Executive Directors, its Company

Secretary and other members of the

Group’s senior leadership team; and

• ensuring appropriate engagement with

shareholders and the workforce takes place

on executive remuneration policy and its

alignment with wider Company pay policy.

The Remuneration Committee also ensures

compliance with the Code in relation

to remuneration and is responsible for

preparing an annual Remuneration Report

for approval by the Company’s members

at its AGM. The Remuneration Committee

undertook a triennial review of the Company’s

Remuneration Policy, which was approved

by shareholders at the 2024 AGM. The

Remuneration Committee recently reviewed

the appropriateness of this policy and do not

propose any changes to this Policy.

The Code provides that a remuneration

committee should comprise at least three

members who are independent non-executive

directors, free from any relationship or

circumstance which may, or would be likely

to, or appear to, affect their judgement

and that the chair of the board of directors

may also be a member provided he is

considered independent on appointment.

TheRemuneration Committee during the

period was chaired by Indira Thambiah.

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Card Factory plc Annual Report and Accounts 2025

The Committee’s other members during the

period were Paul Moody, Roger Whiteside

(until 20 June 2024), Pam Powell (from 21June

2024) and Rob McWilliam. The Directors,

therefore, consider that the Company is in

compliance with the Code.

The Remuneration Committee met five times

during the year. In future, it will meet not less

than twice a year.

The Board and the Remuneration Committee

have engaged Deloitte LLP, the professional

services firm, to advise and assist in

connection with the Group’s executive

remuneration arrangements and its reporting

obligations. Deloitte LLP provide a number of

other consultancy services to the cardfactory

Group, including Debt Advisory.

A report on the Remuneration Committee’s

activities during the year, together with the

Directors’ Remuneration Report is set out

onpages 91 to 114 of the Governance section

of this Annual Report.

Nomination Committee

The Nomination Committee assists the Board

in discharging its responsibilities relating to

the composition and make-up of the Board

and any Committees of the Board. It is also

responsible for periodically reviewing the

Board’s structure and identifying potential

candidates to be appointed as Directors or

Committee members as the need may arise.

The Nomination Committee is responsible for

evaluating the balance of skills, knowledge

and experience, and the size, structure and

composition of the Board and Committees

of the Board, retirements and appointments

of additional and replacement Directors

and Committee members, and will make

appropriate recommendations to the Board

on such matters.

The Code recommends that a majority of the

members of a nomination committee should

be independent non-executive directors.

TheNomination Committee is chaired by

Paul Moody and its other members during

the year were, Roger Whiteside (until 20

June 2024), Pam Powell (from 21 June 2024),

RobMcWilliam and Indira Thambiah. The

Directors, therefore, consider that the

Company is in compliance with the Code.

The Company adopts a rigorous process

when recruiting Executive Directors and

members of the senior management team,

which includes multiple interviews with the

Board and peers; psychometric test and

interviews with an occupational psychologist,

with a focus on making appointments where

emotional intelligence, leadership and cultural

fit are key requirements in addition to role-

specific skills and experience.

The Nomination Committee met four times

during the year. In future, the Committee will

meet not less than once a year. A report on the

activities of the Nomination Committee during

the year is set out on pages 115 and 116 of the

Governance section of this Annual Report.

Board evaluation

An externally conducted Board effectiveness

evaluation was performed during 2024, by

Toby Lapage-Norris of Trusted Advisory

Partnership Limited (TAP). TAP was selected

by the Chair and the General Counsel &

Company Secretary, following an informal

review of a number of potential advisers.

On this occasion, TAP was selected, with

recognition of process efficiency arising from

the previous engagement with cardfactory,

asthey had undertaken an external

assessment of the Board in 2021. It was

noted that TAP had also undertaken a board

evaluation for 4imprint Group plc (acompany

chaired by Paul Moody) in 2022; the Board

was satisfied that TAP would provide an

objective and independent assessment as

part of this review.

TAP reviewed the Board and its Committees’

effectiveness, including composition,

capability and performance, together with

assessment of the quality of discussion and

the Board dynamics and composition. The

performance of individual Directors was

not assessed. TAP complies with the Board

Reviewers’ Code of Practice. TAP conducted

initial surveys, followed by individual

interviews with each Board member and

other regular meetingattendees.

In addition, separate internally conducted

effectiveness assessments, comprising

questionnaires and scoring (as employed

in prior years) was adopted for each of the

Remuneration Committee and the Audit &

Risk Committee. The Board then considered

the conclusions and recommendations from

the review with TAP and applied the findings

in setting new Board objectives for the

subsequent 12-month period.

The Board effectiveness review identified the

following strengths:

• The Board appropriately balances robust

strategic discussion with scrutiny in an

environment that is wholly transparent,

courteous, and respectful. It positively

remains ambitious for itself to continue

to improve its effectiveness in fulfilling its

duties, responsibilities, and obligations, but

also to do so in a way that has meaningful

impact on the business and its ambitions

to deliver sustainable performance.

• Since the 2021 external review, the CEO

has matured quickly and well into his role,

delivered against the strategic priorities

identified, upskilled his leadership teams’

capabilities, and engendered genuine

trust and confidence with the Board.

• The Board has been significantly refreshed

with complementary skills and experience

that are aligned with the growth priorities

of the business strategy. It is a good and

harmonious Board that has fostered

deep relationships and trust with the

Executive Directors and management and

increasingly has generated deep interest

and support from external stakeholders.

The Board set the following collective

objectives in October 2024, which are to be

progressed during the subsequent 12-month

period, which are subject to regular reviews:

• FY30 Strategic Plan: Constructive scrutiny

and challenge to support development

of the FY30 Strategic Plan to focus on

long-term growth of the cardfactory

business, including:

– a detailed review of the organisation

with the view of adopting a simplified

and more efficient model; and

– year-on year growth of the UK &

Ireland store revenues and profitability,

substantially recovering inflationary

cost through efficiency and price.

• Growth Channel Strategies: Support the

management team to develop specific

strategies and plans to FY30, including:

– evaluate the available options for driving

profitability for the online business to

support a full omnichannel offer; and

– accelerate the actions necessary

to achieve critical mass for the

retail partnership business in select

international markets, including the US.

• Succession Planning: Develop and

commence implementation of a clear

succession plan for the CEO and senior team.

CORPORATE GOVERNANCE REPORT CONTINUED

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Company Information

In addition to the Board effectiveness review,

the Board reflected on the achievement of

the objectives adopted in October 2023. It

was agreed that good progress was made in

meeting these objectives, including increased

engagement and support from the Board

members in supporting senior leadership

on strategic priorities, recognition of the

clarity afforded following publication of the

Capital Allocation Policy in April 2024, and

improvements in Board composition and

diversity (see page 116).

TAP have reviewed this summary of the Board

evaluation and have approved the contents.

Board evaluation will continue to be conducted

on an annual basis with an internally

conducted evaluation scheduled to be

conducted during 2025.

Conflicts of interest

The Companies Act 2006 allows the board of

a public company to authorise conflicts and

potential conflicts of interest of individual

directors where the articles of association of

the company contain an enabling provision.

The Company’s Articles of Association give

the Board this authority subject to the

followingsafeguards:

• Directors who have an interest in matters

under discussion at a Board meeting

must declare that interest and abstain

fromvoting.

• Only Directors who have no interest in

the matter being considered are able

to authorise a conflict of interest and,

intaking that decision, the Directors must

act in a way they consider, in good faith,

would be most likely to promote the

success of the Company.

The Directors are able to impose limits or

conditions when giving authorisation if they

feel this is appropriate. All Directors are

required to disclose any actual or potential

conflicts to the Board and there are no

current matters disclosed that are considered

by the Board to give rise to a conflict

ofinterest.

All conflicts are considered by the Board and

any authorisations given are recorded in

the Board’s minutes and reviewed annually

by the Board. The Board considers that

its procedures to authorise conflicts of

interest and potential conflicts of interest are

operating effectively.

Appointment and removal

ofDirectors

All Directors have service agreements or

letters of appointment in place and the details

of their terms are set out in the Directors’

Remuneration Report on pages 99 and 100.

The Articles of Association of the Company

provide that a Director may be appointed

by ordinary resolution of the Company’s

shareholders in general meeting or by the

Board so long as the Director stands down

and offers themself for election at the next

AGM of the Company. Consistent with the

Code, the Articles also provide that each

Director must stand down and offer themself

for re-election by shareholders at the AGM

every year.

Directors may be removed by a special

resolution of shareholders or by an ordinary

resolution of which special notice has been

given in accordance with the Companies

Act 2006. The Articles of Association of the

Company also provide that the office of

a Director shall be vacated if he or she is

prohibited by law from being a Director or

is bankrupt; and that the Board may resolve

that his or her office be vacated if he or she

is of unsound mind or is absent from Board

meetings without consent for six months or

more. A Director may also resign from the

Board. The Nomination Committee makes

recommendations to the Board on the

appointment and removal of Directors.

Powers of Directors

The business of the Company is managed

by the Board, which may exercise all of

the powers of the Company, subject to the

requirements of the Companies Act 2006, the

Articles of Association of the Company and

any special resolution of the Company.

The Board has adopted internal delegations of

authority in accordance with the Code which

incorporate matters which are reserved to

the Board or Committees and the powers and

duties of the Chair and the Chief Executive

Officer, respectively.

At the AGM of the Company, the Board will

seek authority to issue shares and to buy-back

and reissue shares. Any shares bought back

would either be held in treasury, cancelled or

sold in accordance with the provisions of the

Companies Act 2006. For further details see

the Notice of Annual General Meeting which

accompanies this Annual Report.

Advice, indemnities and insurance

All Directors have access to the advice and

services of the General Counsel & Company

Secretary. In addition, Directors may seek

legal advice at the Group’s cost if they consider

it necessary in connection with their duties.

Each Director of the Company (and of each

other Group company) has (and had, during

the financial year to 31 January 2025) the

benefit of a qualifying third-party indemnity

provision, as defined by section 236 of the

Companies Act 2006, as permitted by the

Company’s Articles of Association. Directors

and officers of the companies incorporated

in the US also benefit from an equivalent of a

qualifying third party indemnity. In addition,

Directors and officers of the Company and

its subsidiaries are covered by Directors’

and Officers’ liability insurance. No amount

was paid under any of these indemnities or

insurances during the year other than the

applicable insurance premiums.

Articles of Association

The Company’s Articles of Association can

only be amended by a special resolution

of its shareholders in a general meeting,

inaccordance with the Companies Act 2006.

Governance and risk

The Board has adopted the risk management

framework described on pages 69 and 70 of

this Annual Report.

The Board and the Audit & Risk Committee

have reviewed the effectiveness of the

Group’s risk management framework, the

Group’s risk register and their alignment with

the Group’s strategic objectives in accordance

with the Code for the period ended 31 January

2025 and up to the date of approving the

Annual Report and Accounts.

The Board as a whole considered the principal

risks and relevant mitigating actions and

determined that they were acceptable for a

retail business of the size and complexity as

that operated by the Group.

Internal control and audit

Overall responsibility for the system

of internal control and reviewing its

effectiveness lies with the Board. In its

day-to-day operations, the Group adopts

the three lines of defence methodology and

continuously assesses the performance of

its internal controls and, where necessary,

looks to enhance its control environments.

The Head of Internal Audit & Loss Prevention

coordinates the Group’s programme of

internal audit activity, supported by two

independent accounting firms.

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Card Factory plc Annual Report and Accounts 2025

The Group’s system of internal control can be summarised as follows:

Board Audit & Risk Committee Senior Leadership Team

• Takes collective responsibility

forinternal control.

• Reserves certain matters for

theBoard.

• Oversees the control framework

and responsibility for it.

• Approves key policies and

procedures.

• Monitors development

ofperformance.

• Oversees effectiveness

of internal control

framework.

• Receives reports from the

external auditor.

• Approves the annual

internal audit programme.

• Receives internal audit

reports.

• Receives risk management

reports.

• Receives whistleblowing

updates.

• Responsible for

operating within the

control framework.

• Approves policies and

procedures.

• Monitors compliance

with policies and

procedures.

• Recommends

changes to controls

where needed.

• Monitors

performance.

Internal Audit Compliance and safety risk assessors Loss Prevention Team

• Provides independent, objective

assurance to the Board, Audit

& Risk Committee and senior

leadership team on the adequacy,

efficiency and effectiveness of

internal controls.

• Reviews compliance with

internal procedures to

ensure that good health

and safety standards

areobserved.

• Focuses on cash and

stock losses, theft

and fraud in stores.

Specific elements of the current internal

control framework include:

• a list of matters specifically reserved for

Board approval;

• a clear framework for delegated

responsibilities, mandating escalation of

decisions to more senior colleagues within

the business, or ultimately the Board,

where appropriate;

• clear structures and accountabilities

for colleagues, well understood policies

and procedures, all of which the senior

leadership team are closely involved with;

• every member of the senior leadership

team having clear responsibilities and

operating within defined policies and

procedures covering such areas as capital

expenditure, treasury operations, financial

targets, human resources management,

customer service and health and safety;

• the Executive Directors and the senior

leadership team monitoring compliance

with these policies and procedures and, in

addition, regularly reviewing performance

against budget, analysis of variances,

major business issues, key performance

indicators and the accuracy of business

forecasting; and

• a continuous review programme of store

compliance by the loss prevention team

in relation to financial procedures in

stores, and by risk assessors working in

the health and safety team and by other

teams within the Group.

The Audit & Risk Committee has responsibility

for overseeing the Group’s system of internal

controls and the programme of activities

performed by internal audit and receives the

report of the external auditor as part of the

annual statutory audit. Additional information

on the activities of the Audit & Risk Committee

can be seen in the report of the Audit & Risk

Committee on page 88.

The Board and the Audit & Risk Committee

have monitored and reviewed the

effectiveness of the Group’s internal control

systems in accordance with the Code for

the period ended 31 January 2025 and up

to the date of approving the Annual Report

& Accounts and confirmed that they are

satisfactory. Internal control systems such

as this are designed to manage rather

than eliminate the risk of failure to achieve

business objectives and can provide only

reasonable and not absolute assurance

against material accounting misstatement

or loss. Where any significant failures or

weaknesses are identified from the systems

of internal control, action is taken to

remedythese.

Disclosures under DTR 7.2.6 R

The disclosures the Company is required to

make pursuant to DTR 7.2.6 R are contained

in the Directors’ Report on pages 117 to 121.

Anti-bribery

The Group has implemented internal

procedures, colleague training and measures

(including the provision of an Anti-Corruption

and Bribery Policy) with the aim of ensuring

compliance with the UK Bribery Act 2010

(as amended) by the Company and other

members of the Group.

Whistleblowing

The Group is committed to conducting its

business with honesty and integrity, with high

standards of corporate governance and in

compliance with legislation and appropriate

codes of practice. We expect all colleagues to

maintain such high standards but recognise

that all organisations face the risk of things

going wrong from time to time or of unknowingly

harbouring illegal or unethical conduct.

We recognise that a culture of openness

and accountability is essential in order to

prevent such situations occurring or to

address them when they do occur. We

provide a whistleblowing line and maintain

a whistleblowing policy that is designed

to encourage colleagues to report such

situations without fear of repercussions or

recriminations provided that they are acting

in good faith. By having early knowledge

of any wrongdoing or illegal or unethical

behaviour, we improve our ability to intervene

and stop it. The policy sets out how any

concerns can be raised and the response

that can be expected from the Company

and provides colleagues with the assurance

that they can do this in complete confidence.

Our loss prevention team, in its day-to-day

activities, seeks to reinforce this message

and, in addition, the Group periodically uses

communication campaigns to supplement

this. The Audit & Risk Committee is notified

ofany whistleblowing reports.

This report was reviewed and approved

bytheBoard on 6 May 2025.

Paul Moody

Chair

7 May 2025

CORPORATE GOVERNANCE REPORT CONTINUED

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AUDIT & RISK COMMITTEE

CHAIR’S LETTER

Rob McWilliam

Chair of the Audit & Risk Committee

Committee members

Rob McWilliam (Chair)

Pam Powell

Indira Thambiah

We have focused our attention on risk management,

the oversight of financial reporting, and internal

control matters this year.”

Dear Shareholder

I am pleased to present this year’s Audit & Risk

Committee (Committee) Report. The Report

outlines how the Committee discharged its

responsibilities over the past year and the

key areas it considered in doing so.

The Committee, on behalf of the Board, plays an

important governance role providing valuable

independent challenge and oversight in ensuring

the integrity of financial reporting, the internal

control environment and risk management

processes. Additionally, we challenge the senior

leadership team and the internal and external

auditors on a number of areas, including key

accounting judgements and control matters.

The Committee has an annual agenda aligned

to its Terms of Reference and it provides

flexibility to include additional topics of

particular importance to allow the Committee

to respond to any emerging issues. The

Committee’s Terms of Reference are available

on the Company’s website.

The composition of the Committee has changed

during the year with Pam Powell joining the

Committee on 21 June 2024 and Roger Whiteside

retired as a Non-Executive Director and member

of the Audit & Risk Committee on 20 June 2024.

I would like to express my thanks to Roger

for his contribution to our discussions and

welcomePam.

The Committee monitors engagements

with external stakeholders relevant to the

Committee’s areas of oversight, including the

Financial Reporting Council (FRC). During the

year, the FRC’s Corporate Reporting Review

(CRR) team carried out a limited scope review

of the Company’s Annual Report and Accounts

for the year ended 31 January 2024 in

accordance with Part 2 of the FRC Corporate

Reporting Review operating procedures.

The areas covered by their review related

to certain reporting issues of particular

relevance to retail companies. The Committee

received the FRC’s response in October 2024

stating that there “were no questions or

queries that they wished to raise”.

The Committee also note that the FY24

external audit file of Forvis Mazars was

subject to FRC AQR review and had a

positive outcome.

In the year, the Committee has focused on

its fundamental priorities, including matters

aligned with the Group’s principal risks, the

Group’s systems of internal control, the quality

and effectiveness of the external and internal

audit processes and it has implemented the

FRC’s Audit Committee Minimum Standard.

The Committee has reviewed management’s

readiness plans for the UK Corporate

Governance Code, Provision 29, i.e.

monitoring and reporting against the Group’s

risk management and internal controls

frameworks and ensuring the effectiveness of

financial, operational and compliance-related

controls to ensure that we are in a position

to comply with this provision commencing

1February 2026.

Over the course of the next 12 months,

theCommittee will continue to focus on

risk management, the oversight of financial

reporting, delivery of the annual internal audit

plan and the adoption of Provision 29. In

addition, it will also continue to ensure that its

activities are focused on business issues that

add to, or preserve, value and that it remains

aligned with the strategic goals of the Group.

I would also like to thank my Committee

colleagues and all the members of

management who attend, report to and

support the Audit & Risk Committee, for their

energy and focus in enabling us to discharge

our responsibilities effectively.

The report that follows provides further detail

on the Audit & Risk Committee’s activities

during the year.

I look forward to addressing any questions

in respect of the work of the Audit & Risk

Committee in advance of the AGM on

19 June 2025.

Yours sincerely

Rob McWilliam

Chair of the Audit & Risk Committee

7 May 2025

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Card Factory plc Annual Report and Accounts 2025

This report provides details of the role of the

Audit & Risk Committee and the work it has

undertaken during the year.

Role of the Audit & Risk Committee

The principal responsibilities of the Audit &

Risk Committee, which has received delegated

authority from the Board, are to:

• oversee the integrity of the Group’s Financial

Statements and public announcements

relating to financial performance;

• oversee the Group’s external audit

process including its scope, the extent of

the non-audit services provided by our

auditor and our auditor’s independence

and effectiveness;

• monitor the effectiveness of financial

controls;

• evaluate the process for identifying and

managing risk throughout the Group;

• ensure the effectiveness and independence

of the Group’s internal audit function; and

• ensure that the Annual Report & Accounts

are fair, balanced and understandable.

A more detailed explanation of the Audit &

Risk Committee’s role, its meeting frequency,

attendance and membership (both during the

period and as at the date of this report) are

set out in the Corporate Governance Report

on pages 80 to 86.

The Chief Executive, the Chief Financial

Officer, the Chair of the Board, the Head of

Internal Audit & Loss Prevention and the

Director of Corporate Finance usually attend

meetings of the Audit & Risk Committee by

invitation, along with representatives from our

auditor, Forvis Mazars LLP. In addition, subject

matter experts and professional services firms

engaged to support internal audit, are also

invited to attend meetings of the Audit & Risk

Committee where required.

The General Counsel & Company Secretary acts

as secretary to the Audit & Risk Committee.

Activities during the year

During the year, the work of the Audit & Risk

Committee has principally fallen under the

following areas:

• Reviewing the integrity of the draft

Financial Statements for the year ending

January 2024, the appropriateness of

accounting policies with a particular focus

on stock provisions, going concern and

viability statements and the auditor’s

report regarding its findings on the annual

results.

• Assessing whether the Annual Report

& Accounts for the year ending January

2024, taken as a whole, were fair, balanced

and understandable and provided the

information necessary for shareholders

toassess the Company’s strategy, business

model and performance.

• Reviewing the systems and controls

that the Group has in place to enable

the Board to make proper judgements

on a continuing basis as to the financial

position and prospects of the Group.

• Verifying the independence of the Group’s

auditor, approving their audit plan

and audit fee and setting performance

expectations.

• Approval of the Group’s half-year results

statements published in September 2024.

• Overseeing the Group’s approach to risk

management, ensuring that the principal

risks are regularly reviewed by the senior

leadership team.

• Reviewing the Group’s risk register in April,

June, September 2024 and January 2025.

• Monitoring developments in legislation,

reporting and practice, which affect

matters for which the Audit & Risk

Committee is responsible.

• Approval of the annual internal audit

plan, reviewing the findings of, and the

implementation of actions arising from

internal audit reviews undertaken.

• Reviewing the Company’s procedures for

detecting fraud and systems and controls

for the prevention of bribery.

• Reviewing the outcome and actions taken

relating to whistleblowing cases.

• Reviewing the Group’s tax strategy.

• Assessing its own performance against its

Terms of Reference.

Activities after the year-end

In the period following the year-end, the

Audit & Risk Committee met in April 2025 and

reviewed the following:

• The Group’s risk register including an

assessment of how risks are assessed,

how risk appetite and target risk are

assigned, and a review of the emerging

risks identified by the senior leadership

team, as supplemented by the Audit &

Risk Committee.

• The principal risks facing the Group

including those that would threaten its

business model, future performance,

solvency or liquidity.

• The process undertaken by management

to support the Group’s going concern

statement which is set out on page 119

including the time period assessed and

the principal risks and combinations of

risks modelled.

• The integrity of the draft Financial

Statements for the year ended January 2025,

including the appropriateness of accounting

policies and going concern assumptions.

• The external auditor’s report.

• Whether this Annual Report & Accounts,

taken as a whole, are fair, balanced

and understandable and provide the

information necessary for shareholders

to assess the Company’s position and

performance, business model and strategy.

• The performance, effectiveness,

independence and qualifications of the

external auditor.

Significant areas of estimation

and judgement

Within its Terms of Reference, the Committee

monitors the integrity of the Group’s annual

and half-year results, including a review of

the significant financial reporting matters,

judgements and estimates contained in them.

At its meeting in April 2025, the Committee

reviewed the FY25 financial year and

considered a paper prepared by management

regarding the significant accounting policies,

disclosures, estimates and judgements

affecting the Financial Statements for the year.

The Committee also reviewed the report

of the external auditor, which included

comments on the matters prepared and

presented by management, plus other

matters insofar as relevant to the audit

opinion. The significant accounting issues

discussed in respect of FY25 were:

• Inventory counts, valuation and provisioning.

• Impairment reviews (including goodwill).

• Alternative performance measures.

• Identification and valuation of acquired

intangibles assets.

Inventory

The Group has significant volumes and a broad

range of inventory. The Group makes use of

technology, such as hand-held terminal devices,

to support stock control processes and reduce

the risk of manual error in stock counts, which

are a key control in respect of the inventory

balance. An inventory count is undertaken either

at the end of a season (for example, any residual

Christmas stock is counted during January) or

at the half-year and the year end for ‘Everyday’

product lines, which covers a significant majority

of the value of stock on hand at each date. The

Committee reviewed the process by which the

year-end inventory valuation had been prepared

and challenged management to ensure key risk

areas had been given due consideration.

AUDIT & RISK COMMITTEE REPORT

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The Group continues to hold material

inventory provisions which, by their nature,

involve a significant degree of estimation;

however, as a result of continuous

improvement in sell-through rates and

a reduction in the overall destruction of

inventory observed, provision values have

reduced compared to the prior year.

The Group applied a consistent policy with

the prior year and updated the categorisation

and provision rate applied to inventory

based on the latest available sell-through

data. Lines that are not on plan for future

sales, going off plan in the immediate period

after the year-end or where the Group holds

large volumes of inventory compared to

recent sales data are provided against, with

the rate of provision based on actual recent

sell-through rates for inventory with similar

characteristics. The nature of this estimation

is such that the range of reasonably possible

outcomes is potentially material and, as a

result, inventory provisioning is considered a

source of significant estimation uncertainty

for the Financial Statements.

As part of its review, the Committee

considered the calculation of the provision

and challenged management’s assumptions.

As part of the review, it was noted that sell-

through rates in FY25 had been better than

in the prior year and better than expected

when the FY24 accounts were approved.

Accordingly, management’s assessment of

the provisioning percentages to apply to each

provision category were reduced compared to

the prior year.

Having considered these matters, and the

views of the external auditor, the Committee

concluded that the inventory valuation,

provision and associated disclosures

included in the Financial Statements were

materiallyappropriate.

Impairment reviews

Impairment reviews are an area of

management and audit focus; however,

the Group’s assessment of whether or

not impairment is considered a source of

significant estimation uncertainty depends

upon the results of the reviews and the level

of headroom and associated sensitivity to

changes in key assumptions. Accordingly,

noting the material value of goodwill on the

balance sheet and the performance of certain

of the Group’s cash-generating units (CGUs).

The reviews concluded that no impairment

charges were required in respect of the

CFOnline or Garven CGUs. The Group recorded

a net £0.4 million impairment reversal in

respect of individual store assets, which is

comprised of £1.8 million of impairment

charges and £2.2 million of impairment

charge reversals. The individual store assets

comprise the group of CGUs that make up

the cardfactory stores business, to which the

Group’s goodwill balance is allocated.

The Committee considered the key

assumptions used in preparing the

impairment reviews and the sensitivity of the

results to changes in those assumptions. The

Committee also considered the recoverability

of the Parent Company investments as part of

their review. Having challenged management

regarding the application of those

assumptions, and considered the views of the

auditor, the Committee concluded that the

reviews had been prepared on a reasonable

and appropriate basis. Having considered the

level of headroom and the relative sensitivity

to key assumptions, the Committee concurred

with management’s view that reasonably

possible changes in the key assumptions

would not result in an impairment charge

where one had not been recorded, nor

materially change the impairment charges

that had been recorded.

Accordingly, the Committee considered that

the disclosure of the estimation uncertainty as

not significant was appropriate and balanced

the inherent complexity and due focus of the

reviews against the lack of sensitivity of the

estimates to changes.

Identification and valuation

ofacquired intangible assets

As a result of the acquisition of Garven

Holdings, LLC on 3 December 2024, the

Group have recognised both goodwill and

intangible assets associated with existing

customer relationships and brands used by

the acquired business. Management have

performed a valuation of the intangible assets

to determine their fair value.

The valuation method used relied on several

assumptions which are inherently subject to

a degree of estimation uncertainty, including

estimation of future cash flows of the

acquired business, royalty rates and discount

factors. The key assumptions underpinning

the valuation include the growth rate of sales,

thediscount rate applied and the retention

rate of existing customer relationships.

The Committee considered the method and

associated key assumptions used in valuing

the acquired intangibles and the sensitivity

of the intangible asset valuation in respect of

the key assumptions applied. The Committee

also considered the judgement in determining

the nature of intangible assets to be valued.

Having considered the valuation method, key

assumptions and the relative sensitivity of

key assumptions made by management, the

Committee concluded that the final valuation

represented a fair and balanced assessment

of the acquired intangible assets.

Having considered the sensitivity of

the valuations to the key assumptions,

the Committee noted that the range of

reasonable outcomes for the valuations

was not material.

Accordingly, the Committee considered that

the disclosure of the estimation uncertainty as

not significant was appropriate.

Alternative performance

measures

The Committee reviewed the use of

alternative performance measures (APMs) in

the Annual Report & Accounts. In particular, it

was noted that the number of adjusting items

in arriving at Adjusted income statement

metrics had increased compared to prior

periods, and that references to Free Cash

Flow and Adjusted Operating Cash Flow had

been included for the first time.

As part of its assessment, the Committee

reviewed the appendix (see pages 169 to 172)

and noted that all APMs had been described,

explained and reconciled to IFRS measures.

In particular, it was noted that Management’s

approach to APMs was consistent with the

way the business communicates with the

market and that changes compared to the

prior year were informed by changes made to

the Group’s capital allocation policy last year,

and ensuring users of the financial statements

can understand the core trading performance

of the business, cash generation and how that

converts to distributions and available free

cash under that policy.

The Committee reviewed the nature of the

adjusting items and, having made inquiries of

management and taken into consideration the

views of the external auditor, concluded they

were appropriate for this purpose. Having

reviewed the use of APMs in the report, in

particular in the KPIs on page 1 and in the CFO

report on page 69, the Committee concluded

that the use of APMs was fair and balanced.

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Card Factory plc Annual Report and Accounts 2025

Assessment of the Annual Report

& Accounts

The Committee confirmed to the Board

that it considered this Annual Report &

Accounts as a whole, to be fair, balanced and

understandable, to the extent possible, while

complying with all applicable legal, regulatory

and reporting requirements.

Internal Audit

The Head of Internal Audit & Loss Prevention

is responsible for devising and coordinating

the agreed programme of internal audit

reviews and is supported by two independent

accounting firms in the delivery of the

annualplan.

Internal audit reports are shared with Forvis

Mazars LLP, who are also invited to attend the

Audit & Risk Committee’s meetings, ensuring

the external auditors have full disclosure

to allow them to account for internal audit

findings in their audit scope.

In line with good practice, the Audit & Risk

Committee, supported by the Head of Internal

Audit & Loss Prevention, will continue to

assess its approach to internal audit to ensure

it supports a rigorous control framework

across the Group.

Loss Prevention

The Loss Prevention team and its programme

of activities are embedded in the business.

Direct engagement and regular communication

with colleagues across the business remain

critical to the team’s effectiveness and the

team’s core fraud and theft detection activities

are supplemented by a programme of data

reviews, store audits, KPI monitoring, colleague

education, training and development.

External auditor

Forvis Mazars LLP (formerly Mazars) have

conducted the statutory audit for the financial

year ended 31 January 2025 and have

attended all scheduled Committee meetings

held during that financial year, as well as the

Committee meeting held during April 2025.

The Committee had the opportunity to meet

privately with the auditors during the period.

The Audit & Risk Committee discussed and

agreed the scope of the audit with Forvis

Mazars in January 2025 and have since

agreed their audit fees. The Committee

reviewed the audit quality and the

effectiveness of the external audit in line with

the Financial Reporting Council’s ‘Practice

aid for audit committees (December 2019)’.

It considered the results of external quality

inspections by the Audit Quality Inspection

Team on other Mazars clients, as well as

the FY24 Cardfactory audit and received

representations from management as to how

the audit was conducted, to allow it to make

its own assessment of the effectiveness of

the audit process with particular reference to

audit planning, design and execution of

the audit.

The Committee also considered the

effectiveness of the audit through the

reporting from and communications with

the auditor and an assessment of the

auditors approach to key areas of judgement

and any errors identified during the audit.

The Committee concluded that the audit

waseffective.

The fee paid to Forvis Mazars LLP for the

statutory audit of the Group and Company

financial statements and the audit of

the Company’s subsidiaries pursuant to

legislation was £701k. A breakdown of fees

paid to Mazars LLP during the financial year is

set out in note 3 to the Financial Statements

on page 144.

The Committee received representations from

Forvis Mazars LLP during the year with regard

to its independence from the Company.

Having considered these representations and

that Mazars are only engaged to perform the

audit and there are no conflicts of interest

effective in auditing the Group, the Committee

considers that Forvis Mazars LLP is sufficiently

independent.

The Committee has taken appropriate

steps to ensure that Forvis Mazars LLP

is independent of the Company and has

obtained written confirmation that it complies

with guidelines on independence issued by

the relevant accountancy and auditing bodies.

The Group has no contractual arrangements

that restrict its choice of auditor.

Use of auditors for non-audit work

The Committee recognises that the use

of audit firms for non-audit services can

potentially give rise to conflicts of interest.

During the prior year the Committee reviewed

and approved an updated policy regarding the

use of audit firms for non-audit services, which

is published on the Group’s investor website

(cardfactoryinvestors.com). In addition to

being responsible for oversight of the Group’s

auditor on behalf of the Board, the Committee

also monitors the implementation of the

non-audit services policy.

The updated policy contained no material

changes to the substance of the policy; which

sets out the Group’s general principle that

non-audit work shall not be allocated to the

external auditor unless a number of stringent

criteria are met, such criteria being designed

to ensure any non-audit or audit-related work

awarded to the external auditor should not

compromise independence.

During FY25, Forvis Mazars LLP did not

provide any non-audit services to the Group,

other than its review of the half-year interim

report and Financial Statements, which is

considered closely related to the audit. Such

a review is pre-approved by the Group’s

non-audit services policy.

The aggregate fees paid to Forvis Mazars LLP

for services closely related to the audit was

£92k, equivalent to 11.6% of the audit fee.

Further details are given in note 3 to the

Financial Statements on page 144.

The Committee is satisfied that the overall

levels of audit-related and non-audit fees and

the nature of the services provided are such

that they will not compromise the objectivity

and independence of the auditor.

This report was reviewed and approved by the

Audit & Risk Committee on 6 May 2025.

Rob McWilliam

Chair of the Audit & Risk Committee

7 May 2025

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REMUNERATION COMMITTEE

CHAIR’S LETTER

Indira Thambiah

Chair of the Remuneration Committee

Committee members

Indira Thambiah (Chair)

Paul Moody

Pam Powell

Rob McWilliam

The Committee also considered the significant

Total Shareholder Return, exceeding 60%,

(compared to FTSE indexes, which reported

up to 6% returns).”

Dear Shareholder

I welcome the opportunity to present the Remuneration Report for the financial year

to31 January 2025.

Introduction

This Directors’ Remuneration Report is divided

into three sections: (1) this Letter outlining key

decisions (pages 91 to 93); (2) the Directors’

Remuneration Policy, which was adopted in

2024 (pages 94 to 101); and (3) the Annual

Report on Remuneration for the year to

31January 2025 (pages 102 to 114).

This letter and the Annual Report on

Remuneration will be put to an advisory

shareholder vote at the Annual General

Meeting to be held on 19 June 2025.

Remuneration Policy

The current Remuneration Policy (on pages

94 to 101) was adopted following approval

by96% of shareholder votes at the June

2024 Annual General Meeting, following a

triennial review and shareholder consultation.

TheRemuneration Committee considers

that this policy continues to meet the

requirements of the Company to support

the strategic objectives and operates as

intended, with no changes proposed. The next

review of the Policy is expected to be put to

shareholders at the 2027 AGM.

Application of the Remuneration

Policy during FY25

The Committee considers the Remuneration

Policy to be effective and that it operated

as intended during FY25, which ensured

theExecutive Directors and leadership team

continued to focus on further growth of

thebusiness, taking account of the strategic

plan. Financial performance was in line

withexpectations; while there has been some

progress in key strategic areas for growth,

thishas been behind expectations.

The annual bonus award for the Executive

Directors will pay out at 37.7% of the

maximum potential award. Adjusted PBT was

£66.0 million, marginally below the Target PBT

of £66.5 million, resulting in 30.9% of the 70%

maximum potential bonus being awarded

for this element. The Committee reviewed

the adjustments that has been made to

calculate the adjusted PBT and confirmed it

was satisfied that these were appropriate for

the purpose of bonus assessment and that

the outcome fairly reflected the underlying

performance. Details of the adjustments are

set out on page 170.

In respect of the strategic objectives,

theactual performance was as follows:

1. Cardfactory.co.uk sales amounted to

£8.8 million, which is slightly below the

target sales of £8.9 million, whichresulted

in an award of 6.8% of the potential 15%

of maximum bonus award; and

2. Partnership sales (excluding international

subsidiaries) amounted to £6.2million,

which failed to achieve the Threshold

sales of £8.0 million, consequently no

bonus award has accrued in respect

of this component, which could have

contributed up to 15% of the maximum

bonus award.

The bonus is also subject to an ESG underpin.

The Committee considered that sufficient

progress has been made during FY25 on

delivery of the ESG strategy that was published

in the FY24 Annual Report (see also pages 36

to 43) and, therefore, determined that the

underpin had been met, and no reduction

to the bonus award should be made in

thisrespect.

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Card Factory plc Annual Report and Accounts 2025

The Committee then considered the overall

performance of the business and the

stakeholder experience during the year.

Notwithstanding that performance under the

strategic elements was below expectations,

the Committee considered that as the

achievement of PBT was at broadly on-target

levels, delivered through over performance

in the core sales channel, the overall annual

bonus outcome was fair and reasonable in the

round. Therefore, no discretion was exercised

to adjust the formulaic outcome.

Restricted Share awards granted in May 2022

are due to vest from May 2025, subject to the

performance underpin and any discretion

that may be applied by the Committee in

accordance with the Remuneration Policy.

For the performance underpin to be met, the

Committee must be satisfied that business

performance over the performance period

is robust and sustainable, that the business

improved its impact on society and the

environment and was strengthened by

management’s actions.

In assessing the underpin, the Committee

considered financial and non-financial KPIs

of the business as well as delivery against

strategic priorities. The Committee considered

that cardfactory’s performance over the

performance period has been strong and

that through management action, cardfactory

continues to be well positioned to continue to

grow, for the benefit of all its stakeholders.

Over the vesting period, the Company

hasdelivered significant Total Shareholder

Return (TSR), exceeding 60%, (compared

to FTSE indexes which reported up to

6%returns), during a period that included

the recommencement of dividends. The

Committee consider this TSR is attributable

to successful implementation of the strategic

plan by the Executive Directors and senior

leadership team and is satisfied that the

outcome is in line with shareholders and

wider stakeholder experience. In addition,

cardfactory has, over the three-year period,

made significant progress in reducing its

impact on society and the environment,

including development of an ESG strategy

(published in the FY24 Annual Report) and the

progress reported in this and prior Annual

Reports on ESG. On this basis the Committee

was comfortable that the underpin had been

met award should vest in full.

The Committee was also mindful of the

shareholder guidance to assess vesting of

awards to ensure there had been no windfall

gains. The 2022 RSP awards’ share price at

grant was 50.47 pence, below the value applied

for the 2021 RSP awards of 76.54 pence.

However, the Committee recognised that

the share value over the period in advance

of the 2021 RSP grants was temporarily

inflated as stores reopened following Covid

lockdowns and that the grant price in 2022

was higher than that used in 2020. As noted

above, weconsidered that the share price

performance over the vesting period was due

to the successful execution of the strategic

plan and, therefore, represented genuine

performance rather than a windfall gain, and

that no adjustment was needed for this reason.

Therefore, the Committee resolved to

approve vesting of the 2022 RSP awards

and determined that it was not necessary

to exercise any discretion in respect of

the awards. Further details are disclosed

onpage105.

Board changes

Pam Powell was appointed as Senior

Independent Director during the year with

remuneration awarded in line with the

current policy and rates. Roger Whiteside and

TrippLane stood down from the Board during

the year, with all payments inaccordance

with the Remuneration Policy.

How we intend to apply the

Remuneration Policy in FY26

Base salary

The Committee have reviewed the annual

salary for the leadership team, including the

CEO and CFO, and the fee for the Chair.

Overall payroll costs of the business have

increased this year following the October 2024

budget increases to National Living Wage

(+6.7%) and National Minimum Wage (+16.3%

to +18%) and Employer’s National Insurance

(13.8% to 15%), which increases cardfactory’s

annualised payroll costs by £14 million in

FY26, to support lower paid colleagues.

Consequently, the Committee, after taking

account of market data for comparable roles,

applied an annual increase of 2% to each of

the CEO, CFO and Chair, to take effect from 1

April 2025. The Board also increased the base

fee for the NEDs by 2% with effect from 1 April

2025. The additional fees remain unchanged.

The principle adopted by the Committee is

consistent with pay awards made to other

support centre colleagues with awards of

either 2.5%, 2% or 1.5%, dependent on the

salary level compared to market data for

theirroles.

Darcy Willson-Rymer has notified the

Committee that he will not accept the 2%

annual increase approved by the Committee,

after taking account of the fact that following

a restructuring that, at the end of the financial

year saw a number of colleagues exit the

business. Therefore, Darcy’s salary from

1 April 2025 will remain at the current level.

Pension and benefits

Pension entitlements will be maintained at

current levels, which align with the current

3% of salary rate (for salary above the lower

earnings threshold of £6,240 per annum)

applicable to the majority of colleagues. There

are no changes to benefits proposed.

Annual bonus

The maximum annual bonus entitlement

willbe maintained at 125% and 100% of basic

salary for the CEO and CFO, respectively.

The FY26 annual bonus entitlement will be

assessed based on two financial thresholds

which have the potential to award 70% of the

maximum potential bonus award based on:

• achievement of PBT realised over the

financial year (for 60% of the maximum

entitlement); and

• realising a cash flow productivity

(i.e. freecash before dividends,

asapercentage of PBT, both being subject

to Remuneration Committee approval of

adjustments made to reported measures)

(for10% ofthe maximumentitlement),

with the remaining 30% of maximum potential

bonus will be determined by the following

strategic objectives:

• cardfactory.co.uk sales (10% of maximum

bonus entitlement);

• retail partnership sales, including sales

by SA Greetings, Garlanna and Garven

(10%of maximum bonus entitlement):

and

• number of net new stores opened during

the financial year (10% of maximum

bonus entitlement).

REMUNERATION COMMITTEE CONTINUED

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Cash flow is an important measure of

financialperformance for our business.

Managing cash effectively ensures continued

returns to our shareholders through payout

of dividends, and the availability of funds

tomake investment decisions in line with the

Company’s strategic plans. It complements

the PBT measure by driving management

toconvert profits into cash, to manage

working capital and keep interest costs low.

The Committee considered a range of cash

flow measures and determined that free cash

flow productivity was the most appropriate,

asthis measures how effectively management

is able to convert PBT into cash.

Net new stores are a critical building block

of cardfactory’s strategy, contributing a

significant amount to our sales each year.

The Committee, therefore, determined it was

appropriate to incorporate a related measure

into the bonus, along with the existing

strategic measures tied to online and retail

partnership sales.

As introduced last year, an ESG underpin

will apply as part of the annual bonus

whereby the Committee may reduce the

annual bonus payout by up to 10% if the

Committee considers that there has not

been sufficient progress in delivering our

ESG strategy. To inform its decision making

at year-end, the Committee will review

adashboard summarising progress against

our ESGcommitments, which may include

butis not limited to:

• progression of our customer and

employee experience;

• progression in reducing the Group’s

carbon footprint, waste reduction and

progression of sustainability initiatives

within the Group;

• progression against the Group’s

commitment to act responsibly with

respect to the environment, aiming for

a sustainable approach to the use of

resources, avoiding irresponsible disposal

of products and unnecessary waste;

• progression against our refreshed

DE&Istrategy; and

• the Group’s compliance against industry

standard ESG guidelines and best

practices and active management of

ESGconsiderations and risks.

RSP

The maximum RSP award will be maintained

at 87.5% and 75% of basic salary for the

CEO and CFO, respectively. The Committee

proposes to proceed to award Restricted

Shares after the publication of the preliminary

results for FY25 in May 2025. The awards will

be subject to the same performance underpin

adopted in 2024 (see page 104).

Conclusion

The Committee considers that the

Remuneration Policy continues to provide

a strong link to the business strategy and

provides an appropriate link between reward

and performance. Future objectives and

outcomes will be closely aligned, ensuring

they support the delivery of the Group’s

strategy. The Committee will continue to take

account of investor guidelines and the wider

shareholder and other stakeholder experience

in determining the operation of the Policy and

remuneration outcomes each year.

I look forward to addressing any questions from

shareholders in respect of this Report at or in

advance of the AGM and look forward to your

support on the resolution to approve the Annual

Report on Remuneration.

Yours sincerely

Indira Thambiah

Chair of the Remuneration Committee

7 May 2025

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DIRECTORS’ REMUNERATION REPORT

Introduction

The Directors’ Remuneration Policy section (pages 94 to 101) sets out the Remuneration Policy which was approved by shareholders at the 2024 AGM, which is intended to operate for the full

three-year period as permitted under the regulations.

Directors’ Remuneration Policy

cardfactory’s policy for Executive Directors’ remuneration aims to provide a competitive package of fixed and performance-linked pay, which supports the long-term strategic objectives

ofthebusiness. The Policy has been tested against the six factors listed in Provision 40 of the UK Corporate Governance Code 2018:

• Clarity – the policy is as clear as possible and is described in straightforward concise terms to shareholders and the workforce in this report.

• Simplicity – our remuneration structures are simple and Restricted Shares are significantly simpler than other types of long-term incentive plans operated in most other UK-listed

companies.

• Risk – the remuneration policy has been shaped to discourage inappropriate risk taking through a weighting of incentive pay towards shares, an appropriate balance between financial and

non-financial measures in the annual bonus, recovery provisions and in-employment and post-employment shareholding requirements.

• Predictability – elements of the policy are subject to caps and the Restricted Shares are significantly more predictable than performance-based long-term incentive plans operated in

most other UK-listed companies. The Committee may exercise its discretion to adjust Directors’ remuneration if a formula-driven incentive pay out is inappropriate in the circumstances.

Theillustration of the application of the Policy is set out on page 98 and indicates the potential values that may be earned through the remuneration structure.

• Proportionality – there is a sensible balance between fixed pay and variable pay and incentive pay is weighted to shares rather than cash.

• Alignment to culture – there will be a strong emphasis on consistency of approach and fairness of remuneration outcomes across the workforce.

Policy table for Executive Director remuneration

The key components of the Executive Directors’ remuneration are as follows:

Purpose and link to strategy Operation Maximum opportunity Performance metrics

FIXED PAY

Base salary

To attract and retain talent

by ensuring base salaries

are competitive in the

relevant talent market and

to reflect an Executive’s skills

andexperience.

Base salaries are normally reviewed annually, with reference

to factors including scope of role, individual performance,

experience, market competitiveness of total remuneration,

inflation and salary increases across the Group.

Increases are normally effective from 1 April.

While there is no maximum salary, Executive

Directors’ salary increases will normally be in

line with the average percentage increase for

the wider employee population.

In certain circumstances (including, but not

limited to, a material increase in job size

or complexity, promotion, recruitment or

development of the individual in the role or

a significant misalignment with the market)

the Committee has discretion to make

appropriate adjustments to salary levels to

ensure they remain fair and competitive.

Business and individual performance are

both considerations in setting base salary.

Pension

To provide post-retirement

benefits, facilitating the

attraction and retention

ofexecutive talent.

Executive Directors may receive a Company contribution into

a pension plan and/or a cash allowance in lieu of pension.

The maximum Company contribution or cash

allowance will not exceed the percentage rate

available to the majority of the workforce

(currently 3% of salary).

None.

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Purpose and link to strategy Operation Maximum opportunity Performance metrics

Benefits

To provide Executive Directors

with a reasonable level

ofbenefits.

Benefits may include private medical insurance, life insurance,

income protection and the provision of a car or car allowance.

The Committee may introduce other benefits if it is

considered appropriate to do so.

Executive Directors shall be reimbursed for all reasonable

expenses and the Company may settle any tax incurred.

Where an Executive Director is required to relocate to perform

their role, the appropriate one-off or ongoing expatriate

benefits may be provided (e.g. housing, schooling etc).

There is no maximum opportunity for

benefits, as there may be factors outside of

the Company’s control which change the cost

to the Company (e.g. increases in insurance

premiums).

The cost of providing benefits for the year

under review are disclosed in the Annual

Report on Remuneration.

None.

VARIABLE PAY

Annual bonus

To focus Executives on

delivery of year-on-year

financial and non-financial

performance.

The part of the bonus

invested in shares helps

towards achieving an

appropriate balance

between year-on-year

financial performance and

longer-term value creation;

contributes to higher

executive shareholdings;

and supports alignment with

shareholderinterests.

Bonus payments will normally be determined based

on performance in a single financial year and payment

willnormally be made in cash or in shares or a combination

of the two.

If participants have not met the minimum shareholding

requirement, one-third of any bonus (after payment of tax)

would normally be required to be used to acquire shares in

the Company, which would normally be required to be held

for three years.

Clawback and malus provisions apply. The Committee has

discretion to reduce the amount of any bonus potential and

require repayment of any bonus paid within two years of

payment, in the event of material misstatement or error in

accounts or in calculation of bonus, misconduct, corporate

failure, serious reputational damage, material failure of

risk management or in other circumstances where the

Committee consider it appropriate.

Maximum award level under the annual

bonus in respect of any financial year

is125%of salary.

Performance measures and targets are

set by the Committee and the Committee

determines the extent to which the targets

have been achieved.

A majority of bonus will normally be based

onfinancial measures.

For achievement of threshold performance

for any financial measure, up to 15% of the

maximum financial target element of the

bonus is earned (though the Committee may

increase this to up to 25% of maximum if this

is considered appropriate). Normally, 50% of

the bonus shall pay out for on-target levels

ofperformance.

The Committee may adjust the bonus if it

considers the outcome is not representative

of the underlying financial or non-financial

performance of the Company or the

participant or is otherwise not appropriate

in the circumstances. When making this

judgement, the Committee may take into

account such factors as it considers relevant.

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Card Factory plc Annual Report and Accounts 2025

Purpose and link to strategy Operation Maximum opportunity Performance metrics

Restricted Shares

To align the interests of

Executives with shareholders

in growing the value of the

business over the long term.

The Committee may grant annual awards of Restricted

Shares, structured as conditional awards or nil-cost options.

Awards normally vest after three years, subject to continued

employment.

All shares will normally be held for at least five years from

grant (except for sales to meet tax and social security on

vesting). The holding period and vesting period will normally

continue post-cessation of employment to the extent that

awards do not lapse on cessation.

An additional benefit may be provided in cash or shares

related to dividends that would have been paid over the

vesting period or holding period on awards that vest.

Clawback and malus provisions apply. The Committee has

discretion to reduce the amount of any unvested award and

require repayment of any vested award within two years of

vesting, in the event of material misstatement or error in

accounts or in calculation of the share award, misconduct,

corporate failure, serious reputational damage, material

failure of risk management or in other circumstances where

the Committee consider it appropriate.

In accordance with the Companies Act, in order to fund the

nominal value on the allotment of shares to participants on

vesting, the participant will receive a ‘nominal bonus’, which

is paid to Card Factory plc equivalent to the nominal value

ofthe number of shares that will vest.

Maximum award level under the Restricted

Shares in respect of any financial year is

87.5% of salary face value at grant plus the

nominal bonus, on vesting.

In order for Restricted Shares to be capable

of vesting, the Committee must be satisfied

that a performance underpin has been

achieved. It is currently intended that the

performance underpin will be that the

Committee must be satisfied that business

performance is robust, sustainable, that the

business has improved its impact on society

and the environment and management has

strengthened the business. In assessing

performance, the Committee will consider

financial and non-financial KPIs of the

business as well as delivery against strategic

priorities and ESG commitments. The

Committee may determine that alternative

performance underpins shall apply.

The Committee may in its discretion

adjust incentive plan outturn levels, if it

considers that the outcome does not reflect

the underlying financial or non-financial

performance of the participant over the

relevant period or that such vesting level is

not appropriate in the context of relevant

circumstances. When making this judgement,

the Committee may take into account such

factors as it considers relevant. Full disclosure

of the Committee’s assessment will be made

in the Annual Report on Remuneration for

the year in which the assessment is made.

SAYE

To encourage share

ownership across the

workforce.

Executive Directors may participate in the SAYE Plan – a UK

tax-qualified scheme. Executive Directors may participate

in any other all-employee plans on the same basis as other

employees as appropriate.

Participation may be up to HMRC

approvedlimits.

None.

Shareholding guidelines

To encourage share

ownership and ensure

alignment of Executive

interests with those of

shareholders, both while

they are in service and after

cessation of employment

(seepage 100).

Executives are expected to build up and maintain a beneficial

holding of shares in the Company defined as a percentage

of salary, which is currently 250% of base salary for the

CEOand 200% of base salary for the CFO.

Executive Directors will normally be required to retain shares

that vest from future Bonus and Restricted Share awards

until the shareholding guideline has been met.

Details of the current guidelines and

Executive Director shareholdings are included

in the Annual Report on Remuneration.

None.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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Performance measure selection and approach to target setting

The measures used in the annual bonus are selected to reflect the Company’s main financial

KPIs and other strategic objectives for the year. Performance targets are set to be stretching

but achievable, considering the Company’s strategic priorities and the economic environment

in which the Company operates. Financial targets are set taking into account a range of both

internal and external reference points including the Group’s strategic and operating plan.

Adjustments to targets

The Remuneration Committee may adjust the calculation of short and long-term performance

underpins for outstanding Restricted Share awards in specific circumstances and within the

limits of applicable plan rules, provided that the revised conditions are not materially less

challenging than the original conditions. Such circumstances include changes in accounting

standards, major corporate events such as rights issues, share buybacks, special dividends,

corporate restructurings, mergers, acquisitions and disposals.

Other uses of discretion

The Committee, consistent with market practice, retains discretion over a number of areas

relating to the operation and administration of the Policy. These include (but are not limited to)

the following:

• selecting who participates in the incentive plans;

• determining the timing of award grants and/or payments;

• determining the quantum of awards and/or payments (within the limits set out inthePolicy

table);

• determining the form of awards (which may be granted as conditional share awards,

nilornominal cost options, forfeitable awards or, exceptionally, in cash);

• adjusting awards in the event of any variation of the Company’s share capital or any

demerger, special dividend or any other corporate event that may affect the current

orfuture value of the award;

• granting good leaver status (in addition to any specified categories) for incentive plan

purposes based on the rules of the plan;

• determining the treatment of awards in the event of corporate transactions, such as a

takeover or restructuring, including measurement of performance conditions/underpins,

approach to pro-rating for time and whether existing share awards may, instead of vesting,

be replaced by an equivalent grant of a new award in a different company, as determined

by the Committee; and

• determining whether (and to what extent) malus and/or clawback shall apply

toanyincentive.

Differences in remuneration policy operated for other employees

The policy and practice with regard to the remuneration of the senior leadership team below

the Board will normally be consistent with that of the CEO and CFO. The senior leadership

team will normally participate in the same annual bonus scheme and will receive Restricted

Share awards alongside the Executive Directors.

The Policy for our Executive Directors is considered alongside the remuneration philosophy

and principles that underpin remuneration for the wider Group. The remuneration

arrangements for other employees reflect the seniority of each role. As a result, the levels

and structure of remuneration for different groups of employees will differ from the policy for

Executives as set out above, but with the common intention that remuneration arrangements

for all groups are fair.

Approved payments

The Committee reserves the right to make any remuneration payments and/or payments

for loss of office (including exercising any discretions available to it in connection with such

payments) notwithstanding that they are not in line with the Policy set out above where

the terms of the payment were agreed (i) before the Policy set out above came into effect,

provided that the terms of the payment were consistent with any shareholder-approved

Directors’ remuneration policy in force at the time they were agreed; or (ii) at a time when the

relevant individual was not a Director of the Company (or other persons to whom the Policy set

out above applies) and, in the opinion of the Committee, the payment was not in consideration

for the individual becoming a Director of the Company or such other person. For these

purposes, ‘payments’ includes the Committee satisfying awards of variable remuneration and,

in relation to an award over shares, the terms of the payment are ‘agreed’ no later than at the

time the award is granted. This Policy applies equally to any individual who is required to be

treated as a Director under the applicable regulations.

Reward scenarios

The following graphs provide estimates of the potential future reward opportunities for

Executive Directors and the potential split between the different elements of remuneration

under four different performance scenarios: ‘Minimum performance’, ‘Performance in line

with expectations’ and ‘Maximum performance’ and ‘Maximum performance (with 50% share

price increase)’. The projected value for Restricted Shares excludes the impact of any

dividend accrual.

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Card Factory plc Annual Report and Accounts 2025

The following graphs reflects annual entitlements and assumes that future Restricted Share

awards are not scaled back:

Chief Executive Officer

Maximum performance

Performance in line

with expectations

Minimum performance

0 400,000

100%

£529k

£1,266k

£1,788k

42% 24% 34%

30% 34% 24% 12%

800,000 1,200,000 1,600,000 2,000,000

Chief Financial Officer

Maximum performance

Performance in line

with expectations

Minimum performance

0 400,000

100%

£377k

£834k

£1,154k

45% 22% 33%

33% 32% 24% 12%

800,000 1,200,000 1,600,000 2,000,000

Fixed Pay Annual Bonus LTIP 50% share price increase on LTIP

In illustrating potential reward opportunities, the following assumptions are made:

Fixed pay Annual bonus LTIP: Restricted shares

Minimum Salary and benefits

as at 1 April 2025.

The CEO & CFO each

receive a pension

contribution of 3%

on income exceeding

£6,240 per annum.

No annual bonus

payable.

Assumes no restricted

shares vest.

Mid As above. On-target annual

bonus payable. (50%

of maximum).

87.5% and 75% of base

salary for the CEO and CFO

vest, respectively. Assumes

all RSP awards vest

Maximum As above. Maximum annual

bonus payable of

125% and 100%

of base salary for

the CEO and CFO,

respectively.

As above.

Maximum

performance

with 50%

share price

increase

As above. As above. In the maximum scenario

the chart additionally

shows the value of the

Restricted Shares and total

remuneration, if the share

price increases by 50%.

Approach to remuneration for new Director appointments

In determining appropriate remuneration for a new Director, the Committee will take into

consideration all relevant factors to ensure that arrangements are in the best interests of

both cardfactory and its shareholders and will be mindful to pay at the appropriate level

on recruitment. The Remuneration Committee will seek to ensure that the remuneration

arrangements will be in line with those outlined in the policy table above. Executives may

participate in the incentive plan for their financial year of appointment and such participation

maybe be pro-rated taking into account the period of the year in employment.

The maximum level of variable remuneration which may be awarded (excluding any ‘buyout’

awards referred to below) in respect of recruitment is 125% of salary (in respect of annual

bonus) and 87.5% of salary (in respect of RSP awards), which is in line with the current

maximum limit under the annual bonus and RSP.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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The Committee may make an award in respect of a new appointment to ‘buy out’ outstanding

variable pay opportunities or contractual rights forfeited on leaving a previous employer.

In doing so, the Committee will take account of relevant factors including any performance

conditions attached to these awards, the likelihood of those conditions being met and the

proportion of the vesting period remaining. When determining any such ‘buyout’, the guiding

principle would be that awards would generally be on a ‘like-for-like’ basis unless this is

considered by the Committee not to be practical or appropriate.

In cases of appointing a new Executive Director by way of internal promotion, the approach

will be consistent with the policy for external appointees detailed above (save for ‘buy outs’).

Where an individual has contractual commitments made prior to their promotion to the Board,

the Company will continue to honour these arrangements. Measures used for below Board

employees may be different from those used for Executive Directors to tailor incentives to a

particular division, role or individual.

Where an Executive Director has been appointed to the Board at a lower than typical market

salary to allow for growth in the role, larger increases may be awarded to move salary

positioning closer to typical market level as the Executive Director gains experience.

To facilitate any ‘buyout’ awards outlined above, in the event of recruitment, the Committee

may grant awards to a new Executive Director relying on the exemption in the Listing Rules

which allows for the grant of awards to facilitate, in unusual circumstances, the recruitment

of an Executive Director without seeking prior shareholder approval or under any other

appropriate Company incentive plan.

The remuneration package for a newly appointed Non-Executive Director would normally be in

line with the structure set out in the policy table for Non-Executive Directors on page 101.

Service contracts and exit payment policy

Executive Directors

The Committee sets notice periods for the Executive Directors of no more than 12 months.

The Executive Directors may be put on garden leave during their notice period (for up to six

months) and the Company can elect to terminate their employment by making a payment in

lieu of notice equivalent to basic salary and benefits (including pension contributions). Any

payment in lieu will normally be made on a monthly basis and subject to mitigation but the

Committee retains discretion to pay any payment in lieu of notice in a lump sum if appropriate

in the circumstances. Executive Directors’ service contracts are available to view at the

Company’s registered office and at the forthcoming AGM.

Executive Director Date of service contract Notice period

Darcy Willson-Rymer 18 December 2020 9 months

Matthias Seeger 12 December 2022 9 months

If employment is terminated by the Company, the departing Executive Director may have

alegal entitlement (under statute or otherwise) to additional amounts, which would need

tobemet. In addition, the Committee may:

• settle any claims by or on behalf of the Executive Director in return for making an

appropriate payment; and

• contribute to the legal fees incurred by the Executive Director in connection with the

termination of employment, where the Company wishes to enter into a settlement

agreement (as provided for below) and the individual must seek independent legal advice.

In certain circumstances, the Committee may approve new contractual arrangements

withdeparting Executive Directors including (but not limited to) settlement, confidentiality,

outplacement services, restrictive covenants and/or consultancy arrangements. These will only

be entered into where the Committee believes that it is in the best interests of the Company

and its shareholders to do so.

The Company’s policy on termination payments is to consider the circumstances on a case-by-

case basis, considering the Executive’s contractual terms, the circumstances of termination and

any duty to mitigate. The following table summarises how incentives are typically treated in

different circumstances:

Plan Scenario Timing of vesting/payment Calculation of vesting/payment

Annual

bonus.

Default treatment. No bonus is paid. n/a

Any reason the

Committee may

determine.

Normal payment

date, although

the Committee

has discretion to

accelerate.

The Committee has

discretion to remove

the requirement to

acquire shares with

annual bonus earned

in year of departure.

The Committee will normally

determine the bonus outcome

based on circumstances at the

date of leaving. Performance

against targets is typically

assessed at the end of the year

in the normal way and any

resulting bonus will normally

be prorated for time served

during the year. The Committee

may disapply time prorating in

exceptional circumstances.

acquired by

Directors

with annual

bonus.

Not applicable as shares are

purchased and owned outright

by the Executive.

The three-year restriction on

sale of shares will normally

continue to apply.

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Card Factory plc Annual Report and Accounts 2025

Plan Scenario Timing of vesting/payment Calculation of vesting/payment

Restricted

Shares.

Default treatment. Awards lapse. n/a

Death, injury or

disability, redundancy,

retirement, the sale

of the employing

Company or business

out of the Group or

any other reason as

the Committee may

determine.

Normal vesting

date and holding

period would

normally continue

to apply, although

the Committee

has discretion to

accelerate vesting and

remove or reduce the

holding requirement

in exceptional

circumstances.

Any outstanding awards will

normally be prorated for

service over the three financial

years starting with the year

in which the award is made

and over which the underlying

performance of the Company

will be reviewed to determine

vesting. The Committee may

disapply time prorating in

exceptional circumstances.

SAYE. Treated in line with

HMRC rules.

Post-employment shareholding

Executive Directors are normally expected to hold the lower of:

• the number of shares held by the Director on the date they step down from the Board,

where such shares had been (or are subsequently) acquired from Company share

plan awards and investment of bonuses received before or after the termination of

employment, other than permitted sales to meet tax liabilities (but excluding shares

otherwise purchased in the market); and

• for each of the following periods following termination of the employment:

– during the first 12-month period: such number of shares held, on the date their

employment ends, plus shares acquired under employee awards during that period,

thevalue required to be held in accordance with the shareholding guideline applicable

to that former Executive Director; and

– for the subsequent 12-month period: 50% of the value or number of shares held,

attheend of the first 12 month period, the value required to be held in accordance

withthe shareholding guideline applicable to that former Executive Director; and

– after 24 months: no shareholding requirement shall apply, other than any outstanding

holding periods applying under this policy in respect of specific awards or purchases

using bonus proceeds.

The Committee retains discretion to waive or reduce this guideline if it is not considered to be

appropriate in the specific circumstance.

Non-Executive Directors

The Chair and Non-Executive Directors were appointed on the dates set out in the table below.

Their letters of appointment set out the terms of their appointment and are available for

inspection at the Group’s registered office and at the AGM. Appointments are subject to annual

re-election at the AGM. The Chair and the Non-Executive Directors may resign from their

positions but must serve the Board six and one months’ written notice, respectively.

Non-Executive Director Letter of appointment date

Paul Moody 15 October 2018

Pam Powell 3 June 2024

Rob McWilliam 11 October 2021

Indira Thambiah 22 August 2022

Non-Executive Directors are not eligible to participate in the annual bonus or any equity

schemes, do not receive any additional pension or benefits on top of their fees and are not

entitled to a termination payment.

Consideration of employee remuneration and employment conditions

in the Group

The Committee considers the remuneration and employment conditions elsewhere in the

Group when determining remuneration for Executive Directors. The colleague listening

group (CLG) and the wider colleague forums (which feed into the CLG) were consulted on the

draft of this Remuneration Policy in January and February 2024 and considered the changes

to align Executive Directors with the workforce to be appropriate. The Group uses Willis

Tower Watson benchmarking data to review salary and benefits for all pay grades, with this

data being supplemented by executive benchmarking data for other UK listed companies

(primarily a wide range of companies with comparable market capitalisation and constituents

of these Companies that are primarily retail businesses), compiled by Deloitte, as its

remunerationadviser.

Consideration of shareholder views

The Company is committed to engaging with significant investors on remuneration matters

and consulted with 17 of its largest shareholders and three recognised investor bodies to

receive their feedback and reflect their comments prior to proposal of this Remuneration

Policy to shareholders at the 2024 AGM. The majority of those consulted were supportive

of the proposals, as proposed. When determining remuneration policy and its application,

the Committee considers the guidelines of shareholder bodies and shareholders’ views.

TheCommittee is open to feedback from shareholders on remuneration policy and

arrangements and commits to consult in advance of any significant changes to remuneration

policy or its operation. The Committee continues to monitor trends and developments in

corporate governance and market practice to ensure the structure of Executive remuneration

remains appropriate.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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Company Information

External directorships

The Committee acknowledges that Executive Directors may be invited to become independent non-executive directors of other quoted companies which have no business relationship with the

Company and that these duties can broaden their experience and knowledge to the benefit of the Company.

Executive Directors are permitted to accept such appointments with the prior approval of the Chair. Approval will only be given where the appointment does not present a conflict of interest

with the Group’s activities and the wider exposure gained will be beneficial to the development of the individual. Where fees are payable in respect of such appointments, these would be

retained by the Executive Director.

Policy table for Non-Executive Director remuneration

The key components of Non-Executive Directors’ remuneration are as follows:

Purpose and link to strategy Operation Maximum opportunity Performance metrics

Non-Executive Directors’ fees

To attract Directors with the appropriate

skills and experience, and to reflect the time

commitment in preparing for and attending

meetings, the duties and responsibilities of

the role and the contribution expected from

the Non-Executive Directors.

Annual fee for Chair and Non-Executive

Directors.

Additional fees may be paid for additional

roles or time commitment, e.g. chairing

Board Committees.

Non-Executive Directors do not participate in

any incentive schemes or receive any other

benefits (other than travel expenses, which

may be grossed-up for tax).

Benefits may be introduced if considered

appropriate.

Any increases to NED fees will be considered

following a thorough review process and

considering wider market factors.

The maximum aggregate annual fee for all

Directors provided in the Company’s Articles

of Association is currently £1,000,000 per

annum.

Performance of the Board as a whole will

be reviewed regularly as part of a Board

evaluation process.

Minor changes

The Committee may make minor amendments to the Policy set out above (if required for legal, regulatory, exchange control, tax or administrative purposes or to take account of a change

inlegislation) without requiring prior shareholder approval for that amendment.

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Card Factory plc Annual Report and Accounts 2025

ANNUAL REPORT ON REMUNERATION

This is the Annual Report on Remuneration for the financial year ended 31 January 2025 (FY25). This report sets out how the current Remuneration Policy (adopted in 2024) has been applied

inthe financial year being reported on and how the Remuneration Policy (set out on pages 94 to 101) will be applied in the coming year.

Remuneration at a Glance

Overview of Executive Director Remuneration for FY25 and FY26.

Element FY25 FY26

Basic Salary From 1 April 2024:

CEO: £491,400 (+4%)

CFO: £358,800 (+4%)

Average workforce change: +9.1%

From 1 April 2025:

CEO: £491,400 (No change: 2% increase waived by the CEO)

CFO: £365,976 (+2%)

Average workforce change: +7.5%

Pension 3% of basic salary in excess of £6,420 per annum. No change.

Benefits Car Allowance and family private medical insurance. No change.

Annual Bonus

opportunity

CEO: Maximum of 125% of basic salary. No change.

CFO: Maximum of 100% of basic salary. Bonus earned: No change.

• 70% based on PBT performance. 30.89% of 70% • 60% based on PBT performance.

• 10% based on cash flow productivity.

• 15% based on online sales (strategic growth objective). 6.84% of 15% • 10% based on online sales (strategic growth objective).

• 15% based on retail partner sales (strategic growth objective). 0% of 15% • 10% based on retail partner sales (including Garven, Garlanna and SA

Greetings) (strategic growth objective).

• 10% based on net new stores (strategic growth objective).

ESG underpin: Up to 10% of aggregate earned bonus may be forfeited if there has not been

sufficient progress on delivering our ESG strategy.

No change.

Subject to malus and clawback within two years of payment. No change.

One third of bonus (after tax) to be invested in shares if shareholding target not achieved. No change.

RSP opportunity

and time frames

CEO: Maximum of 87.5% of basic salary. No change.

CFO: Maximum of 75% of basic salary. No change.

Awards granted since 2024 to vest after three years (subject to underpins) with a further

two year holding period (save for sale to fund tax and national insurance on vesting).

Underpin enhanced to include consideration of progress against ESGcommitments.

No change.

Subject to malus and clawback within two years of vesting. No change.

SAYE participation In line with HMRC rules. No change.

Shareholding

target

CEO: 250% of basic salary (52.53% of basic salary achieved). Shareholding of 107.7% of basic salary achieved.

CFO: 200% of basic salary (nil shareholding). Shareholding of 16.7% of basic salary achieved.

Post termination

Shareholding

Full shareholding target applied in first 12 months following termination, reducing to 50%

after 12 months with no minimum requirement after 24 months.

No change.

Notice Period 9 months. No change.

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Company Information

Single figure total remuneration paid to Executive Directors – audited

The table below sets out the total remuneration received by each Executive Director providing services to the Company for the year ended 31 January 2025 (FY25) and the prior year:

Financial Year Salary Benefits

Pension

Other

Earned

Bonus

Restricted

Share value

SAYE

value

Total

Remuneration

Total Fixed

Remuneration

Total Variable

Remuneration

Darcy Willson-Rymer FY25 488,250 28,909 13,313 – 231,757 769,118 770 1,532,116 530,472 1,001,645

FY24 468,750 27,347 13,313 – 483,398 531,567 440 1,524,815 509,410 1,015,405

Matthias Seeger

FY25 356,500 10,575 10,508 – 135,375 – 770 513,728 377,583 136,145

FY24 240,615 9,739 5,081 130,000 198,848 – 2,241 586,524 255,436 331,088

1. Benefits comprise either a car allowance or a contribution to family private medical insurance (both of which are taxable) and also the value of insurance premiums paid (a non-taxable benefit) under the Group Life Assurance and Income

Protection Schemes.

2. Pension benefit comprises payments to a stakeholder pension scheme (defined contribution) or a cash payment in lieu of pension contributions.

3. In accordance with the agreed terms of appointment, the Company paid the sum of £130,000 to Matthias Seeger in July 2023 in lieu of an equivalent bonus forfeited by him that he would have received from his previous employer.

4. See details of FY25 bonus payments in the Remuneration Committee Chair’s letter and below. This annual bonus is due to be paid in May 2025. One-third of the bonus (after payment of tax) must be used to acquire Card Factory plc shares.

Bonuses are calculated based on exact figures and presented rounded.

5. The restricted share value for FY25 is based on the average share price over the three-month period to 31 January 2025 (91.88 pence), as the RSP award granted in 2022, with a performance period that ended on 31 January 2025, will vest from

12 May 2025, see page 105 for details. The value includes a nominal bonus award of 1 pence per share to fund the Companies Act requirement for payment of nominal value on allotment of the shares and a dividend equivalent of 5.7 pence per

share that accrues on these shares based on dividends declared from the date of grant to 31 January 2025. Further dividend equivalents may accrue on these shares in respect of dividends to be paid before allotment of the shares to satisfy

these awards. Of the £769,118 restricted shares value for Darcy Willson-Rymer for FY25, £318,507 is attributable to share price growth since the date of grant. The restricted share value for FY24 is based on the average share price over the

three-month period to 31 January 2024 (102.33 pence), as the RSP award granted in 2021, with a performance period that ended on 31 January 2024, commenced vesting from 14 June 2024. The value includes a nominal bonus award of 1 pence

per share to fund the Companies Act requirement for payment of nominal value on allotment of the shares. No dividend equivalent had accrued on these awards as at 31 January 2024. Half of this award (257,218 shares) vested from 14 June

2024, without any dividend equivalent, with the remaining tranches accruing an entitlement to a dividend equivalent of 5.7 pence per share as at the date of this report. Further dividend equivalents may accrue on these shares in respect of

dividends to be paid before allotment of shares to satisfy these awards. Of the £531,567 restricted shares value for Darcy Willson-Rymer for FY24, £132,673 is attributable to share price growth.

6. Embedded value of SAYE options at grant (i.e. the value of the discount). There are no performance conditions.

7. Matthias Seeger was appointed as an Executive Director (CFO) on 22 May 2023 and the FY24 remuneration disclosed is from this date. Matthias Seeger did not have any Restricted Share awards eligible to vest for FY24 or FY25.

Annual bonus payments and link to performance

Bonus opportunities for FY25 were 125% of salary for Darcy Willson-Rymer and 100% of salary for Matthias Seeger. The bonus was subject to achieving Profit Before Tax targets (70% of the

opportunity) and Strategic Objectives (30% of the opportunity). As a result of financial performance and partial achievement of the strategic objectives, the total bonus payout for FY25 was

37.7% of maximum. This resulted in total bonus payments of £231,757 for the CEO and £135,375 for the CFO. In line with policy, one-third of the bonus (after payment of tax) must be used

toacquire Card Factory plc shares which must be held for three years.

PBT (70% of bonus opportunity) – audited

The PBT performance targets for the year and final performance achieved against this element are as set out in the table below. The Committee applied the adjusted PBT for the year,

aftertaking account of the adjustments to actual PBT (see page 170).

Performance level

FY25

PBT

target range

Percentage of

total PBT bonus

pool available

if performance

level achieved

PBT

realised (after

adjustments)

Percentage of

total bonus

pool payable

(% of maximum)

Threshold £63.2m 15%

£66.0m 30.9% of 70%Target £66.5m 50%

Maximum £69.8m 100%

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Card Factory plc Annual Report and Accounts 2025

Achievement against strategic objectives (30% of bonus opportunity) – audited

The strategic objectives for the CEO and CFO were set at the start of the year and outlined in last year’s report. The strategic objectives have been reviewed in detail with one objective being

partly achieved and the other objective not being achieved, giving an achievement of 6.84% of the maximum 30% of the total bonus opportunity. The specific outcomes for each objective

wereas follows:

Strategic objective Link to strategy Target and Stretch performance set Outcome

Bonus achieved (% of

maximum)

cardfactory.co.uk sales. Omnichannel is one of the key

strategic sales channels targeting

system updates to improve the

customer journey to improve

customer retention and sales.

Threshold: cardfactory.co.uk sales of £8.0 million.

Target: cardfactory.co.uk sales to achieve £8.9 million.

Stretch: cardfactory.co.uk sales to achieve £9.8 million.

£8.8 million. 6.8% of 15%

Retail partnership

sales.

Development of retail partnerships

is a key growth sales channel.

Threshold: business partner sales (excluding SA Greetings) of £8.0 million.

Target: business partner sales (excluding SA Greetings) of £8.8 million.

Stretch: business partner sales (excluding SA Greetings) of £9.7 million.

£6.2 million 0% of 15%

For each element of the bonus, 15% of the maximum potential bonus opportunity pays out for threshold performance, 50% of maximum potential bonus opportunity paying out for target

performance with 100% of the maximum potential bonus opportunity paying out for maximum performance. Straight-line payout applies between Threshold, Target and Stretch.

The bonus is also subject to an ESG underpin. The Committee considered that sufficient progress has been made during FY25 on delivery of the ESG strategy that was published in the FY24

Annual Report (see also pages 36 to 43) and therefore determined that the underpin had been met, and no reduction to the bonus award should be made in this respect.

The Committee then considered the overall performance of the business and the stakeholder experience during the year. Notwithstanding that performance under the strategic elements was

below expectations, the Committee considered that as the achievement of PBT was at broadly on-target levels, delivered through overperformance in the core sales channel, the overall annual

bonus outcome was fair and reasonable in the round. Therefore, no discretion was exercised to adjust the formulaic outcome.

Grants of Restricted Shares FY25 – audited

Conditional awards of Restricted Shares were granted to the Executive Directors on 26 June 2024. In line with our approach in previous years, annual RSP awards of shares worth 87.5% of basic

salary for the CEO and 75% of salary for the CFO.

Executive Director

Number of

Restricted

awarded

Face value of

award value as

a % of salary

Face/maximum

value of

Restricted

Shares at grant

date

Measurement

period for

performance

underpin

Darcy Willson-Rymer 456,449 87.5% £429,975 1.2.24–31.1.27

Matthias Seeger 285,668 75% £269,099 1.2.24–31.1.27

1. Based on the average share price for the three trading days to and including 25 June 2024 of 94.2 pence.

For these Restricted Shares to vest, the Committee must be satisfied that business performance over the three years commencing 1 February 2024 is robust and sustainable, that the business

improved its impact on society and the environment and that management has strengthened the business. In assessing performance, the Committee will consider financial and non-financial

KPIs of the business as well as delivery against strategic priorities and ESG commitments. To the extent it is not satisfied with performance the Committee may scale back the level of vested

awards, including to zero. There will be full disclosure in the Annual Report and Accounts of the Committee’s determination of this ‘performance underpin’ at the time of vesting.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Company Information

Upon determination by the Remuneration Committee of the full or partial satisfaction of the

performance underpin condition, any Restricted Shares will vest on the third anniversary of the

date of grant, subject to a holding period which (save for permitted sales to meet tax liabilities

from vesting) will normally end on the fifth anniversary of the date of grant.

2022 LTIP Restricted Share award vesting – audited

Restricted Share awards granted in May 2022 are scheduled to vest from 12 May 2025,

subject to the performance underpin and any discretion the Committee may exercise.

Themeasurement period for the performance underpin for these awards was 1 February 2022

to 31 January 2025. For the performance underpin to be met, the Committee must be satisfied

that business performance over the performance period was robust and sustainable and that

the business improved its impact on society and the environment and has been strengthened

by management’s actions. In assessing the underpin, the Committee considered financial and

non-financial KPIs of the business as well as delivery against strategic priorities.

The Committee considered that cardfactory’s performance over the performance period has

been strong and that through management action, cardfactory continues to be well positioned

to continue to grow, for the benefit of all its stakeholders. The Committee also considered that

the growth in share price since that grant is attributable to successful implementation of the

strategic plan by the Executive Directors and senior leadership team and is satisfied that the

outcome is in-line with shareholders and wider stakeholder experience.

The Committee also noted that over the period:

• the significant improvement in the business performance over the performance period,

with all financial key performance indicators (including Revenue, PBT, Basic EPS, Leverage

and Share Price) being materially improved over the period, with dividend payments

recommenced in 2024;

• Total Shareholder Return (TSR) exceeding 60%, compared to FTSE Small Cap and FTSE 250

indexes which reported up to 6% returns (see chart opposite);

• good progress has been made on the impact on society and the environment, including

development of a strategy, with targets for 2033 and Net Zero targets for 2050, including

assessments and steady progress in reduction in waste and packaging, assessment

ofwider Scope 3 emissions and high levels of colleague engagement and additional focus

on supporting communities; and

• that vesting of the awards in full reflects the performance of the business over that period

and delivery of the strategic plan.

Value of £100 invested from 1 Feb 2022 to 31 Jan 2025

100

150

200

250

01 Feb

2022

30 Apr

2022

31 Jul

2022

31 Oct

2022

31 Jan

2023

30 Apr

2023

31 Jul

2023

31 Oct

2023

31 Jan

2024

31 Jan

2025

30 Apr

2024

31 Jul

2024

31 Oct

2024

Card Factory FTSE 250

FTSE SmallCap

The Committee was mindful of the shareholder guidance to assess vesting of awards to avoid

windfall gains. An additional element considered by the Committee assessed the share price at

the time of grant: The 2022 RSP awards share price at grant was 50.47 pence, below the value

applied for the 2021 RSP awards of 76.54 pence. However, the Committee recognised that

the share value over the period in advance of the 2021 RSP grants was temporarily inflated

asstores reopened following Covid lockdowns, with the Committee concluding that there

wasno need to adjust award levels at grant for ‘windfall gains’.

On this basis the Committee was comfortable that the award should vest in full. Therefore,

theCommittee resolved to approve vesting of the 2022 RSP awards and determined that

itwasnot necessary to exercise any discretion in respect of the awards.

SAYE – audited

Awards under the HMRC-approved SAYE plan were granted to all participating employees

on23 July 2024. Options were granted at a discount of 20% to the share price on grant and

vestafter three years subject to continued employment.

Executive Director

Number of

SAYE options

awarded

Face/maximum

value of awards

at grant date

% of award

vesting at

threshold

Performance

period

Darcy Willson-Rymer 4,086 £3,849 n/a n/a

Matthias Seeger 4,086 £3,849 n/a n/a

1 Value stated is the value of the shares under option, being the number of shares times the value determined over the

three days to, and including, 25 June 2024, of 94.2 pence.

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Card Factory plc Annual Report and Accounts 2025

Single figure total fees paid to Non-Executive Directors – audited

The table below sets out a single figure for the total remuneration received by each

Non-Executive Director for the year ended 31 January 2025 and the prior year.

Non-Executive Director

Base fee paid Additional fees Total

FY25 FY24 FY25 FY24 FY25 FY24

Paul Moody (Chair) £180,833 £170,313 – – £180,833 £170,313

Roger Whiteside (SID)

£23,760 £58,330 – – £23,760 £58,330

Pam Powell (SID)

£37,840 – – – £37,840 –

Nathan (Tripp) Lane

£25,667 £49,317 – – £25,667 £49,317

Rob McWilliam £51,667 £49,010 £10,333 £10,000 £62,000 £59,010

Indira Thambiah £51,667 £49,010 £10,333 £10,000 £62,000 £59,010

1. Roger Whiteside resigned on 20 June 2024.

2. Pam Powell was appointed on 21 June 2024.

3. Tripp Lane resigned on 26 July 2024.

Payments for loss of office and payments to former Directors – audited

No payments for loss of office or payments to past Directors have been paid during the year

which have not already been disclosed in previous years.

Historical TSR performance and CEO remuneration

The graph below illustrates the Total Shareholder Return (TSR) of Card Factory against

the FTSE250 Index and FTSE Small Cap Index over the 10 year period to 31 January 2025.

Theseindices have been chosen as they are recognised, broad-equity market indices of which

the Group has been a member for this period.

Value of £100 invested from 31 Jan 2015 to 31 Jan 2025

Card Factory FTSE 250

FTSE SmallCap

100

150

200

250

31 Jan

2015

31 Jan

2016

31 Jan

2017

31 Jan

2018

31 Jan

2019

31 Jan

2020

31 Jan

2021

31 Jan

2022

31 Jan

2023

31 Jan

2024

31 Jan

2025

CEO

2024/25

(FY25)

2023/24

(FY24)

2022/23

(FY23)

2021/22

(FY22)

2020/21

(FY21)

2019/20

(FY20)

2018/19

(FY19)

2017/18

(FY18)

2016/17

(FY17)

2015/16

(FY16)

Single figure of remuneration (£’000) 1,532 1,525 943 829 525 593 611 496 1,005 951

Annual bonus outcome (% of max) 37.7% 82.5% 80% 66% – 10% 15% – 20% 79%

LTIP vesting

(% of max) 100% 100% n/a n/a 50% – – n/a 46.6% n/a

1. For FY22, the amounts set out in the FY23 Annual Report are grossed up, on a pro rata basis to show the position for comparison purposes assuming Darcy Willson-Rymer had been appointed from 1 February 2021 rather than 8 March 2021

(the date of his actual appointment).

2. For FY21 this represents all remuneration paid to Karen Hubbard to 30 June 2020 (the date of her resignation) and payments to Karen Hubbard during her period of garden leave to 31 December 2020 and the proportion of the pro rata

Restricted Share award that vested in July 2021.

3. For FY17 this represents the aggregate single figure for Karen Hubbard (from date of appointment as CEO) and Richard Hayes (to date of stepping down as CEO).

4. All LTIP awards vesting from and including FY21 were restricted share awards granted under the LTIP. Awards vesting to and including FY20 were performance share awards under the LTIP.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Company Information

Percentage change in remuneration of Directors and all employees

The table below shows the change each year for each Director’s salary/fees, benefits and bonus, for each of the last five financial periods, as compared to the salary change for all employees

(excluding such Directors), based on a total full-time equivalent reward for the relevant financial year. Where a Director was appointed or resigned part way through the financial year,

theirsalary/fees, benefits and bonus are grossed up to reflect as full-year equivalent to provide for meaningful reflection for the year-on-year change:

Year-on-year change %

Average

employee

Executive Directors

Paul

Moody

Pam

Powell

Rob

McWilliam

Indira

Thambiah

Darcy

Willson-Rymer

Matthias

Seeger

FY25 compared to FY24

Salary/Fees 10.85% 0.46% 48.16% 6.18% n/a 5.07% 5.07%

Bonus -28.21% -52.1% -58.83% n/a n/a n/a n/a

Benefits

44.97% 41.81% 28.08% n/a n/a n/a n/a

FY24 compared to FY23

Salary/Fees 10.27% 4.17% n/a 16.33% – 9.51% 28.56%

Bonus 9.77% 7. 42% n/a n/a – n/a n/a

Benefits

3.45% 1.3% n/a n/a – n/a n/a

FY23 compared to FY22

Salary/Fees 13.25% 0% – -3.0% – 1.7% n/a

Bonus 10.81% 34.5% – n/a – n/a n/a

Benefits 17.75% 5.7% – n/a – n/a n/a

FY22 compared to FY21

Salary/Fees

4.7% 1.0% – -54.0% – n/a –

Bonus 89.36% 100% – n/a – n/a –

Benefits 28.7% -60.8% – n/a – n/a –

FY21 compared to FY20

Salary/Fees 5.3% – – 127.88% – – –

Bonus -64.3% – – n/a – – –

Benefits 12.8% – – n/a – – –

1. The Average Employee is the FTE for all UK Group employees. Data for FY23 compared to FY22 and for FY22 compared to FY21 for the average employee bonus and benefits have been restated to ensure the bonus amount reported is the

bonus earned in the financial year, rather than the date on which the bonus is paid (which relates to the amount earned in the prior financial year).

2. Darcy Willson-Rymer’s remuneration information change for FY22 compared to FY21 reflects the annualised salary and benefit for Darcy (who was appointed 8 March 2021) compared to the annualised data for the former CEO, Karen Hubbard,

for FY21, on the basis stated in note 2 to the preceding table.

3. Reduction in fees received during FY21 (compared to FY21) is attributable to waivers of fees by Directors over the periods of lockdown due to the Covid-19 pandemic.

4. Benefits includes all income in the Single Figure tables excluding Salary/Fees and Bonus. The increase in Benefits for the average employee in FY24 reflects the increase to national minimum/living wage effected in April 2023 (with many other

benefits being applied to these increased rates).

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Card Factory plc Annual Report and Accounts 2025

CEO to employee pay ratio

FY25 Method

25th percentile

pay ratio

Median

pay ratio

75th percentile

pay ratio

Ratio Option A 61.4 : 1 60.8 : 1 59.2 : 1

Employee salary £24,936 £24,936 £25,621

Employee total remuneration £24,936 £25,152 £25,876

FY24 ratio Option A 67.6 : 1 64.3 : 1 61.8 : 1

FY23 ratio Option A 44.7 : 1 43.6 : 1 42.1 : 1

FY22 ratio Option A 51.9 : 1 40.3 : 1 38.2 : 1

FY21 ratio Option A 31.4 : 1 30.6 : 1 29.5 : 1

FY20 ratio Option A 35.2 : 1 33.1 : 1 32.2 : 1

cardfactory has chosen Option A (pursuant to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended)), which provides a comparison of

the Company’s full-time equivalent total remuneration for all UK employees against the CEO for the FY25 financial year as the most appropriate methodology to report the ratio, in line with the

recommendation from the UK Government Department for Business, Energy and Industrial Strategy and shareholder and proxy-voting bodies.

The Committee considers pay ratios as one of many reference points when considering remuneration. Throughout the Group, pay is aligned with our pay principles, is structured to be as

consistent as possible and is market-competitive in the context of the sector in which we operate. The Committee notes the limited comparability of pay ratios across companies and sectors,

given the diverse range of business models and employee population profiles which exist across the market. A significant proportion of the CEO’s potential pay is delivered in variable

remuneration which may, therefore, fluctuate significantly on a year-to-year basis. The ratios are impacted by the demographic makeup of our workforce. Over 94% of our colleagues work in

our retail stores and warehouses where rates of pay are lower than those for management roles and those colleagues based at our support centre. This reflects the retail sector more broadly.

In addition, while warehouse and retail colleagues are eligible to participate in the SAYE plan and have access to incentive and bonus schemes, the CEO’s higher bonus and RSP opportunities

reflect the nature and complexity of the role as well as the remuneration levels in retail businesses of a similar size.

The Committee recognises that the material increase in the CEO pay ratio in the last two years, as a result of CEO pay including the value of Restricted Share awards, which start to vest under

the Long Term Incentive Plan which reflect on improved financial performance and progress on the strategic priorities since the CEO's appointment in 2021. Whilst the CEO single figure

earnings has therefore increased significantly, the majority of the Group’s employees are not subject to equivalent variable pay awards. Many employees earn National Living Wages (which have

been subject to sizeable year-on-year increases) and have also benefited from certain enhancements to pay and benefits as part of an ongoing programme to provide a ‘fair deal’ for colleagues

on our journey to becoming a median market payer.

The Committee notes the slight reduction in the ratio and recognise this is attributed to (a) the year-on-year increases to National Living Wages which directly benefit the majority of

cardfactory’s workforce; and (b) the variable pay component of CEO pay has a significant impact on total CEO remuneration, with CEO pay for FY25 being comparable to FY24 total

remuneration, with the higher value of RSPs earned largely offsetting the reduced bonus award.

As required in the regulations, the Company is satisfied that the ratios are appropriate and fair and is consistent with the Company’s wider pay, reward and progression policies affecting

ourcolleagues.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Company Information

Distribution statement

The charts below illustrate the year-on-year change in total remuneration for all employees and total shareholder distributions (‘TSD’)

The total remuneration paid in respect of FY25 (as set out in note 5 to the Financial Statements, which form part of this report on page 145) was £174.5 million (FY24: £162.4 million).

Statement of shareholder voting

The following table shows the results of the shareholder votes on the Annual Report on Remuneration at the 2024 AGM and for the Directors’ Remuneration Policy at the 2024 AGM:

Remuneration Policy 2024 Annual Report on Remuneration 2024

Total number

of votes

% of

votes cast

Total number

of votes

% of

votes cast

For (including discretionary) 201,895,508 96.00 209,152,492 99.42

Against 8,405,067 4.00 1,230,052 0.58

Total votes cast (excluding withheld votes) 210,300,575 – 210,382,544 –

Total votes withheld 125,220 – 43,251 –

Total votes cast

(including withheld votes) 210,425,795 – 210,425,795 –

1. A withheld vote is not a vote in law and is not counted in the calculation of the proportion of votes cast for and against a resolution.

180

£m Total remuneration

(up +7.4%)

135

120

105

150

165

2024/2025

£174.5m

£162.4m

2023/2024

£m Total shareholder distributions

(up +£1.2m)

2024/2025

£16.7m

£15.5m

2023/2024

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Directors’ shareholdings and interest in shares – audited

The Committee sets shareholding guidelines for Executive Directors. Executive Directors are required to retain shares that vest from future Restricted Share awards and acquire shares with

one-third of any bonus (after payment of tax) until the shareholding requirement is met. The current guideline is to build and maintain, over time, a holding of shares in the Company equivalent

in value to at least 250% and 200% of base salary for the CEO and CFO, respectively. The Executive Directors have not yet met the shareholding guideline.

Director

Shares held RSP awards held SAYE options held

Current

shareholding

(% of salary/

fee

)

Shareholding

requirement

(% of salary/

fee)

Guideline

met?

Owned

outright

Unvested and

not subject to

performance

Unvested and

subject to

performance

Unvested

and subject

to continued

employment

Executive Directors

Darcy Willson-Rymer 557,078 1,037,397 884,881 24,972 107.7% 250% No

Matthias Seeger 60,470 – 553,802 16,673 16.7% 200% No

Non-Executive Directors

Paul Moody 200,000 – – –

Pam Powell 9,875 – – –

Rob McWilliam 32,578 – – –

Indira Thambiah – – – –

1. Calculated in respect of shares ‘owned outright’, by applying the closing share price of the Company on 31 January 2025 of 95 pence and applying annual salary as at this date.

During the year, the RSP award granted to Darcy Willson-Rymer in 2021 in respect of 514,436 shares were approved for vesting, with 257,218 of these shares being allotted on 14 June 2024.

Darcy Willson-Rymer also exercised his option granted under the SAYE plan, to acquire 13,526 shares on 1 August 2024. Otherwise, no RSP awards or share options under the SAYE plan were

exercised by the Directors during FY25. Since the end of the year, the Committee approved the vesting (subject to the LTIP rules and terms of the awards) of all awards granted in 2022, which

includes RSP awards over 780,197 shares granted to Darcy-Willson Rymer, which are now classified as unvested awards not subject to performance conditions (as reflected in the table above).

Otherwise, there have been no changes in the numbers of shares owned by the Directors and their connected persons between the end of the year and the date of this report.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Company Information

Details of Directors’ interests in shares in incentive plans – audited

Date of grant

Share price

at grant Exercise price

Number of

shares awarded

Face value

at grant

Performance period Exercise period

No. of shares awarded

that have been issued

(before sale to fund tax)

Darcy Willson-Rymer

Restricted Shares 26.06.24 94.2p n/a 456,449 £429,975 01.02.24 – 31.01.27 n/a –

Restricted Shares

24.05.23 96.5p n/a 428,432 £413,437 01.02.23 – 31.01.26 n/a –

Restricted Shares

12.05.22 50.468p n/a 780,197 £393,750 01.02.22 – 31.01.25 n/a –

Restricted Shares

14.06.21 76.54p n/a 514,436 £393,750 01.02.21 – 31.01.24 n/a 257,218

SAYE 23.07. 24 94.2p 75.36p 4,086 £769.8 – 01.09.27 – 28.02.28 –

SAYE 27.06. 23 89.3p 71.5p 2,467 £440.6 – 01.07.26 – 31.12.26 –

SAYE 08.06.22 61.07p 48.86p 18,419 £2,249 – 01.07.25 – 31.12.25 –

Matthias Seeger

Restricted Shares 26.06.24 94.2p n/a 285,668 £269,099 01.02.24 – 31.01.27 n/a –

Restricted Shares

24.05.23 96.5p n/a 268,134 £256,750 01.02.23 – 31.01.26 n/a –

SAYE 2 3.07. 24 94.2p 75.36p 4,086 £769.8 – 01.09.27 – 28.02.28 –

SAYE 27.06. 23 89.3p 71.5p 12,587 £2,248 – 01.07.26 – 31.12.26 –

1. The number of shares comprising each RSP award was calculated based on the average, middle-market quotation of a share in the capital of the Company over the three months prior to the date of grant (and in respect of the RSP award made

in 2024, over the three days prior to the date of grant). Performance conditions and underpins for the restricted share awards granted in 2022 and 2024 are set out on pages 104 and 105. The restricted share awards made in 2021 did not

include “thebusiness improved its impact on society and the environment” in the performance underpin, but otherwise, was on same as the terms applicable to awards made in 2022 (see page 105, save for the performance period (noted

above)). Therestricted share awards made in 2023 are subject to the same performance conditions and underpin applicable to the awards made in 2022, save the performance period is 1 February 2023 to 31 January 2026.

2. In respect of restricted share awards, the employer pays a nominal bonus of 1 pence per share at the time of vesting. This nominal bonus is applied to pay the subscription price to meet the Companies Act requirements for payment of nominal

value on allotment. A dividend equivalent is also paid in respect of dividends paid with a record date after the date of grant the date of allotment of the shares.

3. Face value of SAYE awards at grant is the value of the 20% difference between the share value at grant and the exercise price, across all shares under option.

How the Policy will be applied in FY26

Salary

The Committee reviewed the annual salary for the senior leadership team, including the CEO and CFO. In determining increases, the Committee took into account market data with comparisons

to other UK listed retail businesses and to UK listed companies with similar market capitalisations as well as taking into account the average salary increase across the workforce of 7.5%.

Asa result, the Committee determined the CEO and the CFO would receive a salary increase of 2% for FY26 with increases taking effect on 1 April 2025. Darcy Willson-Rymer has notified the

Committee that he will waive the 2% annual increase approved by the Committee, after taking account of the fact that, following a restructuring at the end of the financial year saw a number

ofcolleagues exit the business, therefore, his salary from 1 April 2025 will remain at the current level.

The salaries of the Executive Directors with effect from 1 April 2025 are as follows:

Executive Director 1 April 2025 1 April 2024

Darcy Willson-Rymer £491,400 £491,400

Matthias Seeger £365,976 £358,800

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Card Factory plc Annual Report and Accounts 2025

Benefits and pension

These will be paid in line with the Policy.

Annual bonus

The annual bonus for FY26 is capped at 125% and 100% of salary for the CEO and CFO (respectively), up to 70% is based on financial performance and 30% can be realised from achievement

ofstrategic objectives. The annual bonus is subject to an ESG underpin.

The financial targets have been set by the Committee and will require Executive Directors to deliver significant stretch performance compared to market expectations at the start of the financial

year and the financial performance realised in FY25. Given the close link between these targets and cardfactory’s competitive strategy, financial targets are considered commercially sensitive

but will be published in next year’s Annual Report on Remuneration.

The objectives set for both the CEO and CFO for FY26, which are shared by all of the senior leadership team are as follows:

Objective Link to strategy Bonus potential (% of maximum bonus opportunity)

Financial objectives¹ 70% total

PBT based target Group financial performance and improvement in profitability. 60%

Cash flow productivity Measure to ensure focus on effectiveness of turning profit into cash, to be applied under the Capital Allocation Policy. 10%

Strategic objectives¹ 30% total

cardfactory.co.uk sales Online sales (including certain omnichannel initiatives) is one of the key strategic sales channels targeting sales growth. 10%

Retail partnership sales Development and growth of retail partnerships and recent acquisitions is a key growth sales channel. 10%

Net new stores Increasing UK & Ireland store numbers is a key component for growth in the primary sales channel. 10%

1. Quantums for Threshold, Target and Stretch and specific terms for each objective are commercially sensitive and will be published in the Annual Report on Remuneration for the year to 31 January 2026.

For each element of the bonus, 15% of the maximum potential bonus opportunity pays out for Threshold performance, 50% of maximum potential bonus opportunity paying out for Target

performance with 100% of the maximum potential bonus opportunity paying out for maximum performance (i.e. Stretch). Straight-line payout applies between Threshold, Target and Stretch.

In line with the terms adopted in for the FY25 bonus plan, an ESG underpin will apply, whereby the Committee may reduce the annual bonus payout by up to 10% if the Committee considers

that there has not been sufficient progress in delivering our ESG strategy. To inform its decision making at year-end the Committee will review a dashboard summarising progress against

ourESG commitments, which may include, but is not limited to: progression of our customer and employee experience; progression in reducing the Group’s carbon footprint, waste reduction

and progression of sustainability initiatives with the Group; progression against the Group’s commitment to act responsibly with respect to the environment, aiming for a sustainable approach

tothe use of resources, avoiding irresponsible disposal of products and unnecessary waste; progression against our refreshed DE&I strategy; the Group’s compliance against industry standard

ESG guidelines and best practices; and active management of ESG considerations and risks.

Restricted Shares

Restricted Shares will be granted over shares with a value at the time of grant of up to 87.5% of salary and 75% of salary for the Chief Executive and Chief Financial Officer, respectively,

subjectto a performance underpin and the other terms described in the new Remuneration Policy and under the LTIP Scheme Rules. Any awards are proposed to be granted following

publication ofthe preliminary results for FY25.

The Restricted Share Awards will be subject to a performance underpin whereby in order for the Restricted Shares to vest the Committee must be satisfied that business performance is robust,

sustainable, that the business has improved its impact on society and the environment and management has strengthened the business. In assessing performance, the Committee will consider

financial and non-financial KPIs as well as delivery against strategic priorities and ESG commitments.

There will be full disclosure in the Annual Report and Accounts, at the time of vesting, of the Committee’s determination of the performance underpin.

ANNUAL REPORT ON REMUNERATION CONTINUED

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Company Information

Non-Executive Director fees

The Chair and Non-Executive Director fees have been reviewed in accordance with the principles applied for all colleague pay reviews (see page 92), with any changes to take effect from 1 April 2025.

Following a review of market data, the Chair’s fee and the NED base fee will be increased by 2%, whilst no increase will be applied to the additional fees payable to SID (in excess of the NED

base fee) and the Committee chairs, which are considered to be in line with market rates:

From 1 April 2025 From 1 April 2024

Base fees

Chair £185,640 £182,000

Senior Independent Director £63,440 £62,400

Non-Executive Director £53,040 £52,000

Additional fees

Chair of the Remuneration Committee £10,400 £10,400

Chair of the Audit & Risk Committee £10,400 £10,400

Remuneration Committee membership and advisers

The Remuneration Committee membership during the period is set out in the Corporate Governance Report on pages 83 and 84. The Committee fulfils its duties with a combination of both

formal meetings and informal consultation with relevant parties, both internal and external. The Committee appointed Deloitte LLP as principal external advisers in 2023, who were appointed

by the Committee following a tender process. Deloitte LLP provide other services to the Group, including debt advisory and other unrelated consultancy services. Deloitte LLP are signatories

to the Code of Conduct for Remuneration Consultants in the UK, details of which can be found on the Remuneration Consultants Group’s website at remunerationconsultantsgroup.com.

Accordingly, the Committee is satisfied that the advice received is objective and independent. During the financial year to 31 January 2025, fees of £35,500 (plus VAT) were paid to Deloitte

LLP in respect of advice to the Committee. The Committee is comfortable that the Deloitte engagement partners and team that provides remuneration advice to the Committee do not have

connections with the Company or its Directors that may impair their independence. The Committee reviewed the potential for conflicts of interest and judged that there were appropriate

safeguards against such conflicts.

Committee activities

During FY25 and up to the approval of this Report, the Committee met to consider the following remuneration matters.

• Review the operation of the Remuneration Policy in FY25, assess appropriateness of the Policy, and consider whether any updates would be appropriate.

• Consider performance against targets and resulting bonus payments for FY24 and proposed bonus awards for FY25 and vesting of the 2021 and 2022 Restricted Share awards under the

Long Term Incentive Plan.

• Finalise the financial targets and (since the year-end) consider the performance against the targets and resulting bonus payments and consideration of the exercise of discretion for the FY25

annual executive bonus plan and to agree the measures and targets for the FY26 annual executive bonus.

• Consider and approve annual salary increases for the senior leadership team, the CEO and the Chair, and the wider workforce salary and benefit reviews.

• Assess good leaver designations and approval of terms for certain leavers.

• Review developing trends in remuneration market practice, investor guidelines and governance.

• Review and consider wider Group remuneration policies and practices and the approach to employee engagement as it relates to remuneration matters.

• Undertake various other reviews and approvals (as appropriate) in accordance with the Terms of Reference for the Committee adopted by the Company.

• Formally approve the Directors’ Remuneration Report as set out in this Annual Report.

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The work of the Remuneration Committee

Set out below are those areas of the Committee’s work that it is required to report under the Code and reporting regulations and which are not covered elsewhere in this Directors’

Remuneration Report.

Engagement with stakeholders

The Committee consulted with shareholders and the colleague listening group (CLG) on the changes made to the Directors’ Remuneration Policy (set out on pages 94 to 101), prior to

recommendation of the Policy for adoption at the 2024 AGM. Support for the Directors’ Remuneration Policy, that was adopted at the 2024 AGM, has the support of 96.00% and the

FY24Directors’ Remuneration Report at the 2024 AGM received support from shareholders holding 99.42% of the votes cast. There were no material concerns for the Committee to consider

from the AGM voting outcomes. cardfactory continues to work on some of the key themes and outputs from the last bHeard survey (October 2023) and we continue with the CLG which

complements existing forms of employee engagement. It also forms the basis of engagement on those matters specifically required under the Code, including to explain the alignment of the

Executive Directors’ Remuneration Policy to the wider Group. Paul Moody is the Designated Director to lead the Board’s consultation of colleagues via the CLG. Furtherdetails of stakeholder

engagement are set out on pages 56 to 59.

There were no matters arising during the year that required consultation by the Remuneration Committee with shareholders.

Determining Executive Director remuneration

The Committee considers the appropriateness of the Executive Directors’ remuneration, not only in the context of overall business performance and environmental, governance and social

matters, but also in the context of wider workforce pay conditions (taking into account workforce policies and practices as well as the ratio of CEO pay to all-employee pay) and external market

data, to ensure that it is fair and appropriate for the role, experience of the individual, responsibilities and performance delivered.

More specifically the Committee will continue to consider the application of discretion in application of the Directors’ Remuneration Policy to adjust for any excessive returns from general

market changes, and to account for wider stakeholder experience, in particular in respect of the exercise of discretion in respect of bonus and share awards and in setting any new targets

forfuture annual bonus schemes.

Wider workforce matters

The Committee, as part of its wider remit under the Code, considers workforce remuneration policy and practices. This includes our Gender Pay statistics, which are published on our investor

relations website (cardfactoryinvestors.com) and our DE&I strategy (see page 37) and our DE&I policy which is summarised on page 116. The Committee has also considered the Group’s wider

review of remuneration across the entire workforce following an extensive grading of roles and benchmarking of remuneration and benefits associated with each role.

This report was reviewed and approved by the Remuneration Committee on 6 May 2025.

Indira Thambiah

Chair of the Remuneration Committee

7 May 2025

ANNUAL REPORT ON REMUNERATION CONTINUED

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NOMINATION COMMITTEE

CHAIR’S LETTER

The Board will keep all aspects of experience

anddiversity under review.”

Dear Shareholder

Introduction

FY25 has been a year of further progress for

the Nomination Committee, particularly on

succession planning and Board effectiveness

evaluation. The key activities of the

Committee during the period include:

• The externally conducted evaluation

of the Board’s effectiveness (July to

October 2024) culminating in review of

performance against the Board objectives

set in October 2023 and setting new

Board objectives (see page 84).

• Review of the Board’s, the senior

leadership team and their direct report’s

succession planning and actions to

support the future promotion of

internalcandidates.

• Recommendation to the Board of

the appointment of Pam Powell as

Senior Independent Director. Odgers

Berndtson were engaged in 2023 to

support this appointment. Save for prior

appointments of Odgers Berndtson by

the Company for Board appointments,

and appointment of Odgers Berndtson

by boards of companies that each of Pam

Powell and I are Non-Executive Directors,

Odgers Berndtson do not have any other

connections with either the Company

orthe Directors.

• Oversight and engagement on the

sustainability and ESG agenda, in

particular supporting progress on ensuring

cardfactory is a genuine diverse and

inclusive place to work and to review the

progress in improving the culture within

the business (see pages 41 and 59).

At the Company’s 2024 Annual General

Meeting, over 75% of the votes cast supported

my reappointment, however, as more

than 20% of votes cast were against my

reappointment, we launched a consultation

with the 12 largest institutional shareholders,

holding (in aggregate) 60% of the Company’s

issued share capital, in accordance with

Provision 4 of the UK Corporate Governance

Code 2018. All the shareholders who

engaged in this consultation reported that

they supported my reappointment, with no

engagement from any shareholders who

voted against this resolution.

As announced in December 2024, the Board

understood, from prior shareholder feedback,

that the diversity of the Board may have

resulted in some votes being cast against

my reappointment. At the time of reporting

the FY24 results and publication of the FY24

Annual Report and Accounts, the diversity of

the Board fell short of the recommendations

in the Listing Rules.

The Board composition now comprises

33% women, including one in the Senior

Independent Director role.

The Board has re-assessed the skills and

experience of its members and consider

this to be appropriate for the Company’s

operations and strategic objectives. The Board

recognise the diversity of its membership,

across a range of criteria (ofwhich gender and

ethnicity are part) and does not consider it to

be in the interests of shareholders to recruit

an additional director solely to achieve the

40% recommendation. The Board will keep

all aspects of experience and diversity under

review.

Yours sincerely

Paul Moody

Chair

7 May 2025

Paul Moody

Chair of the Nomination Committee

Committee members

Paul Moody (Chair)

Pam Powell

Rob McWilliam

Indira Thambiah

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NOMINATION COMMITTEE REPORT

This report provides details of the role of

the Nomination Committee, the work it has

undertaken during the year and details of

how it intends to carry out its responsibilities

going forward.

Role of the Nomination Committee

The purpose of the Committee is to:

• Assist the Board by keeping the

composition and performance of

the Board and its Committees under

continuous review to ensure it has the

necessary balance of skills and experience

to fulfil its purpose.

• Ensure a thorough and transparent

process is adopted for making new

appointments to the Board.

• Oversee diversity, inclusion and

succession, not only within the

Board but across the Group’s senior

leadershipteam.

A more detailed explanation of the

Nomination Committee’s role, membership,

meeting frequency and Terms of Reference

are set out in the Corporate Governance

Report on page 84.

Committee activity

The Committee’s main activity during the

year, and its plans for the year ahead, are as

described in more detail in the introductory

letter to this report.

DE&I Policy

Our policy is that the Board and the Group’s

senior leadership team should always

be diverse, with selection being made

irrespective of personal attributes, but we

feel that quotas are not appropriate as they

are likely to lead to compromised decisions

on Board and senior leadership team

membership, quality and size.

We will, however, seek to ensure that specific effort is made, both at Board and senior leadership team level, to bring forward female

candidates and those from a range of ethnic and social backgrounds for appointments. We are committed to providing equal opportunities

for all our colleagues and to having a diverse workforce of gender, age, nationality, education and background. We are a founding signatory,

alongside 50 other leading retailers, to the British Retail Consortium’s Diversity & Inclusion Charter. Details of some of our commitments and

progress during the year can be found in the ESG Report from pages 36 to 43 and in respect of our colleague engagement on page 59.

We published our latest Gender Pay Gap Report in May 2025, which reports on the gender pay gap as at 5 April 2024. A copy of the report

hasbeen published on cardfactory’s investor website (cardfactoryinvestors.com).

Our latest data on gender and (for the Board and senior leadership team) ethnicity as at the reference date of 31 January 2025, is as follows:

Gender composition

Number of

Board members

Percentage

of the Board

Number of senior

positions on the Board

(CEO, CFO, SID, Chair)

Number in executive

management

(excl. Board members)

Percentage of

executive management

(excl. Board members)

Men 4 66.6% 3 7 87. 5%

Women 2 33.3% 1 1 12.5%

Ethnic diversity

Number of

Board members

Percentage

of the Board

Number of senior

positions on the Board

(CEO, CFO, SID, Chair)

Number in executive

management

Percentage of

executive

management

White British or other White (including

minority-white groups) 5 83.3% 4 7 87.5%

Mixed/Multiple Ethnic Groups – – – – –

Asian/Asian British 1 16.6% – 1 12.5%

Black/African/Caribbean/Black British – – – – –

Other ethnic group, including Arab – – – – –

Not specified/prefer not to say – – – – –

Of the 45 UK direct reports to the executive leadership team as at 31 January 2025, 53% (24 individuals) are women, 47% (21 individuals) are male.

Of the entire UK and Ireland workforce of 9,266 as at 31 January 2025, 81% (7,490 individuals) are women and 19% (1,776 individuals) are male.

Board evaluation

The Company undertook an externally conducted Board effectiveness evaluation, which concluded in October 2024. Further details are set

out in the Corporate Governance Report on page 84. Board evaluation will continue to be conducted on an annual basis, with an externally

facilitated evaluation scheduled to be completed during the financial year to 31 January 2028.

Tenure and re-election of Directors

In accordance with the UK Corporate Governance Code, all the Directors will seek election or re-election (as appropriate) at the next AGM

on19June 2025.

Paul Moody

Chair of the Nomination Committee

7 May 2025

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Company Information

DIRECTORS’ REPORT

The Directors present their

report together with the audited

Financial Statements for the year

ended 31 January 2025.

Introduction

This section of the Annual Report & Accounts

includes additional information required

to be disclosed under the Companies Act

2006 (‘the Companies Act’), the UK Corporate

Governance Code 2018 (the ‘Code’ or the ‘UK

Corporate Governance Code’), the Disclosure

Guidance and Transparency Rules (the ‘DTRs’)

and the Listing Rules (the ‘Listing Rules’) of the

Financial Conduct Authority.

Some of the information we are required to

include in the Directors’ Report is included

in other sections of this Annual Report and

Accounts and is referred to below. Where

reference is made to these other sections, they

are incorporated into this report by reference.

Incorporation, listing and structure

The Company was incorporated and

registered in England and Wales on 17April

2014 under the Companies Act with

registration number 9002747.

The entire issued ordinary share capital of the

Company is admitted to the Official List of the

Financial Conduct Authority and to trading on

the London Stock Exchange main market for

listed securities. The liability of the members

of the Company is limited.

The Company is domiciled in the United

Kingdom and its registered office is at Century

House, Brunel Road, Wakefield 41 Industrial

Estate, Wakefield, West Yorkshire, WF2 0XG.

The telephone number of the Company’s

registered office is +44 1924 839150.

The Company indirectly owns subsidiaries

incorporated overseas. See note 4 to the

Company Financial Statements on page 166.

Strategic Report

The Strategic Report, which was approved

by the Board on 6 May 2025 and is set out

on pages 1 to 74, contains a fair review of

the Group’s business, a description of the

emerging and principal risks and uncertainties

facing the Group and an indication of the

likely future developments of the Group.

The review is intended to be a balanced and

comprehensive analysis of the development

and performance of the Group’s business

during the financial year and the position

of the Group’s business at the end of that

year. The report includes, to the extent

necessary for an understanding of the

development, performance or position of the

Group’s business, analysis using financial key

performance indicators.

The Strategic Report also includes the main

trends and factors likely to affect the future

development, performance and position

of the Group’s business. It also includes

information about environmental matters

(including reporting in accordance with the

Task Force on Climate-Related Financial

Disclosures (TCFD)), the Group’s employees,

social and community issues and (on pages

56 to 59) details of how we engage with

suppliers, customers and other stakeholders.

This Directors’ Report should be read in

conjunction with the Strategic Report, which

also contains details of the principal activities

of the Group during the year. When taken

together, the Strategic Report and this

Directors’ Report constitute the management

report for the purposes of DTR 4.1.8 R.

Results and dividends

The consolidated profit for the Group for the

year after taxation was £47.8 million (FY24:

£49.5 million). The results are discussed in

greater detail in the CFO’s pages 60 to 68.

The Directors propose a final dividend of

3.6 pence per share in respect of the period

ended 31 January 2025, to be paid on 27

June 2025 to shareholders on the register

on the record date of 30 May 2025, subject

to shareholder approval at the AGM to be

held on 19 June 2025 (FY24 final dividend: 4.5

pence). An interim dividend of 1.2 pence was

paid on 11 December 2024 to members on

the register a 1 November 2024 in respect of

the period ended 31 January 2025 (FY24: nil).

Post year-end events

There have been no significant post year-end

events.

Share capital, shareholders and

restrictions on transfers of shares

The Company has only one class of shares:

ordinary shares of 1 pence each.

Further details of the Company’s share

capital, including changes in the issued share

capital in the year under review, are set out

in note 19 to the Financial Statements which

form part of this report on page 154. Since

the end of the FY25 financial year, to 6 May

2025 (being the latest practicable date prior

to publication of this report), the Company

issued 22,778 shares to satisfy awards

granted and vesting under the Company’s

SAYE plan. Save for this issue, no additional

shares have been issued between the end of

the financial year under review and the date

of approval of this Report. The total issued

share capital of the Company as at 6 May

2025 (being the latest practical date before

publication of this report) is 348,027,494. No

shares are held in treasury.

Details of awards outstanding under share-

based incentive schemes are given in note

25 to the Financial Statements which form

part of this report on page 160. Details of

the share-based incentive schemes in place

are provided in the Directors’ Remuneration

Report on page 96. Awards granted under the

share-based incentive schemes are generally

satisfied on vesting or exercise by the

allotment of new shares.

The rights and obligations attaching to the

ordinary share capital of the Company are

contained within the Company’s Articles

of Association (‘Articles’) which were

adopted on 28 July 2021. The Articles are

accessible from Companies House and the

cardfactoryinvestors.com website.

The Articles do not contain any restrictions

on the transfer of ordinary shares in the

Company other than the usual restrictions

applicable where any amount is unpaid on a

share. Certain restrictions are also imposed

by laws and regulations (such as insider

trading and marketing requirements) and

requirements of the Listing Rules whereby

Directors and certain employees of the

Company require approval of the Company in

order to deal in the Company’s shares.

Shareholder and voting rights

All members who hold ordinary shares are

entitled to attend and vote at the AGM. On

a show of hands at a general meeting every

member present in person shall have one

vote and on a poll every member present in

person or by proxy shall have one vote for

every ordinary share held. No shareholder

holds ordinary shares carrying special rights

relating to the control of the Company.

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Card Factory plc Annual Report and Accounts 2025

Substantial shareholders

At 6 May 2025 the following had notified the Company on form TR1 of a disclosable interest of

3% or more of the nominal value of the Company’s ordinary shares:

Shareholder

No. of

ordinary shares

Percentage

of issued

share capital

Artemis Investment Management LLP 29,731,077 8.54%

BBFIT Investments Pte Ltd 28,347,748 8.15%

Aberforth Partners LLP 22,753,964 6.54%

JP Morgan Asset Management 18,650,368 5.36%

Majedie Asset Management Limited 16,819,832 4.83%

The Wellcome Trust 14,187,012 4.08%

Norges Bank 11,027,565 3.17%

Jupiter Asset Management 10,950,000 3.15%

As at 31 January 2025, the Company’s substantial shareholders were as reported above, save

for the notification from Norges Bank, which was received on 28 March 2025. Prior to this

notification, Norges Bank’s interest was below 3%.

Change of control

There are no agreements between the Company and its Directors or employees providing

for additional compensation for loss of office or employment (whether through resignation,

redundancy or otherwise) that occurs because of a takeover bid. The only significant

agreement to which the Company is a party that takes effect, alters or terminates upon a

change of control of the Company following a takeover bid, and the effect thereof, is the

Company’s committed bank facilities dated 26 April 2024 which contain a provision such that,

in the event of a change of control, the facilities may be cancelled and all outstanding amounts,

together with accrued interest, will become repayable on the date falling 30 days following

written notice being given by the lenders that the facility has been cancelled.

Transactions with related parties

The only material transactions with related parties during the year were those transactions

detailed in note 28 on page 161 of the Annual Report and Accounts.

Directors

The Directors of the Company and their biographies are set out on pages 78 and 79. Details

of changes to the Board during the period are set out on page 80. Details of how Directors are

appointed and/or removed are set out in the Corporate Governance Report on page 85.

Powers of Directors

Specific powers of the Directors in relation

to shares and the Company’s Articles of

Association are referred to in the Corporate

Governance Report on page 85. As at

31 January 2025, the Directors had

shareholder authority, granted at the

AGM in 2024, to effect a purchase by the

Company of up to 34,564,461 of its own

shares. None of this authority had been

used. This authority is proposed to be

renewed at the AGM to be held in 2025.

Directors’ indemnities and insurance

Information relating to Directors’ indemnities

and the Directors’ and Officers’ liability

insurance that the Company has purchased is

set out in the Corporate Governance Report

on page 85.

Employees

Information relating to employees of the

Group, including the colleague listening

group and employee forums which facilitate

understanding colleague views in decision

making, is set out on pages 59 and 83. Share

incentive schemes in which employees

participate are described in the Directors’

Remuneration Report on page 96 and in note

25 to the Financial Statements on page 160.

We recognise that a diverse workforce is

important to our culture and this includes

the employment of disabled persons.

Full and fair consideration is given to

applications from disabled persons and

support is available for colleagues who have

become disabled during their employment.

Our approach is non-discriminatory and

proactive. At any point during the colleague

lifecycle from recruitment through job

changes or promotions and with training and

development opportunities we will support

disabled colleagues by making adjustments to

accommodate their requirements and would

seek professional occupational health advice

when required. We have a broad offering

of wellbeing support including an employee

assistance programme and a mental health

first aiders network. We encourage any

colleague with a disability to talk to their

manager or to get support from the People

Team to ensure that they can successfully

balance a health condition with work.

Getting a job at cardfactory and access to

training and career development is based

on merit and we would not consider any

protected characteristic as a barrier to

recruitment or progression. For more

information on our approach to disability

in the workplace see pages 41 and 59.

Greenhouse gas emissions

The TCFD Report on pages 44 to 55 sets out

the greenhouse gas emissions disclosures.

Political donations

The Group has not made any political

donations in the past and does not intend to

make any in the future.

Treasury and risk management

and financial instruments

The Group’s approach to treasury and

financial risk management is explained in note

23 to the accounts on pages 156 to 158. These

risks are managed in accordance with the risk

management framework described on pages

69 to 73, which includes a list of the principal

risks and uncertainties that affect or are likely

to affect the Group. The financial position of

the Group, its cash flow, liquidity position and

borrowing facilities are described in the CFO’s

review on page 67.

Tax

The Group pays corporation tax on its

operations in the United Kingdom and does

not operate in any tax havens or use any tax

avoidance schemes. A copy of the Group’s tax

strategy is available on cardfactory’s investor

website (cardfactoryinvestors.com).

DIRECTORS’ REPORT CONTINUED

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Company Information

Disclosures required under Listing Rule 6.6 R

In accordance with Listing Rule 6.6.4R, the information required to be disclosed in the Annual

Report by Listing Rule 6.6.1 R is detailed in the following sections:

Disclosure Cross reference

Amount of interest capitalised by the Group

during FY25 and the amount and treatment

of any related tax relief. R1

Not Applicable

Any information required by Listing Rule

6.2.23 R (publication of unaudited financial

information). R2

Not Applicable

Details of any long-term incentive schemes

required by Listing Rule 9.3.3 R. R3

Page 96

Details of any arrangements under which

any Director has waived or agreed to waive

any emoluments for FY25 or any future

emoluments. R4 R5

Page 111

Details of cash allotments of shares by

Card Factory plc or any major subsidiary

undertaking, during FY25. R6 R7

See note 7 to the notes to the Parent

Company Financial Statements on page 167

Details of any subscription for shares by

Card Factory plc in a placing of shares during

FY25. R8

Not Applicable

Details of any contract of significance in

which a Director or controlling shareholder

is materially interested, subsisting during

FY25. R9

Not Applicable

Details of any contract for the provision

of services to the Group by a controlling

shareholder subsisting during FY25. R10

Not Applicable

Details of any arrangement under which a

shareholder has waived or agreed to waive

any dividends. R11, R12

Not Applicable

A statement by the Board in respect of any

agreement with a controlling shareholder.

R13(a)

Not Applicable

Disclosure required under

Disclosure Guidance and

Transparency Rule7 (Corporate

Governance)

The Corporate Governance Report on pages

80 to 86 contains disclosures required under

Disclosure Guidance and Transparency

Rules 7.2.2, to 7.2.7, which form part of this

Directors’ Report.

Disclosure required under Listing

Rule 6.6.6(8) R

The Company has included climate-related

disclosures consistent with the TCFD

recommendations and recommended

disclosures (dated June 2017) as updated by

the Task Force’s 2021 Annex, on pages 44

to 55 of this Annual Report. The Company’s

compliance statement in respect of TCFD

reporting is set out on pages 44 and 45.

TCFD requirements are not yet fully achieved

in respect of Scope 3 emissions, which is

attributed to recent acquisitions which

will require GHG emissions data to be re-

baselined to take account of emissions from

these businesses. This is expected to be

completed during FY26 and included in the

next annual report and accounts.

Going concern

The Board continues to have a reasonable

expectation that the Group has adequate

resources to continue in operation for

at least the next 12 months and that the

going concern basis of accounting remains

appropriate. More information in respect

of going concern, including the factors

considered in reaching this conclusion,

is provided in note 1 to the Consolidated

Financial Statements on pages 134 to 143.

Longer-term viability

In accordance with the UK Corporate

Governance Code, the Directors have

assessed the viability of the Group over a

period longer than that required in respect

of going concern. The assessment has been

made taking into account the Group’s current

position, business plan, and the principal risks

and uncertainties described in the Strategic

Report on pages 71 to 73.

In making this statement, the Board has

carried out a robust assessment of the

emerging and principal risks facing the

Group, including those that would threaten

its business model, future performance,

solvency or liquidity.

Viability period

The Directors have determined that the five

years to 31 January 2030 is an appropriate

period over which to provide its viability

statement, being the timeframe used by

the Board in its strategic planning process

and consistent with the Group’s investment

cycles. Five years would require extension

options in the Group’s newly agreed financing

facilities to be successfully exercised, but the

Board currently has no reason to believe that

the Group’s existing facilities would not be

extended, renewed or replaced on broadly

similar terms at that time.

Board assessment

The Board has reviewed the Group’s detailed

five-year strategic plan (the ‘Plan’), including

an assessment of the key operational and

financial assumptions, and considered

downside scenarios and stress testing.

ThePlan was updated to reflect the positive

trading performance in FY25 and assumes

aconservative model of sales growth across

the five year horizon, and reflects delivery

ofkey strategic projects to support growth in

online and partnerships. In addition, the Plan

includes expected cost headwinds arising, in

particular, from wage inflation, higher national

insurance contributions, lower GBP/USD

exchange rates that may be applicable from

the end of the Group’s existing hedge, and the

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Card Factory plc Annual Report and Accounts 2025

impact of potential future price increases

on freight and utilities. The plan indicates

that the Group will remain profitable, cash

generative and demonstrated that the Group

would have headroom and comply with

covenants equivalent to those set out in our

April 2024 facilities.

In assessing viability, the Board has

considered a variety of downside scenarios

arising from the Group’s principal risks and

uncertainties (see pages 71 to 73). These

downside risks included severe, but plausible,

scenarios with the ability to reduce the

Group’s sales, profitability and cash flow

over sustained periods over half of the year.

Reverse stress test scenarios were also

considered that considered the extent to

which such a scenario would need to persist

or extend in order to result in a breach of our

covenants or liquidity position.

In reviewing this scenario analysis, the

Board noted that the level of headroom

was lower than in previous years due to the

combination of acquisition expenditure and the

recommencement of dividend payments during

FY25; however the extent of scenario required

to result in a breach remained extensive.

Whilst these reviews do not consider all the

possible scenarios that the Group might face,

the Directors consider that this assessment

of the Group’s prospects is reasonable in

light of the particular uncertainties facing

the Group at this time. In particular, the

Directors noted that in all of the scenarios

considered, a reasonable degree of further

mitigating actions would be available to the

Group to mitigate the effects of downside

risks. Such mitigating actions could include

further curtailing of discretionary operating

and capital expenditure or postponement

or cancellation of dividend payments. It was

noted that the Group has successfully taken

significant mitigating actions to preserve

liquidity during the Covid-19 pandemic.

In addition, the Board noted that the Group has further, uncommitted facilities available within its existing financing arrangements and, based

on recent interactions with its current lending syndicate, has no reason to believe that those facilities would not be made available to the Group

if requested. In all cases, considering the extent of mitigating actions potentially available to the Group and the availability of potential further

funding if required, the review concluded that the extent of scenario required to result in a breach was of such severity such that the scenario was

not considered reasonably plausible.

Whilst there continue to be inherent risks and uncertainties in the Group’s wider operating environment, the Board is confident that the Group

continues to have access to sufficient liquidity to meet its liabilities as they fall due and manage reasonably foreseeable downside scenarios if

they should arise. This assessment is based upon the Group’s current financial position and the headroom in the Group’s financing facilities.

Accordingly, the Board confirms that it has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities

as they fall due in the period to 31 January 2030.

Assumption Assumption limitations

Available funding

The strategic plan was developed assuming that the covenants and

headroom under the current facilities available in the 2024 financing

package were consistent throughout the five years.

The key limitation in respect of financing relates to the ability of the

Group to meet its covenant requirements in order to continue to

access available facilities. The Board is satisfied that, under the current

facilities, the Group should have sufficient headroom to meet covenant

requirements across the viability period, including in downside

scenarios. Liquidity and covenant headroom is at its tightest during the

first 12-18 months of the plan, with cash inflows across the five-year

term gradually increasing headroom over time.

Capital investment

The Group’s capital investment plans remain focused on supporting

key strategic initiatives to deliver the Plan. Capital investment was

high relative to prior years as we invest in order to continue to deliver

our overall strategy and grow profit over time. Investment is expected

to remain at approximately £20 million from FY26 and through the

remainder of the plan.

Capital investment is entirely within the control of the Board. Reducing

capital expenditure, if required, reflects a key mitigation in severe

downside scenarios.

Strategic initiatives

The Plan reflects the Group’s strategic initiatives and assumes gradual

revenue growth across the five-year term.

The Board undertakes a full review of principal risks, uncertainties

and downside scenarios taking into account the impact of the Group’s

ability to deliver its strategy are reviewed

Distributions to shareholders

The Board has assessed cash flow forecasts, the availability of

financing and the Group’s plans to return surplus cash to shareholders

in its strategic plan. A final dividend of 4.5 pence per share was paid

in respect of the year ended 31 January 2024 and a final dividend of

3.6 pence is proposed for the year ended 31 January 2025 subject to

shareholders’ approval at the AGM on 19 June 2025 and is to be paid

on 27 June 2025 to shareholders on the register on the record date

of 30 May 2025 (See pages 67 and 68 for more information regarding

future distribution expectations).

Capital management is entirely within the control of the Board and

accordingly there are no limitations to these assumptions. The Group’s

Capital Allocation Policy requires that the Board balances investment

and returns against protecting the balance sheet.

DIRECTORS’ REPORT CONTINUED

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Company Information

Disclosure of information and

appointment of auditors

So far as each Director is aware, there is

no relevant audit information of which the

Company’s auditor is unaware and the

Directors have taken all the steps which

they ought to have taken as Directors to

make themselves aware of any relevant

audit information and to establish that

the Company’s auditor is aware of that

information.

This confirmation is given and should be

interpreted in accordance with the provisions

of Section 418 of the Companies Act.

On behalf of the Board, the Audit & Risk

Committee has reviewed the effectiveness,

performance, independence and objectivity

of the existing external auditor, Forvis Mazars

LLP, for the year ended 31 January 2024 and

concluded that the external auditor was in all

respects effective, as explained on page 90.

The Company first appointed Forvis Mazars

LLP on June 2023 as its auditor following

a competitive tender undertaken in 2022

resulting in Forvis Mazars LLP first audit being

the audit of the accounts for the 12 months

to 31 January 2024. Forvis Mazars LLP has

expressed its willingness to be re-appointed

as auditor. Accordingly, and in accordance

with Section 489 of the Companies Act,

resolutions to re-appoint Forvis Mazars LLP

as auditor and to authorise the Directors to

determine its remuneration will be proposed

at the forthcoming AGM of the Company.

Information regarding forward-

looking statements

The reports and Financial Statements contained

in this Annual Report and Accounts contain

certain forward-looking statements with

respect to the financial condition, results of

operations and businesses of Card Factory

plc. These statements and forecasts involve

risk, uncertainty and assumptions because

they relate to events and depend upon

circumstances that will occur in the future.

There are a number of factors that could

cause actual results or developments to differ

materially from those expressed or implied by

these forward-looking statements and forecasts.

Nothing in this Annual Report and Accounts

should be construed as a profit forecast.

AGM

The AGM of the Company will be held at

11.00am on 19 June 2025 at the Company’s

registered office at Century House, Brunel

Road, Wakefield 41 Industrial Estate, Wakefield

WF2 0XG. A formal notice of meeting,

explanatory circular and a form of proxy will

accompany this Annual Report and Accounts.

Shareholders are encouraged to submit their

questions in advance and to submit their votes

by proxy in accordance with the instructions in

the enclosed documents.

Approval of the Annual Report

The Strategic Report and the Corporate

Governance Report were approved by the

Board on 6 May 2025.

Ciaran Stone

Company Secretary

7 May 2025

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Card Factory plc Annual Report and Accounts 2025

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for preparing

the Annual Report and the Group and Parent

Company Financial Statements in accordance

with applicable law and regulations.

Company law requires the Directors to

prepare Group and Parent Company Financial

Statements for each financial year. Under that

law they are required to prepare the Group

Financial Statements in accordance with UK-

adopted international accounting standards

and applicable law and have elected to

prepare the Parent Company Financial

Statements on the same basis.

Under company law the Directors must not

approve the Financial Statements unless they

are satisfied that they give a true and fair view

of the state of affairs of the Group and Parent

Company and of the Group’s profit or loss for

that period. In preparing each of the Group

and Parent Company Financial Statements,

the Directors are required to:

• select suitable accounting policies and

then apply them consistently;

• make judgements and estimates that are

reasonable, relevant and reliable;

• state whether they have been prepared in

accordance with UK-adopted international

accounting standards;

• assess the Group and Parent Company’s

ability to continue as a going concern,

disclosing, as applicable, matters related

to going concern; and

• use the going concern basis of accounting

unless they either intend to liquidate the

Group or the Parent Company or to cease

operations or have no realistic alternative

but to do so.

The Directors are responsible for keeping

adequate accounting records that are

sufficient to show and explain the Parent

Company’s transactions and disclose with

reasonable accuracy at any time the financial

position of the Parent Company and enable

them to ensure that its Financial Statements

comply with the Companies Act 2006. They

are responsible for such internal control as

they determine is necessary to enable the

preparation of financial statements that are

free from material misstatement, whether

due to fraud or error, and have general

responsibility for taking such steps as are

reasonably open to them to safeguard the

assets of the Group and to prevent and detect

fraud and other irregularities.

Under applicable law and regulations, the

Directors are also responsible for preparing a

Strategic Report, Directors’ Report, Directors’

Remuneration Report and Corporate

Governance Statement that complies with

that law and those regulations.

The Directors are responsible for the

maintenance and integrity of the corporate

and financial information included on the

Company’s website. Legislation in the UK

governing the preparation and dissemination

of financial statements may differ from

legislation in other jurisdictions.

In accordance with Disclosure Guidance

and Transparency Rules 4.1.15 R to 4.1.18

R the Financial Statements will form part of

the annual financial report prepared using

the single electronic reporting format. The

auditor’s report on these Financial Statements

provides no assurance over the ESEF format.

Responsibility statement of the

Directors in respect of the Annual

Report and Accounts

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.

By order of the Board

Darcy Willson-Rymer

Chief Executive Officer

7 May 2025

Matthias Seeger

Chief Financial Officer

7 May 2025

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Financial

Statements

Strategic Report Governance Financial Statements

123

Company Information

Financial Statements

124 Independent auditor’s report

131 Consolidated income statement

131 Consolidated statement of

comprehensive income

132 Consolidated statement of

financial position

133 Consolidated statement of changes

in equity

134 Consolidated cash flow statement

134 Notes to the financial statements

163 Parent Company statement of

financial position

163 Parent Company statement of

changes in equity

164 Parent Company cash flow statement

164 Notes to the Parent Company financial

statements

Company Information

169 Glossary

IBC Advisers and contacts

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Card Factory plc Annual Report and Accounts 2025

INDEPENDENT AUDITOR’S REPORT

Opinion

We have audited the financial statements of Card Factory plc (the ‘parent company’) and

its subsidiaries (the ‘group’) for the year ended 31st January 2025 which comprise the

Consolidated income statement, Consolidated statement of comprehensive income,

Consolidated statement of financial position, Consolidated statement of changes in

equity, Consolidated cash flow statement, Parent company statement of financial position,

Parentcompany statement of changes in equity, Parent company cash flow statement and

notes tothe financial statements, including material accounting policy information.

The financial reporting framework that has been applied in their preparation is applicable

law and UK-adopted international accounting standards and, as regards the parent company

financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion, the financial statements:

• give a true and fair view of the state of the group’s and of the parent company’s affairs

as at 31st January 2025 and of the group’s profit for the year then ended;

• have been properly prepared in accordance with UK-adopted international accounting

standards and, as regards the parent company financial statements, as applied in

accordance with the provisions of the Companies Act 2006; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs

(UK)) and applicable law. Our responsibilities under those standards are further described in

the “Auditor’s responsibilities for the audit of the financial statements” section of our report.

We are independent of the group and the parent company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including

the FRC’s Ethical Standard as applied to listed entities and public interest entities and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We believe

that the audit evidence we have obtained is sufficient and appropriate to provide a basis

forour opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going

concern basis of accounting in the preparation of the financial statements is appropriate.

Our audit procedures to evaluate the directors’ assessment of the group’s and the parent

company’s ability to continue to adopt the going concern basis of accounting included but

were not limited to:

• Undertaking an initial assessment at the planning stage of the audit to identify events or

conditions that may cast significant doubt on the group’s and the parent company’s ability

to continue as a going concern.

• Obtaining an understanding of the relevant controls relating to the directors’ going

concern assessment.

• Making enquiries of the directors to understand the period of assessment considered by

them, the assumptions they considered and the implication of those when assessing the

group’s and the parent company’s future financial performance.

• Challenging the appropriateness of the directors’ key assumptions in their cash flow

forecasts, as described in note 1, by seeking both supporting and disconfirming evidence

in relation to these key assumptions and assessing the directors’ consideration of

severe but plausible scenarios. We have challenged reverse stress tests performed by

management, including assessing the impact on covenant compliance in such scenarios

and assessed the viability of mitigating actions within the directors’ control.

• Testing the accuracy and functionality of the model used to prepare the

directors’forecasts.

• Assessing the historical accuracy of forecasts prepared by the directors.

• Considering the consistency of the directors’ forecasts with other areas of the financial

statements and our audit; and

• Evaluating the appropriateness of the directors’ disclosures in the financial statements

ongoing concern.

Based on the work we have performed, we have not identified any material uncertainties

relating to events or conditions that, individually or collectively, may cast significant doubt

onthe group’s and the parent company’s ability to continue as a going concern for a period

ofat least twelve months from when the financial statements are authorised for issue.

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Company Information

Our responsibilities and the responsibilities of the directors with respect to going concern are

described in the relevant sections of this report.

In relation to Card Factory plc’s reporting on how it has applied the UK Corporate Governance

Code, we have nothing material to add or draw attention to in relation to the directors’

statement in the financial statements about whether the director’s considered it appropriate

to adopt the going concern basis of accounting.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most

significance in our audit of the financial statements of the current period and include the most

significant assessed risks of material misstatement (whether or not due to fraud) we identified,

including those which had the greatest effect on: the overall audit strategy; the allocation of

resources in the audit; and directing the efforts of the engagement team. These matters were

addressed in the context of our audit of the financial statements as a whole, and in forming

our opinion thereon, and we do not provide a separate opinion on these matters.

We summarise below the key audit matters in forming our opinion above, together with an

overview of the principal audit procedures performed to address each matter and our key

observations arising from those procedures.

These matters, together with our findings, were communicated to those charged with

governance through our Audit Completion Report.

Key audit matter How our scope addressed this matter

Store inventory completeness and existence

Refer to page 141 (accounting policy),

andpage152 financial disclosures.

We have identified a significant risk over

the existence of store inventory due tothe

level of manual processing involved to

determine the inventory quantities held at

the year-end.

Stores do not have a full stock loop process

and store inventory quantities held at

the year-end are determined by year end

physical counts which rely on manual count

procedures. The high volume and large

range of inventory inherently increases the

likelihood of error.

Based on our assessment of the inherent

risk and the audit effort that was required

toobtain sufficient and appropriate

evidence over the balance at the year

end, we have determined store inventory

completeness and existence to be a Key

Audit Matter.

Our audit procedures included but were not

limited to:

• Testing the design and implementation

of key controls related to this business

process.

• Performing independent inventory

counts for a selection of stores.

Wetraced the results of the inventory

counts we attended through to the

accounting system. In performing these

counts, weincorporated unpredictability

regarding the location of the

storesvisited.

• Performing independent counts over

seasonal inventory counts pre and post

year end and performing roll back and

roll forwardprocedures.

• Where management counts were

performed on a date other than the

year end, testing management’s

reconciliation of their count results to the

year-end quantities by recalculating the

mathematical accuracy of this analysis

and agreeing the movement including

sales and receipts to the stores to

supporting evidence.

• Performing risk assessment procedures

to identify unusual movements and

trends in inventory values.

Our observations

The results of our procedures were satisfactory.

Control recommendations relevant to store

inventory counts were communicated to the

Audit and Risk Committee.

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Key audit matter How our scope addressed this matter

Inventory valuation

Refer to page 135 (key sources of estimation

uncertainty, 141 (accounting policy), and

page152 financial disclosures.

The Group has significant levels of inventory

and management exercise judgement

to estimate the value of stock that is

considered slow moving or discontinued,

and the required provision per the

requirements of IAS 2 – Inventories. We have

identified a risk of fraud relating to inventory

valuation estimates.

The determination of the Net Realisable

Value (‘NRV’) of inventory has a high degree

of estimation uncertainty and there is an

increased risk of fraud and error due to the

manual nature of the process.

Based on these factors we have determined

this is a Key Audit Matter.

Our audit procedures included but were not

limited to:

• Assessing the appropriateness of the

Group’s inventory provisioning policies

based on our understanding of the

business.

• Testing the design and implementation

of key controls related to inventory

valuation.

• Comparing sales data in the period to

the stock quantities recorded at year

end to assess whether slow moving

stock lines, and discontinued inventories,

were appropriately considered in the

provisioning methodology.

• Challenging management on stock write

off and destruction rates to verify that

stock was sold below net realisable value

or destroyed.

• Re-calculating provision rates applied

to each stock line using historical sell-

through data.

• Challenging management on the

extent to which historical sales

are representative of future sale

expectations, comparing this to

qualitative assessments of future stock

retention and sale strategy.

• Inspecting a sample of stock lines

in each category to validate that

the determination of category was

appropriate.

• Performing sensitivity analysis to

determine the impact of alternative

assumptions on inventory valuation.

Our observations

The results of our procedures were satisfactory.

Control recommendations relevant to

inventory provisioning were communicated

to the Audit and Risk Committee.

Key audit matter How our scope addressed this matter

Recoverability of parent company’s

investment in subsidiary

Refer to page 164 (accounting policy), and page

166 financial disclosures.

The parent company holds a material

investment in subsidiaries of £316.2m at

31January 2025.

There is a risk of error relating to the

identification of impairment triggers,

and the judgement required when

assessing for impairment. There is a risk

of material misstatement of asset values

if management’s assessment does not

accurately consider potential triggers.

We have identified recoverability of parent

company’s investment in subsidiaries as

a Key Audit Matter. This is based on the

quantum of this balance relative to the

parent company Statement of financial

position (99% of total assets).

Our audit procedures included, but were not

limited to:

• Testing the design and implementation

of key controls related to this business

process.

• Inspecting and challenging management’s

impairment trigger assessment

including but not limited to the following

procedures:

• Inspecting of the carrying value

with specific reference to market

capitalisation.

• Considering other internal and external

triggers per IAS 36 Impairment of Assets.

Our observations

The results of our procedures were

satisfactory with no matters to report to the

Audit and Risk Committee.

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Our application of materiality and an overview of the scope of our audit

The scope of our audit was influenced by our application of materiality. We set certain

quantitative thresholds for materiality. These, together with qualitative considerations,

helped us to determine the scope of our audit and the nature, timing and extent of our audit

procedures on the individual financial statement line items and disclosures and in evaluating

the effect of misstatements, both individually and on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements

as a whole as follows:

Group materiality

Overall materiality £3.2m

How we determined it 5% of Profit Before Tax

Rationale for benchmark

applied

Profit Before Tax is the primary benchmark for Public

Interest Entities. The entity is profit orientated and we have

determined that Profit Before Tax is of principal interest to the

users of the financial statements.

Performance materiality Performance materiality is set to reduce to an appropriately

low level the probability that the aggregate of uncorrected and

undetected misstatements in the financial statements exceeds

materiality for the financial statements as a whole.

We set performance materiality at £2.1m reflecting 65% of

overall materiality.

Reporting threshold We agreed with the directors that we would report to them

misstatements identified during our audit above £0.1m as

well as misstatements below that amount that, inour view,

warranted reporting for qualitativereasons.

Parent company materiality

Overall materiality £1.5m.

How we determined it 0.5% of total assets (capped at component materiality level of

£1.5m).

Rationale for benchmark

applied

Card Factory Plc is a holding entity, and therefore not

profit or revenue focused. Total assets is deemed to be the

most appropriate benchmark for the users of the financial

statements. We have selected 0.5% of Total Assets which is

capped at componentmateriality.

Performance materiality Performance materiality is set to reduce to an appropriately

low level the probability that the aggregate of uncorrected and

undetected misstatements in the financial statements exceeds

materiality for the financial statements as a whole.

We set performance materiality at £0.9m, which represents

60% of overall materiality.

Reporting threshold We agreed with the directors that we would report to them

misstatements identified during our audit above £0.1m as

well as misstatements below that amount that, in our view,

warranted reporting for qualitativereasons.

As part of designing our audit, we assessed the risk of material misstatement in the financial

statements, whether due to fraud or error, and then designed and performed audit

procedures responsive to those risks. In particular, we looked at where the directors made

subjective judgements, such as assumptions on significant accounting estimates.

We tailored the scope of our audit to ensure that we performed sufficient work to be able

to give an opinion on the financial statements as a whole. We used the outputs of our risk

assessment, our understanding of the group and the parent company, their environment,

controls, and critical business processes, to consider qualitative factors to ensure that we

obtained sufficient coverage across all financial statement line items.

Our group audit scope included an audit of the group and the parent company financial

statements. Based on our risk assessment, 6 components, including the parent company were

subject to full scope audit performed by the group audit team, one component was subject

to the audit of one or more balances and/or class of transactions and one component was

subject to Group engagement team instructed procedures by an overseas component auditor

within Forvis Mazars.

The two components not scoped in for full audits were not individually financially significant

enough to require a full scope audit for group purposes, but the group audit risk assessment

identified specific material balances and/or disclosures to be addressed to account for

aggregation risk in the residual population of the audited balances.

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We set out below a summary of the group approach to demonstrate the coverage of group

revenue, profit before tax, and total assets resulting from auditing the components including

the parent company.

Revenue

Profit

before tax

Total

assets

Full scope audit 97% 96% 95%

Audit procedures over one or more account balances

and/or disclosures 1% 1% 4%

Group-engagement team instructed procedures 2% 3% 1%

Out of scope entities contribute in aggregate, less than 1% of all applicable benchmarks.

Component materiality ranges from between £0.1m to £2.1m.

At the parent company level, the group audit team also tested the consolidation process and

carried out analytical procedures to confirm our conclusion that there were no significant risks

of material misstatement of the aggregated financial information.

Other information

The other information comprises the information included in the annual report other than

the financial statements and our auditor’s report thereon. The directors are responsible for

the other information. Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in our report, we do not

express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the

other information is materially inconsistent with the financial statements or our knowledge

obtained in the course of audit or otherwise appears to be materially misstated. If we

identify such material inconsistencies or apparent material misstatements, we are required

to determine whether this gives rise to a material misstatement in the financial statements

themselves. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors’ remuneration report to be audited has been properly

prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors’ report for the financial year

for which the financial statements are prepared is consistent with the financial statements

and those reports have been prepared in accordance with applicable legal requirements;

• the information about internal control and risk management systems in relation to

financial reporting processes and about share capital structures, given in compliance

with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and Transparency Rules sourcebook

made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial

statements and has been prepared in accordance with applicable legal requirements; and

• information about the parent company’s corporate governance code and practices and

about its administrative, management and supervisory bodies and their committees

complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the group and the parent company and

their environment obtained in the course of the audit, we have not identified material

misstatements in the:

• strategic report or the directors’ report; or

• information about internal control and risk management systems in relation to financial

reporting processes and about share capital structures, given in compliance with rules

7.2.5 and 7.2.6 of the FCA Rules.

We have nothing to report in respect of the following matters in relation to which the

Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns

adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements and the part of the directors’ remuneration

report to be audited are not in agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; or

• a corporate governance statement has not been prepared by the parent company.

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Corporate governance statement

The Listing Rules require us to review the directors’ statement in relation to going concern,

longer-term viability and that part of the Corporate Governance Statement relating to

CardFactory plc’s compliance with the provisions of the UK Corporate Governance Statement

specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the

following elements of the Corporate Governance Statement is materially consistent with the

financial statements or our knowledge obtained during the audit:

• Directors’ statement with regards the appropriateness of adopting the going concern basis

of accounting and any material uncertainties identified, set out on page 119;

• Directors’ explanation as to its assessment of the entity’s prospects, the period this

assessment covers and why they period is appropriate, set out on page 119;

• Directors’ statement on fair, balanced and understandable, set out on page 122;

• Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks, set out on page 119;

• The section of the annual report that describes the review of effectiveness of risk

management and internal control systems, set out on page 85; and;

• The section describing the work of the audit committee, set out on page 88.

Responsibilities of Directors

As explained more fully in the directors’ responsibilities statement set out on page 122,

the directors are responsible for the preparation of the financial statements and for being

satisfied that they give a true and fair view, and for such internal control as the directors

determine is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s

and the parent company’s ability to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going concern basis of accounting unless the

directors either intend to liquidate the group or the parent company or to cease operations,

orhave no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as

a whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud

isdetailed below.

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud.

Based on our understanding of the group and the parent company and their industry,

weconsidered that non-compliance with the following laws and regulations might have

a material effect on the financial statements: employment regulation, health and safety

regulation, anti-money laundering regulation and data protection.

To help us identify instances of non-compliance with these laws and regulations, and in

identifying and assessing the risks of material misstatement in respect to non-compliance,

ourprocedures included, but were not limited to:

• Gaining an understanding of the legal and regulatory framework applicable to the group

and the parent company, the industry in which they operate, and the structure of the

group, and considering the risk of acts by the group and the parent company which were

contrary to the applicable laws and regulations, including fraud;

• Inquiring of the directors, management and, where appropriate, those charged with

governance, as to whether the group and the parent company is in compliance with

laws and regulations, and discussing their policies and procedures regarding compliance

withlaws and regulations;

• Inspecting correspondence with relevant licensing or regulatory authorities;

• Reviewing minutes of directors’ meetings in the year; and

• Discussing amongst the engagement team the laws and regulations listed above,

andremaining alert to any indications of non-compliance.

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We also considered those laws and regulations that have a direct effect on the preparation of

the financial statements, such as tax legislation, pension legislation and the CompaniesAct2006.

In addition, we evaluated the directors’ and management’s incentives and opportunities

for fraudulent manipulation of the financial statements, including the risk of management

override of controls, and determined that the principal risks related to posting manual

journal entries to manipulate financial performance, management bias through judgements

and assumptions in significant accounting estimates, in particular in relation to the estimate

of stock lines that may require writing down to net realisable value, revenue recognition

(which we pinpointed to the occurrence of manual journal entries), and significant one-off or

unusualtransactions.

Our procedures in relation to fraud included but were not limited to:

• Making enquiries of the directors and management on whether they had knowledge

ofany actual, suspected or alleged fraud;

• Gaining an understanding of the internal controls established to mitigate risks related

tofraud;

• Discussing amongst the engagement team the risks of fraud;

• Addressing the risks of fraud through management override of controls by performing

journal entry testing;

• Seeking disconfirming evidence by obtaining external records to assess management

assumptions.

• Incorporating an element of unpredictability in the selection of the nature, timing, and

extent of audit procedures performed.

• Including the use of data analytics to identify outliers in testing performed.

The primary responsibility for the prevention and detection of irregularities, including fraud,

rests with both those charged with governance and management. As with any audit, there

remained a risk of non-detection of irregularities, as these may involve collusion, forgery,

intentional omissions, misrepresentations or the override of internal controls.

The risks of material misstatement that had the greatest effect on our audit are discussed

inthe “Key audit matters” section of this report.

A further description of our responsibilities is available on the Financial Reporting Council’s

website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditor’sreport.

Other matters which we are required to address

Following the recommendation of the Audit and Risk Committee, we were appointed by

the Audit and Risk Committee on 3 May 2023 to audit the financial statements for the year

ending 31January 2024 and subsequent financial periods. The period of total uninterrupted

engagement is2years, covering the years ending 31 January 2024 to 31 January 2025.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the

group or the parent company and we remain independent of the group and the parent

company in conducting our audit.

Our audit opinion is consistent with our additional report to the Audit and Risk Committee.

Use of the audit report

This report is made solely to the company’s members as a body in accordance with Chapter3

of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we

might state to the company’s members those matters we are required to state to them in

an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do

not accept or assume responsibility to anyone other than the company and the company’s

members as a body for our audit work, for this report, or for the opinions we have formed.

As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules,

these financial statements will form part of the electronic reporting format prepared annual

financial report filed on the National Storage Mechanism of the Financial Conduct Authority.

This auditor’s report provides no assurance over whether the annual financial report will be

prepared using the correct electronic reporting format.

Charlene Lancaster (Senior Statutory Auditor)

for and on behalf of Forvis Mazars LLP

Chartered Accountants and Statutory Auditor

One St Peter’s Square

Manchester

M2 3DE

7 May 2025

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CONSOLIDATED INCOME STATEMENT

For the year ended 31 January 2025

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 January 2025

		2025	2024
	Note	£’m	£’m
Revenue	2	542.5	510 . 9
Cost of sales		(3 4 8 .7)	(326 .0)
Gross profit		193 . 8	18 4 . 9
Other operating income	22	–	2.0
Operating expenses	3	(11 4 . 5)	(11 0 . 5)
Operating profit	3	7 9.3	76 . 4
Gain on bargain purchase		–	2.6
Finance income	6	0.2	–
Finance expense	6	(15 . 4)	(13 . 4)
Profit before tax		6 4 .1	65.6
Taxation	7	(16 . 3)	(1 6 .1)
Profit for the year		4 7. 8	49.5
Earnings per share		Pence	Pence
– Basic	9	13 . 8	14 . 4
– Diluted	9	13 .7	14 . 3

All activities relate to continuing operations.

Management assess the underlying performance of the Group based on the adjusted

profit before tax of £66 . 0 million in FY25 (2024: £62.1 million). After tax, this gives adjusted

earnings per share of 14. 3 pence (2024: 13.5 pence). See the glossary on pages 169 to 172

which provide detailed reconciliations for all alternative performance measures.

		2025	2024
		£’m	£’m
Profit for the year		4 7. 8	49.5
Items that may be recycled subsequently into profit
or loss:
Exchange differences on translation of foreign
operations		(0 . 2)	(0. 5)
Cash flow hedges – changes in fair value	24	1. 4	(2 .9)
Cost of hedging reserve – changes in fair value	24	(0 .1)	0 .1
Tax relating to components of other comprehensive income	13	(0. 4)	0 .7
Other comprehensive income for the period, net of income tax		0.7	(2.6)
Total comprehensive income for the period
attributable to equity shareholders of the parent		48. 5	4 6 .9

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 January 2025

		2025	2024
	Note	£’m	£’m
Non-current assets
Intangible assets	10	3 56. 5	3 3 1. 4
Property, plant and equipment	11	48 .7	4 5 .9
Right of use assets	12	11 0 . 2	9 9. 2
Deferred tax assets	13	0.6	1. 2
Derivative financial instruments	24	0.9	0 .6
		516 . 9	478 . 3
Current assets
Inventories	14	61 .1	50.0
Trade and other receivables	15	1 7. 0	11 . 6
Tax receivable		1.7	–
Derivative financial instruments	24	2.4	0 .9
Cash at bank and in hand	16	16 . 5	11. 3
		98 .7	73.8
Total assets		615 .6	552.1
Current liabilities
Borrowings	17	(0 .1)	( 7.1)
Lease liabilities	12	(21. 7)	(2 5 . 3)
Trade and other payables	18	(76 . 8)	(8 0 .1)
Provisions	22	(5 . 4)	(7. 5)
Tax payable		–	(0.4)
Derivative financial instruments	24	(0 . 3)	(1.7)
		(1 04.3)	(1 2 2 .1)

		2025	2024
	Note	£’m	£’m
Non-current liabilities
Borrowings	17	(7 3. 9)	(3 7. 9)
Lease liabilities	12	(88 .7)	(75. 5)
Deferred tax liabilities	13	(1. 4)	–
Derivative financial instruments	24	(0 . 4)	(0. 8)
		(16 4 . 4)	(114 . 2)
Total liabilities		(26 8 .7)	(2 3 6 . 3)
Net assets		346.9	3 15 . 8
Equity
Share capital	19	3.5	3. 5
Share premium	19	203. 2	2 02 .7
Hedging reserve		1.0	(0.6)
Cost of hedging reserve		(0 .1)	–
Reverse acquisition reserve		(0 . 5)	(0.5)
Merger reserve		2.7	2 .7
Translation reserve		(0 .6)	(0.4)
Retained earnings		1 3 7. 7	10 8 . 4
Equity attributable to equity holders of the parent		346.9	3 15 . 8

The Financial Statements on pages 131 to 162 were approved by the Board of Directors on

7 May 2025 and were signed on its behalf by

Matthias Seeger

Chief Financial Officer

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Company Information

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 January 2025

					Reverse
				Cost of hedging	acquisition		Translation	Retained
	Share capital	Share premium	Hedging reserve	reserve	reserve	Merger reserve	reserve	earnings	Total equity
	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m
At 31 January 2023	3.4	202. 2	3.5	(0 .1)	(0.5)	2.7	0 .1	5 6 .9	26 8 . 2
Total comprehensive income for the period
Profit or loss	–	–	–	–	–	–	–	49. 5	49. 5
Other comprehensive income	–	–	(2 . 2)	0 .1	–	–	(0 .5)	0 .1	(2.5)
	–	–	(2 . 2)	0 .1	–	–	(0. 5)	49.6	4 7. 0
Hedging (losses) and costs of hedging transferred to the cost of inventory	–	–	(2.5)	–	–	–	–	–	(2. 5)
Deferred tax on transfers to inventory	–	–	0 .6	–	–	–	–	–	0.6
Deferred tax related to Share-based payments	–	–	–	–	–	–	–	(0 . 2)	(0. 2)
Transactions with owners, recorded directly in equity
Shares issued (note 19)	0 .1	0.5	–	–	–	–	–	–	0.6
Share-based payment charges (note 25)	–	–	–	–	–	–	–	2 .1	2 .1
Dividends (note 8)	–	–	–	–	–	–	–	–	–
Total contributions by and distributions to owners	0 .1	0.5	–	–	–	–	–	2 .1	2.7
At 31 January 2024	3.5	2 0 2 .7	(0 .6)	–	(0 . 5)	2 .7	(0. 4)	10 8 . 4	3 15 . 8
Total comprehensive income for the period
Profit or loss	–	–	–	–	–	–	–	4 7. 8	4 7. 8
Other comprehensive income	–	–	1. 4	(0 .1)	–	–	(0 . 2)	(0. 4)	0 .7
	–	–	1. 4	(0 .1)	–	–	(0 . 2)	4 7. 4	48 .5
Hedging gains and costs of hedging transferred to the cost of inventory	–	–	0.2	–	–	–	–	–	0.2
Deferred tax related to Share-based payments	–	–	–	–	–	–	–	(0 .1)	(0 .1)
Transactions with owners, recorded directly in equity
Shares issued (note 19)	–	0. 5	–	–	–	–	–	–	0.5
Share-based payment charges (note 25)	–	–	–	–	–	–	–	2.3	2.3
Dividends (note 8) 1	–	–	–	–	–	–	–	(20.3)	(20.3)
Total contributions by and distributions to owners	–	0. 5	–	–	–	–	–	(18 .0)	(1 7. 5)
At 31 January 2025	3.5	203.2	1. 0	(0 .1)	(0 . 5)	2 .7	(0.6)	1 3 7. 7	346 .9

Dividends include £0.5 million of dividend equivalents payable on employee share awards.

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CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 January 2025

		2025	2024
	Note	£’m	£’m
Cash from operations	20	10 5 .6	11 8 . 7
Corporation tax paid		(16 . 7)	(13 . 5)
Net cash inflow from operating activities		88.9	10 5 . 2
Cash flows from investing activities
Interest received on bank deposits	6	0.2	–
Purchase of property, plant and equipment	11	(11 . 4)	(18 . 8)
Purchase of intangible assets	10	(7. 0)	(9. 0)
Acquisition of subsidiaries net of cash acquired	29	(22.5)	(2 . 2)
Proceeds from disposal of fixed assets		0.2	–
Net cash outflow from investing activities		(40.5)	(3 0. 0)
Cash flows from financing activities
Interest paid on bank borrowings	6	(6 . 4)	(6 . 5)
Proceeds from bank borrowings	21	258 . 5	16 7. 0
Repayment of bank borrowings	21	(22 8 . 5)	(19 0 . 6)
Other financing costs paid		(1.6)	–
Shares issued under employee share schemes	25	0.5	0.6
Payment of lease liabilities	21	(37 .6)	(3 7. 5)
Interest paid in respect of lease liabilities	21	(8 .0)	(6 . 2)
Dividends paid	8	(19.8)	–
Net cash outflow from financing activities		(4 2 . 9)	(7 3 . 2)
Impact of changes in foreign exchange rates		(0 .1)	(0 .8)
Net increase in cash and cash equivalents		5.4	1. 2
Cash and cash equivalents at the beginning of the year		11 .1	9 .9
Closing cash and cash equivalents	16	16 . 5	11 . 1

NOTES TO THE FINANCIAL STATEMENTS

1 Accounting policies

General information

Card Factory plc (the ‘Company’) is a public limited company incorporated in the United

Kingdom. The Company is domiciled in the United Kingdom and its registered office is Century

House, Brunel Road, Wakefield 41 Industrial Estate, Wakefield WF2 0XG.

These Consolidated Financial Statements consolidate the financial statements of the Company

and its subsidiaries (together referred to as the ‘Group’). A full list of the Group’s subsidiaries is

provided in note 4 to the Parent Company accounts.

The principal activities of the Group and the nature of the Group’s operations are as a

vertically integrated, omnichannel retailer and wholesaler of cards, gifts and celebration

essentials.

These Financial Statements are presented in Sterling, which is also the Company’s functional

currency, and are rounded to the nearest million. Foreign operations are included in

accordance with the policies set out within this note.

Throughout these Financial Statements, references to ‘FY25’ refer to the financial year ended

31 January 2025, and references to ‘FY24’ refer to the financial year ended 31 January 2024.

Basis of preparation

These Financial Statements have been prepared in accordance with UK-adopted International

Accounting Standards (‘UK IFRS’), applicable law and with the requirements of the Companies

Act 2006.

The Financial Statements have been prepared on a going concern basis. In adopting the going

concern basis, the Board has considered the financial position of the Group, its cash flows,

liquidity position and borrowing facilities as set out in more detail below.

The Financial Statements have been prepared under the historical cost convention, except

for certain assets and liabilities that are measured at fair value (including derivative financial

instruments and assets and liabilities valued as part of acquisition accounting under IFRS 3

(see note 29)).

Accounting judgements and estimates

The preparation of financial statements in conformity with UK IFRS requires judgement to

be applied in forming the Group’s accounting policies. It also requires the use of estimates

and assumptions that affect the reported amount of assets, liabilities, income and expenses.

Actual results may subsequently differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

estimates are recognised prospectively in the period in which the estimate is revised.

Judgements are also reviewed on an ongoing basis to ensure they remain appropriate. The

Group does not consider there to be any key judgements made in the current period that have

had a significant material effect on the amounts recognised in the Financial Statements.

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Company Information

1 Accounting policies continued

Key sources of estimation uncertainty

The key sources of estimation uncertainty, being those estimates and assumptions that carry

the most significant risk of a material adjustment to the carrying amounts of assets and

liabilities in the next financial year, are set out below.

Inventory provisioning

The Group holds significant volumes, and a broad range of inventory. The Group calculates

an inventory provision to cover the risk that the net realisable value of inventory is lower than

its cost. This provision is calculated in accordance with an established, documented policy,

that is based on historical experience and the Group’s inventory management strategy, which

determines the range of product that will be available for sale in-store and online. Provisions

are made against inventory that is no longer on the Group’s merchandising plan, is expected

to be removed from that plan in the near future, or where certain ranges do not perform as

anticipated. The amounts provided are calculated by product line and are adjusted annually

to reflect experience.

In FY25, the Group applied a consistent policy with prior year and, in accordance with that

policy, updated the judgement over categorisation of, and provision rates applied to, inventory

informed by the latest available sell-through data. These changes are not considered to have

had a significant impact on the overall value of the provision, although have contributed to

the reduction in the value of the provision compared to the prior year due to improving sell-

through rates across all categories of inventory.

At the end of FY25, the total inventory provision was £8.2 million (FY24: £9.5 million). The

reduction in the value of the provision year-on-year generally reflects an improvement in

our inventory sell through rate observed in FY25. As a result, the overall proportion of gross

inventory provided for reduced compared to the prior year.

The full range of reasonably possible outcomes in respect of the provision is difficult to

calculate at the balance sheet date as it is dependent on the accuracy of forecasts for sales

volumes and future decisions we may take on aged, discontinued and potentially excess

inventory in response to market and supply developments. The Group believes it has taken

a balanced approach in determining the provision. It has considered the nature of the

estimates involved and has concluded that it is possible, on the basis of existing knowledge,

that outcomes within the next financial year may be different from the Group’s assumptions

applied as at 31 January 2025 and could require a material adjustment to the carrying amount

of the provision in the next financial year.

The provision applied is based on the application of sell-through rates in the previous financial

year, if those rates were changed +/-5% this would cause a +/-£1.2 million movement in the

overall value of the provision.

Other sources of estimation uncertainty and judgement

Impairment testing

An impairment review is conducted annually in respect of goodwill, and as required for other

assets and cash-generating units (‘CGUs’) where an indicator of potential impairment exists.

The carrying amounts of the assets involved and the level of estimation uncertainty inherent

in determining appropriate assumptions for the calculation of the assets’ recoverable amounts

means impairment reviews are an area of significant management focus. However, whether

that estimation uncertainty is significant to the financial statements is not known until the

analysis is concluded. The Group generally considers the estimation uncertainty in impairment

reviews to be significant if a reasonably possible change in the key assumptions would lead to

a material change in the accounting outcome.

Goodwill

In FY25, the Group conducted an impairment review in respect of goodwill and noted no

reasonably possible change in assumptions that would lead to an impairment charge being

recognised against Goodwill in either the Stores CGU or the Garven CGU. The assumptions

considered are described in more detail in notes 10 and 29. The carrying amount of goodwill

in the consolidated balance sheet totals £322.5 million of which £8.7 million relates to the

acquisition of Garven Holdings, LLC in FY25 and is allocated entirely to the Garven CGU, as

well as £313.8 million which is allocated in its entirety to the group of CGUs, shared assets and

functions that comprise the Group’s Stores business.

Right of use assets and tangible assets

In addition, the Group conducted a store-level impairment review specifically covering right-of-

use assets and property, plant and equipment insofar as they are directly allocable to stores.

As below, the Group estimates the value in use of ROU and tangible assets at a store level based

on future cash flows derived from forecasts included within the Group’s approved budget.

The Group assesses indicators of impairment for the store portfolio on the basis of whether a

material impairment charge (or reversal) could arise in respect of the store portfolio as a whole

in the period. Due to the challenging macro-economic environment, existence of a material

carried forward impairment charge, and an ongoing expectation that around 1% of the store

portfolio can be loss-making at any time, the Group concluded this condition was met for FY25.

Intangible assets

Due to the financial performance in the year, the Group also conducted an impairment test of

the cardfactory Online CGU. No impairment test was carried out for the Getting Personal CGU

as all assets held were previously written down.

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As a result of the acquisition of Garven Holdings, LLC on 3 December 2024, the Group have

recognised both goodwill and intangible assets associated with existing customer relationships

and branding of the acquired business. Management have performed a valuation of the intangible

assets using the Multi-Period Excess Earnings Method (MPEEM) to determine the fair value of the

customer relationships which carry the material value in terms of the intangibles recognised.

The MPEEM valuation method relied on several key assumptions in reaching a valuation for

the customer relationships and this method uses forecast cashflows of the acquired business

in order to generate the present value of future cashflows which represents the fair value of

the assets acquired. The key assumptions underpinning the valuation include the growth rate

of sales, the discount rate applied and the retention rate of existing customer relationships.

We have performed sensitivity analysis over the key assumptions to consider the impact on

the valuations of reasonably possible outcomes. We have sensitised the key assumptions

in discrete scenarios by changing the discount rate by 2.5%, the growth rate by 2% and the

retention allowance for the existing customer relationships by 2.5%, each of the associated

scenarios does not cause a material movement in the valuation of intangibles. It should be

noted that any adjustments to the valuations assessed would be a reclassification between

Goodwill and Intangible assets with no impact on the profit of the Group.

Climate Change

The Group has reviewed the potential impact of climate change and ESG-related risks and

uncertainties on the consolidated financial statements. Given the nature of the Group’s

business and operations, the exposure to both physical and transitional risks associated with

climate change is considered to be low.

In particular, the Group has considered climate change in respect of impairment testing

(potential impact of climate and ESG risks on estimates of future cash flows, notes 10 and 11),

going concern (note 1, below), and inventory provisions (impact of customer preferences and

ESG considerations on potential inventory obsolescence, note 14 and above) and concluded in

each case that there is no material impact in each area at 31 January 2025.

Going concern basis of accounting

The Board continues to have a reasonable expectation that both the Group and the parent

company have adequate resources to continue in operation for at least the next 12 months

and that the going concern basis of accounting remains appropriate.

The Group has delivered a strong financial performance in the current financial year, with

continued growth in sales and good progress towards our overall strategic goals. Furthermore,

the Group has delivered robust operating cash flows before movements in working capital.

Trading since the balance sheet date has remained in line with expectations and there have

been no material events that have adversely affected the Group’s liquidity headroom.

1 Accounting policies continued

Other sources of estimation uncertainty and judgement continued

Approach and results

The Group assessed the recoverable amount of these CGUs on a value in use basis, using

consistent assumptions across all reviews where applicable, with estimates of future cash

flows derived from forecasts included within the Group’s approved budget adjusted to exclude

cash flows from new stores and initiatives so as to assess the assets in their current state and

condition. Where impairment reviews are prepared in respect of assets not yet ready for use,

future development costs and revenues are not excluded so as to fairly reflect the value of

the assets being developed and costs to complete. The assessment of future cash flows that

underpin such impairment reviews inherently require the use of estimates, notably in respect

of future revenues, operating costs including material, freight, wage and energy inflation,

terminal growth rates, foreign currency exchange rates, and discount rates.

The results of the impairment tests are set out in note 10 (intangible assets) and note 12

(leases) which includes the key assumptions considered. The impairment test in respect of

the Stores business and cardfactory Online had significant headroom and accordingly, having

undertaken scenario analysis on the key assumptions, the Group does not believe there are

any reasonably possible changes in those key assumptions that would lead to a material

impairment. The impairment tests show that reasonably possible changes in the assumptions

relating to the Online assets could lead to an immaterial impairment charge in the future if

Online sales do not grow in line with our expectations in future years.

The Group recorded a net impairment reversal of £0.4 million in respect of stores, which is

comprised of £2.2 million of impairment reversals and £1.8 million of impairment charges.

The reversals reflect those stores where an impairment charge made in a prior period has

been reversed due to improved trading and outlook. The net impairment charge in the current

year included a net reversal to impairment on Right of use assets of £0.4m and a net charge to

PPE of £nil. Having considered scenarios consistent with those reviewed in respect of goodwill

impairment testing, the Group is satisfied that reasonable changes in the key assumptions

would not materially change the impairment charge for stores.

Identification and valuation of intangible assets arising on the acquisition

of Garven Holdings

Under IFRS 3 Business Combinations, the identification of intangible assets acquired in a

business combination requires a degree of judgement. This judgement involves determining

whether identifiable intangible assets exist apart from goodwill and recognising them

separately. An intangible asset is identifiable if it meets either the separability criterion or the

contractual-legal criterion. Management consider that the intangible assets identified as part

of the acquisition of Garven Holdings meet the separability criterion and although there is

judgement involved in reaching this conclusion, we do not consider that a significant degree

of judgement was required in making this determination. As part of this judgement, we

considered other possible intangible assets that could be recognised but concluded that

either they did not meet the above criteria or had a trivial fair value.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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1 Accounting policies continued

Going concern basis of accounting continued

On 26 April 2024, the Group entered into an updated £125 million revolving credit facility

(see note 17). The new facilities have an initial maturity date in April 2028, with options to

extend by up to 19 months, subject to lender approval. The facilities include an uncommitted

£75 million accordion, which can be drawn subject to lender approval. The interest margin on

the facilities is dependent upon the Group’s leverage position, with margins between 1.9-2.8%

which is lower than the previous facilities. The new facilities include covenants for a maximum

leverage ratio (calculated as net debt excluding leases divided by EBITDA less rent costs for the

prior 12 months) of 2.5x and a fixed charge cover ratio of at least 1.75x. The Group expects to

operate comfortably within these covenant levels for the foreseeable future.

The Board believes that the updated facilities provide adequate headroom for the Group

to execute its strategic plan. At 31 January 2025, net debt (excluding lease liabilities) was

£58.9 million and the Group had £48.8 million of undrawn facilities.

The UK Corporate Governance Code requires that an assessment is made of the Group’s

ability to continue as a going concern for a period of at least 12 months from the signing of

these financial statements; however it is not specified how far beyond 12 months should

be considered. For the purpose of assessing the going concern assumption, the Group has

prepared cash flow forecasts for the 12 month period following the date of approval of these

accounts, which incorporate our debt facilities and related covenant measures.

These forecasts are extracted from the Group’s approved budget and strategic plan which

covers a period of five years. Within the 12-month period, the Group has considered

qualitative scenarios and the Group’s ability to operate within its existing banking facilities

and meet covenant requirements. Beyond the 12-month period, the Group has qualitatively

considered whether any factors (for example the timing of debt repayments, or longer-term

trading assumptions) indicate a longer period warrants consideration.

The results of this analysis were:

• The Group’s base case forecasts indicate that the Group will continue to trade profitably,

generate positive operating cash flows and retain considerable liquidity headroom against

facility limits whilst meeting all covenant requirements on the relevant test dates (see note

17 for more information in respect of covenant requirements) in the 12-month period.

• In the Board’s view, there are no other factors arising in the period immediately following

12 months from the date of signing these accounts that warrant further consideration.

• Scenario analysis, which considered a reduction in sales, profitability and cash flows on

a permanent basis of c.10% indicated that the Group would maintain liquidity headroom

and covenant compliance throughout the 12 month period. The analysis did not consider

any potential upside from mitigating actions, including the £75 million accordion facility,

a reduction in discretionary costs as well as timing of cash outflows, which could all

significantly increase the headroom further.

The Group conducted a reverse stress test analysis which considered the extent of sales loss or

cost increase that would be required to result in either a complete loss of liquidity headroom

or a breach of covenants associated with the Group’s financing. Seasonality of the Group’s

cash flows, with higher purchases and cash outflows over the summer to build inventory for

Christmas, means liquidity headroom is at its lowest in September and October ahead of the

Christmas season. Conversely, covenant compliance is most sensitive around the year-end.

The reverse stress test analysis demonstrated that the level of sales loss or cost increase

required to result in either a covenant breach or exhausting liquidity would require an

significant reduction in sales that was sustained over a number of months, this scenario also

did not factor in any possible mitigating actions that management could take. Accordingly,

such scenarios are not considered to be reasonably likely to occur.

It should be noted that as a result of the higher net debt position at the year-end due to the

recommencement of dividends and acquisitions in FY25, we expect overall headroom in our

facilities to be lower than in the prior year but management consider that there are sufficient

mitigations available to offset any reasonably possible downturn in trade.

Over recent years, the business has demonstrated a significant degree of resilience and a

proven ability to manage cash flows and liquidity during a period of unprecedented economic

downturn. Accordingly, the Board retains confidence that, were such a level of downturn to

reoccur in the assessment period, the Group would be able to take action to mitigate its effects.

Based on these factors, the Board has a reasonable expectation that the Group has adequate

resources and sufficient loan facility headroom and accordingly the accounts are prepared on

a going concern basis.

Principal accounting policies

The principal accounting policies set out below have been applied consistently to all periods

presented in these consolidated financial statements.

Changes in significant accounting policies

The following new standards and amendments to IFRS were effective for the first time in the

current financial year:

• Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback

• Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current

• Amendments to IAS 1 – Non-current liabilities with Covenants

• Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements

New standards and amendments to existing standards effective in the period have not had a

material effect on the Group’s financial statements.

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1 Accounting policies continued

Principal accounting policies

UK endorsed standards and amendments issued but not yet effective

The following new standards and amendments to IFRS have been issued but are not yet effective.

• Amendments to IAS 21– The effects of Changes in Foreign Exchange Rates

• Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:

Disclosures: Classification and Measurement of Financial Instruments

Annual Improvements to IFRS Accounting Standards – Volume 11 (Issued July 2024, effective

1 January 2026):

• IFRS 1 – First-time Adoption of International Financial Reporting Standards

• IFRS 7 – Financial Instruments: Disclosures

• IFRS 9 – Financial Instruments

• IFRS 10 – Consolidated Financial Statements

• IAS 7 – Statement of Cash Flows

In the prior year the Group early-adopted the requirements of Classification of Liabilities as

Current or Non-current and Non-current Liabilities with Covenants (Amendments to IAS 1).

These amendments clarify the treatment of non-current liabilities with covenants attached to

them – in particular, that when assessing whether a liability with covenants is current or non-

current, an entity should classify a liability as non-current if it has the right to defer settlement

of an obligation for a period of at least 12 months from the balance sheet date. Covenants

shall affect this analysis only if the entity is required to comply with the covenant on or before

the end of the reporting period.

As a result, the Group reclassified amounts due under its revolving credit facility (see note

17) as non-current on the basis that it has the right to roll over such obligations until April

2028 and is compliant with all relevant covenant requirements at the balance sheet date.

The adoption of these amendments has had no other impact on the Group’s Financial Statements.

The application of the remaining standards and amendments in future periods is not currently

expected to have a material impact on the Group’s financial statements.

Basis of consolidation

These consolidated financial statements incorporate the financial results of the Company and

all of its subsidiaries made up to 31 January each year. Subsidiaries are entities controlled

by the Group. The Group controls an entity when it is exposed to, or has rights to, variable

returns from its involvement with the entity and has the ability to direct the activities that

affect those returns through its power over the entity. The financial statements of subsidiaries

are included in the consolidated financial statements from the date on which control

commences until the date on which control ceases. Intercompany transactions and balances

between Group companies are eliminated upon consolidation.

Business combinations

Subject to the transitional relief in IFRS 1, all business combinations have historically been

accounted for by applying the acquisition method as at the acquisition date, which is the date

on which control is transferred to the Group, as set out in IFRS 3.

The Group measures goodwill at the acquisition date as the fair value of the consideration

transferred less the fair value of identifiable assets acquired and liabilities assumed. Where

net assets acquired are in excess of the fair value of consideration, a gain on bargain purchase

is recognised in the Consolidated Income Statement immediately, which was the case for the

acquisition of SA Greetings in the prior year. Costs related to the acquisition are expensed to

the income statement as incurred.

Acquisitions prior to 1 February 2011 (date of transition to IFRS)

IFRS 1 grants certain exemptions from the full requirements of IFRS in the transition period.

The Group and Company elected not to restate business combinations that took place prior

to 1 February 2011. In respect of acquisitions prior to the transition date, goodwill is included

at 1 February 2011 on the basis of its deemed cost at that date, which represents the amount

recorded under UK GAAP.

Revenue

Group revenue is principally attributable to the retail sale of cards, dressings and gifts subject

to a single performance obligation fulfilled by receipt of goods at the point of payment with

minimal returns and refunds. Revenue is recognised at the point the customer is deemed to

have taken delivery of the goods.

Revenue attributable to online sales is recognised on delivery of goods to the customer.

Revenue attributable to retail partners and non-retail customers currently represents a small

percentage of Group revenue and revenue is typically recognised at a point in time based on

a single performance obligation supplying standard Group products. The single performance

obligation varies by Partnership agreement, including from the point of dispatch to delivery to

end customer. Payment terms for retail partners are typically 30-60 days from invoicing. For a

portion of sales to retail partners in the Group, the customers takes the title for goods at the

point of dispatch from the supplier’s facility, revenue is recognised at this point for such sales

as all performance obligations are fulfilled.

Certain contracts with retail partners may be subject to a cost of entering into the contract

along with a minimum order quantity and/or volume related rebate for an initial period of the

contract. These contracts also give rise to performance-based variable consideration including

license and franchise fees. These amounts are not material in the current year reflecting the

small proportion of revenue arising under such contracts.

1. Effective for annual periods starting on or after 1 January 2025.

2. Effective for annual periods starting on or after 1 January 2026.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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1 Accounting policies continued

Government grants

Income associated with Government support initiatives is recognised where there is reasonable

assurance that the grant will be received and the Group will comply with all attached

conditions. Grants are recognised in the income statement over the period necessary to match

them with the related costs for which they are to compensate. If costs have already been

incurred, the grant income is recognised immediately at the point the above criteria are met.

Finance expense

Finance expense comprises interest charges, including interest on leases under IFRS 16, and

losses on interest rate derivative financial instruments. Borrowing costs that are directly

attributable to the acquisition, construction or production of an asset that takes a substantial

time to be prepared for use, are capitalised as part of the cost of that asset.

Interest expense is recognised in the income statement as it accrues, using the effective

interest method. The effective interest method takes into account fees, commissions or other

incremental transaction costs integral to the yield. Accounting policies for leases are detailed

separately.

Cash and cash equivalents

Cash and cash equivalents includes short-term deposits with banks and other financial

institutions, cash held in stores in the form of till floats, money market funds and credit card

payments where cash is received into the bank within 2 working days of the transaction.

Bank transactions are recorded on their settlement date.

Foreign currencies

Functional and presentation currency

The consolidated financial statements are presented in pound Sterling, which is the functional

currency of the Company.

Foreign operations

The Group has foreign subsidiaries with functional currencies including the US Dollar, the

South African Rand and the Euro. On consolidation, assets and liabilities of foreign operations

are translated into Sterling at the prevailing market exchange rate on the balance sheet date.

The results of foreign operations are translated into Sterling at average rates of exchange for

the year with any resulting difference being taken to the retranslation reserve.

Transactions and balances

The Group has currency transactions in respect of inventory purchases and certain sales to

retail partners that are denominated in US Dollars. Transactions in foreign currencies are

recorded at the exchange rate on the transaction date. Foreign exchange gains and losses

resulting from the settlement of such transactions and from the translation at year-end

exchange rates of monetary assets and liabilities denominated in foreign currencies are

recognised in the income statement within cost of sales, except when deferred in other

comprehensive income as qualifying cash flow hedges. Foreign currency gains and losses

are reported on a net basis.

Certain of the Group’s subsidiaries have transactions denominated in a foreign currency that

is not their functional currency.

T axation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in

the income statement except to the extent that it relates to items recognised directly in equity

or through other comprehensive income, in which case it is recognised in equity or other

comprehensive income respectively.

Current tax is the expected tax payable or receivable on the taxable income or loss for the

year, using tax rates enacted or substantively enacted at the balance sheet date, and any

adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for: the initial recognition of goodwill;

the initial recognition of assets or liabilities that affect neither accounting nor taxable profit

other than in a business combination, and differences relating to investments in subsidiaries

to the extent that they will probably not reverse in the foreseeable future. The amount of

deferred tax provided is based on the expected manner of realisation or settlement of the

carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at

the balance sheet date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits

will be available against which the temporary difference can be utilised.

Dividends

Dividends are recognised as a liability in the period in which they are approved.

Financial instruments

Non-derivative financial assets

Non-derivative financial assets comprise trade and other receivables and cash and cash equivalents.

The Group classifies all its non-derivative financial assets as financial assets at amortised cost.

Financial assets at amortised cost are initially measured at fair value plus directly attributable

transaction costs, except for trade and other receivables without a significant financing component

that are initially measured at transaction price. Subsequent to initial recognition non-derivative

financial assets are carried at amortised cost less allowances for estimated irrecoverable

amounts which is recognised in the income statement in line with IFRS 9. We do expect any

material credit losses to arise.

Cash and cash equivalents comprise cash in hand, at bank and on short-term deposit for less

than three months. Bank overdrafts, within borrowings, that are repayable on demand and

form an integral part of the Group’s cash management are included as a component of cash

and cash equivalents for the purpose of the cash flow statement.

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1 Accounting policies continued

Financial instruments continued

Non-derivative financial assets

Non-derivative financial liabilities comprise bank borrowings and trade and other payables.

Non-derivative financial liabilities are initially recognised at fair value, less any directly

attributable transaction costs and subsequently stated at amortised cost using the effective

interest method. Accounting policies for lease liabilities are detailed separately.

Where bank borrowings are refinanced, the Group assesses whether the transaction results

in new facilities or a modification of the previous facilities. Where the transaction results in a

modification of the facilities, the Group assesses whether that modification is substantial by

reference to whether the present value of the cash flows of the new facilities, discounted using

the original effective interest rate, is more than 10% different to the present value of the cash

flows of the previous facilities. Where a modification is substantial, the Group derecognises the

original liability and recognises a new liability for the modified facilities with any transaction

costs expensed to the income statement. Where the modification is non-substantial, the Group

amends the carrying amount of the liability to reflect the updated cash flows and amends the

effective interest rate from the modification date.

The refinancing completed in April 2024 was deemed to result in new facilities due to a change

in the banking partners forming the syndicate issuing the facilities.

Derivative financial instruments

Derivative financial instruments are mandatorily categorised as fair value through profit or

loss (‘FVTPL’) except to the extent they are part of a designated hedging relationship and

classified as cash flow hedging instruments. The Group utilises foreign currency derivative

contracts and US Dollar denominated cash balances to manage the foreign exchange risk on

US Dollar denominated purchases and interest rate derivative contracts to manage the risk on

floating interest rate bank borrowings.

Derivative financial instruments not designated as an effective hedging relationship principally

relate to structured foreign exchange options that form part of the foreign exchange risk

management policy detailed in note 23 of the financial statements. Gains and losses in respect

of foreign exchange and interest rate derivative financial instruments that are not part of an

effective hedging relationship are recognised within cost of sales and net finance expense.

Cash flow hedges

The Group applies cash flow hedge accounting in respect of certain derivative financial

instruments for the forward purchase of foreign currency, and interest rate swaps.

The Group’s hedging activities are described in further detail in note 23.

When a derivative is designated as a cash flow hedging instrument, the effective portion of

changes in the fair value of the derivative is recognised in other comprehensive income (‘OCI’)

and accumulated in the hedging reserve. The effective portion of changes in the fair value of

the derivative that is recognised in OCI is limited to the cumulative change in fair value of the

hedged item, determined on a present value basis, from inception of the hedge.

Any ineffective portion of changes in the fair value of the derivative is recognised immediately

in profit or loss.

The Group determines the existence of an economic relationship between the hedging

instrument and hedged item based on the currency, amount and timing of their respective

cash flows, applying a hedge ratio of 1:1. The Group assesses whether the derivative

designated in each hedging relationship is expected to be and has been effective in offsetting

changes in cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, the main sources of ineffectiveness are:

• changes in the timing of the hedged transactions; and

• the effect of the counterparties’ and the Group’s own credit risk on the fair value of

derivative contracts, which is not reflected in the change in the fair value of the hedged

cash flows.

The Group designates only the change in fair value of the spot element of forward exchange

contracts as the hedging instrument in cash flow hedging relationships. The change in fair

value of the forward element of forward exchange contracts (‘forward points’) is separately

accounted for as a cost of hedging and recognised in a costs of hedging reserve within equity.

When foreign exchange hedged forecast transactions subsequently result in the recognition of

inventory, the amount accumulated in the hedging reserve and the cost of hedging reserve is

included directly in the initial cost of the inventory. If the hedge no longer meets the criteria for

hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then

hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is

discontinued, the amount that has been accumulated in the hedging reserve remains in equity

until it is included in the cost of inventory on its initial recognition or, for interest cash flow

hedges, it is reclassified to profit or loss in the same period or periods as the hedged interest

future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have

been accumulated in the hedging reserve and the cost of hedging reserve are immediately

reclassified to profit or loss.

Fair value estimation

The techniques applied in determining the fair values of financial assets and liabilities are

disclosed in note 24.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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1 Accounting policies continued

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and

accumulated impairment losses.

Depreciation is charged to the income statement on a straight-line basis over the estimated

useful lives as follows:

• buildings 25 – 50 years

• leasehold improvements shorter of 5 years and lease term

• plant and equipment, fixtures and motor vehicles 3 – 10 years

Depreciation methods, useful lives and residual values are reviewed at each balance sheet

date. Depreciation on assets under construction does not commence until they are complete

and available for use and the asset has been classified into one of the categories as above.

Intangible assets and goodwill

Goodwill

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to

CGUs (as described in note 10) and is not amortised but is tested annually for impairment.

Software

Computer software is carried at cost less accumulated amortisation and any provision for

impairment. Costs relating to development of computer software are capitalised if the

recognition criteria of IAS 38 ‘Intangible Assets’ are met or expensed as incurred otherwise.

Amortisation

Amortisation is charged to the income statement on a straight-line basis over the estimated

useful lives of intangible assets unless such lives are indefinite. Intangible assets with an

indefinite useful life and goodwill are systematically tested for impairment at each balance

sheet date. Software is amortised from the date they are available for use. The estimated

useful life of software is 3-10 years.

Acquired intangible assets

Intangible assets that are acquired by the Group as a result of business combinations are

recorded at fair value at the acquisition date and stated on an ongoing basis as fair value less

accumulated amortisation and less any accumulated impairment losses.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful

lives of intangible assets, other than goodwill, from the date that they are available for use,

since this most closely reflects the expected pattern of consumption of the future economic

benefits embodied in the asset. The estimated useful lives for the current and comparative

periods are as follows:

• Customer relationships and brands – 10 years.

Impairment of non-financial assets

The carrying values of non-financial assets are reviewed for impairment where there is

an indication of impairment. If an impairment loss arises, the asset value is adjusted to

its estimated recoverable amount and the impairment loss is recognised in the income

statement. Similarly, if an impairment reversal arises, the asset value is adjusted to its carrying

amount, provided this exceeds the recoverable amount, and the impairment reversal is

recognised in the income statement.

Goodwill and intangible assets not yet ready for use or with an indefinite useful economic life

are reviewed for impairment annually.

Provisions

A provision is recognised where the Group has a present legal or constructive obligation as

a result of a past event, which will more likely than not result in the Group being required to

make a payment (or other outflow of economic benefits) in order to settle the obligation.

Provisions are valued at the Group’s best estimate of the amount that will be required to settle

the obligation. Specific information in respect of the provisions recorded in each financial year

covered by these accounts is provided in the provisions note.

Inventories

Inventories are stated at the lower of cost and net realisable value.

For inventories manufactured by the Group, cost is based on the first-in first-out principle

and includes expenditure incurred in acquiring the inventories, production costs and other

costs in bringing them to their existing location and condition. For manufactured inventories

and work in progress, cost includes an appropriate share of overheads based on normal

operating capacity.

Given the significant volumes involved, for inventories held in and for retail stores the Group

applies a moving average price methodology based on the cost of inventory purchases. The

moving average price is updated to reflect the latest cost each time inventory is purchased.

Intra-Group profit on inventory (i.e. the difference between the retail standard cost and actual

manufactured cost) is eliminated on consolidation.

Provisions are made for obsolete, slow-moving and discontinued inventories, based on

experience, the rate that Group inventory sells through and the Group’s merchandising plans

for current and future seasons.

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1 Accounting policies continued

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of

new shares are shown in equity as a deduction from the proceeds.

Merger reserve

On 30 April 2014 Card Factory plc acquired 100% of the share capital of CF Topco Limited in

a share for share exchange, thereby inserting Card Factory plc as the Parent Company of the

Group. The shareholders of CF Topco Limited became 100% owners of the enlarged share

capital of Card Factory plc. The premium arising on the issue of shares is recognised in the

merger reserve.

Share-based payments

The Company issues equity-settled share-based payments to employees within the Group

through the Card Factory Restricted Share Awards Scheme (‘RSA’) (previously through the

(‘LTIP’)) and the Card Factory SAYE Scheme (‘SAYE’), see note 25 for further details. The cost of

equity-settled share awards is measured as the fair value of the award at the grant date using

the Black-Scholes model.

The cost of the awards is expensed to the income statement, together with a corresponding

adjustment to equity, on a straight-line basis over the vesting period of the award. The total

income statement charge is based on the Group’s estimate of the number of share awards

that will eventually vest in accordance with the vesting conditions. The awards do not include

market-based vesting conditions. At each balance sheet date, the Group revises its estimate of

the number of awards that are expected to vest. Any revision to estimates is recognised in the

income statement, with a corresponding adjustment to equity.

Leases

Definition of a lease

Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the

use of an identified asset for a period of time in exchange for consideration.

The Group has assessed that its entire store lease portfolio, some warehousing locations,

an office location and motor vehicles are lease contracts. Other contracts assessed, including

distribution contracts and IT equipment, are deemed not to be a lease within the definition

of IFRS 16 or are subject to the election not to apply the requirements of IFRS 16 to short-term

or low value leases. The Group recognises the lease payments associated with these leases

as an expense on a straight-line basis over the lease term.

For property leases containing a non-lease component (for instance a lease inclusive of rates

and service charge), the Group has elected to apply the practical expedient not to separate

the non-lease component from the lease component and treat the whole contract as a lease.

A small proportion of the store lease portfolio are subject to an element of turnover linked

variable rents that are excluded from the definition of a lease under IFRS 16. The Group does

not have any significant lessor contracts.

Accounting as a lessee

The Group recognises a right-of-use asset and a lease liability at the lease commencement

date. The right-of-use asset is initially measured at cost, which comprises the initial amount

of the lease liability adjusted for any lease payments made at or before the commencement

date, plus any initial direct costs incurred, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the

commencement date to the end of the lease term. The right-of-use asset is periodically

reduced by any impairment losses and adjusted for certain remeasurements of the

lease liability.

The lease liability is initially measured at the present value of the lease payments that are not

paid at the commencement date, discounted using the interest rate implicit in the lease or,

if that rate cannot be readily determined, the Group’s incremental borrowing rate. Typically,

the Group uses its incremental borrowing rate, at the date of lease commencement, as the

discount rate.

The Group determines its incremental borrowing rate by reference to its own funding

arrangements, which are subject to leverage margin ratchets, variable three-month SONIA

interest rates and periodic refinancing, thereby ensuring they remain a reasonable reflection

of the Group’s current borrowing costs. The Group’s leases are predominantly in respect of its

store portfolio, which represent the majority of the Group’s revenue and therefore the Group’s

borrowing costs, as at the date of lease commencement, are deemed to be representative

of the incremental borrowing costs for additions to right-of-use assets. The Group does not

believe there are significant differences between the risk margins that would apply across

its lease portfolio. The term and payment profile are reflected in the discount rate applied to

each individual lease by virtue of the variable interest-curve component of the incremental

borrowing rate.

The assessment of lease term may include the application of judgement, particularly in respect

of options to break often included in the Group’s property leases. The Group assesses lease

term as the non-cancellable period of the lease plus an assessment of reasonably certain

continued tenancy in respect of tenant options to break or renew. This period usually equates

to the full term of the lease. The Group considers that lease renewal is reasonably certain

when it has determined whether the store meets its strategic requirements and is confident

the landlord is supportive of lease renewal and on terms acceptable to the Group. This

typically occurs in the latter stages of an existing lease.

After initial recognition, the lease liability is measured at amortised cost using the effective

interest method. It is remeasured when there is a change in future lease payments arising from

a change in an index, rate or contractual market rent review or if there is a significant event or

change in circumstances as a result of which the Group changes its assessment of whether it

will exercise a break option. When the lease liability is remeasured in this way, a corresponding

adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or

loss if the carrying amount of the right-of-use asset has been reduced to zero.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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1 Accounting policies continued

Leases continued

Accounting as a lessee continued

From time to time, a lease may expire without a new lease being agreed. In such circumstances,

if the Group has not served or received notice under the terms of the lease, it may continue to

occupy the store whilst a new lease is agreed, referred to as a ‘holdover arrangement’. Most of

the store portfolio is protected by the Landlord and Tenant Act (1954), under which as tenant

the Group has an automatic right to a new lease subject to certain specific grounds under which

the landlord can cancel. Under a holdover arrangement, the lease typically continues on a rolling

basis on the same financial terms as the previous lease until new terms are formally agreed. The

Group accounts for holdover arrangements by assuming a new five-year lease with payments

equivalent to those previously agreed. Five years represents the average term of a lease

across the Group’s store portfolio, inclusive of break periods considered reasonably likely not

to be exercised. In rare circumstances, the holdover lease may be calculated using alternative

assumptions that better reflect the Group’s expectations regarding the likely cost and term of

the new lease being negotiated. When new terms are agreed, the holdover lease is modified

according to the Group’s normal accounting policy for lease modifications, as described above.

Where a lease expires at the end of its contractual term, including where the store in question

enters a holdover arrangement, the right-of-use asset cost and accumulated depreciation

associated with that lease is treated as a disposal.

2 Segmental reporting

Following investment in the Group’s people, systems and infrastructure to support its

strategy, the Group is organised into four main business areas which meet the definition

of an Operating segment under IFRS, those being cardfactory Stores, cardfactory Online,

Partnerships and Printcraft. Each of these business areas has a dedicated management team

and reports discrete financial information to the Board for the purpose of decision making.

• cardfactory Stores retails greeting cards, celebration accessories, and gifts through an

extensive network of stores in the UK & Republic of Ireland.

• cardfactory Online retails greeting cards, celebration accessories, and gifts via its online

platforms.

• Partnerships represents the Group’s “B2B” operations and sells greeting cards, celebration

accessories and gifts across various brands via a network of third party retail partners

both in the UK and overseas.

• Printcraft is a manufacturer of greeting cards and personalised gifts and sells the majority

of its output intra-group to the Stores and online businesses.

We consider that both Getting Personal and cardfactory Online, which have previously been

disclosed as separate operating segments, fall under a single operating segment of cardfactory

Online. This is due to the fact that there are common management teams, the Board consider

aggregated financial information relating to Online performance and strategic decisions are

considered based on a single Online channel. This has no impact on the financial statements with

the exception of aggregating the revenue and EBITDA performance within this note. At the end of

the period, from 30 January 2025, the Group took the decision to close the gettingpersonal.co.uk

store. Going forward, the Group will trade from a single online platform, cardfactory.co.uk.

The Group acquired SA Greetings on 25 April 2023, Garlanna Holdings Limited on 04

September 2024 and Garven Holdings, LLC on 04 December 2024. All three business’

principal activities relate to the sale of cards, gifts and/or celebration essentials to business

customers, and therefore the results of SA Greetings, Garven and Garlanna are included in the

Partnerships operating segment for the purposes of segmental reporting.

The accounting policies applied in preparing financial information for each of the Group’s

segments are consistent with those applied in the preparation of the consolidated financial

statements. The Group’s support centre and administrative functions are run by the

cardfactory Stores segment, with operating costs recharged to other segments where they are

directly attributable to the operations of that segment.

The Board reviews revenue and EBITDA by segment, with the exception of Printcraft by virtue of its

operations being predominantly intra-group in nature. Note that under IFRS EBITDA is considered

to be a non-GAAP measure as considered in the appendix to these financial statements. Whilst

only cardfactory Stores meets the quantitative thresholds in IFRS to require disclosure, the Group’s

other trading segments are reported below as the Group considers that this information is useful

to stakeholders in the context of the Group’s ‘Opening Our New Future’ strategy.

Revenue and EBITDA for each segment, and a reconciliation to the consolidated operating

profit per the financial statements, is provided in the table below:

	2025	2024
	£’m	£’m
Revenue:
cardfactory Stores	506.8	478.9
cardfactory Online	13.2	14.7
Partnerships	22.2	17.0
Other	0.3	0.3
Consolidated Group revenue	542.5	510.9
Of which derived from customers in the UK	509.8	484.8
Of which derived from customers overseas	32.7	26.1
EBITDA 1 :
cardfactory Stores	131.8	127.4
cardfactory Online	(6.3)	(5.7)
Partnerships	1.0	1.2
Other	1.0	(0.3)
Consolidated Group EBITDA 1	127.5	122.6
Consolidated Group depreciation, amortisation & impairment	(48.1)	(47.4)
Consolidated Group gain on disposal	(0.1)	1.2
Consolidated Group Operating Profit	79.3	76.4

1 This is an Alternative Performance Measure not defined under IFRS

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2 Segmental reporting continued

The “Other” category principally reflects central overheads, Printcraft sales to third parties and

consolidation adjustments not impacting another operating segment.

Group revenue is predominantly derived from retail customers. Average transaction value is

low and products are transferred at the point of sale. Group revenue is presented as a single

category as, by segment, revenues are subject to substantially the same economic factors

that impact the nature, amount, timing and uncertainty of revenue and cash flows. The types

of products sold via each operating segment are fundamentally similar in nature and it is the

channel or location of sale that differs. As such, we consider that the segmental analysis above

provides a reasonable breakdown of sales by product type.

The table below sets out a geographical analysis of revenues for the current and prior year:

	2025	2024
	£’m	£’m
Revenue derived from customers in the UK	509.8	484.8
Revenue derived from customers overseas:
– South Africa	11.6	10.2
– Republic of Ireland	15.4	11.1
– United States of America	3.1	–
– Rest of the World	2.6	4.8
Consolidated revenue	542.5	510.9

Revenues from customers are allocated to geographical locations based on the location of the

customer to whom the sale is made. Rest of World includes revenue derived from all other

geographical locations (including Australia and the Middle East), none of the components of

this category are individually material.

Of the Group’s non-current assets, £9.6 million (2024: £10.0 million) relates to assets based

outside of the UK, principally in relation to the Group’s stores in the Republic of Ireland

and wholesale operations within the Republic of Ireland, United States and South Africa.

Non-current assets related to stores based in the Republic of Ireland are £6.4 million as at

31 January 2025 (2024: £4.8 million). Non-current assets related to wholesale operations are

£0.2 million in the Republic of Ireland, £0.1 million in the United States and are £2.9 million

(2024: £5.2) in South Africa.

3 Operating profit

Operating profit is stated after charging/(crediting) the following items:

	2025	2024
	£’m	£’m
Staff costs (note 5)	174.5	162.4
Depreciation expense
– owned fixed assets (note 11)	8.7	7.6
– right of use assets (note 12)	36.3	35.9
Amortisation expense (note 10)	3.5	2.8
Reversal of impairment of right-of-use assets (note 12)	(0.4)	(0.2)
Impairment of tangible assets (note 11)	–	0.2
Impairment of intangible assets (note 10)	–	1.1
Loss/(profit) on disposal of fixed assets (notes 11 and 12)	0.1	(1.2)
Foreign exchange loss	2.3	0.6

The total fees payable by the Group to Forvis Mazars LLP and their associates during the

period was as follows:

	2025	2024
	£’000	£’000
Audit of the consolidated and Company financial statements	77	55
Amounts receivable by the Company’s auditor and its associates
in respect of:
Audit of financial statements of subsidiaries of the Company	624	498
Audit-related assurance services	92	85
Total fees	793	638

4 EBITDA

EBITDA represents profit for the period before net finance expense, taxation, gains or losses

on disposal, depreciation, amortisation and impairment charges.

	2025	2024
	£’m	£’m
Operating profit	79.3	76.4
Depreciation, amortisation and impairment	48.1	47.4
Loss/(gain) on disposal	0.1	(1.2)
EBITDA 1	127.5	122.6

1 This is an Alternative Performance Measure not defined under IFRS

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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5 Employee numbers and costs

The average number of people employed by the Group (including Directors) during the year,

analysed by category, was as follows:

	2025	2024
	Number	Number
Management and administration	773	534
Operations	9,748	9,797
	10, 52 1	10,331

The aggregate payroll costs of all employees including Directors were as follows:

	2025	2024
	£’m	£’m
Employee wages and salaries	154.3	143.1
Equity-settled share-based payment expense	2.3	2.0
Social security costs	11.1	9.3
Defined contribution pension costs	2.3	2.1
Total employee costs	170.0	156.5
Agency labour costs	4.5	5.9
Total staff costs	174.5	162.4

Key management personnel

The key management personnel of the Group comprise the Card Factory plc Board of

Directors, the Executive Board and the Operating Board. Key management personnel

compensation is as follows:

	2025	2024
	£’m	£’m
Salaries and short-term benefits	7.9	7.4
Equity-settled share-based payment expense	2.0	1.6
Social security costs	1.1	1.0
Defined contribution pension costs	0.1	0.2
	11.1	10.2

Remuneration of Directors

	2025	2024
	£’m	£’m
Directors’ remuneration	1.3	1.6
Amounts receivable under long-term incentive schemes	0.8	0.5
Company contributions to defined contribution pension plans	–	–
	2.1	2.1

The table above includes the remuneration of Directors in each year. Amounts receivable

under long-term incentive schemes reflects the value of options exercised during the year.

Further details of the remuneration of the current directors are disclosed in the Directors’

Remuneration Report on pages 102 to 114. The basis of calculation for certain items

described in the Directors’ Remuneration Report may differ to that used in this note, reflecting

differences in the relevant regulations.

6 Net finance expense

	2025	2024
	£’m	£’m
Net finance expense
Interest received	(0.2)	–
Interest on bank loans and overdrafts	6.4	6.5
Amortisation of loan issue costs 1	1.0	0.6
Lease interest	8.0	6.3
	15.2	13.4

1 Amortisation of loan issue costs includes £0.5m of costs related to the accelerated release of costs held on the

balance sheet related to the previous financing facilities due to the completion of refinancing in the April 2024.

These costs are excluded from Adjusted earnings – see appendix on pages 169 to 172.

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7 Taxation

The tax charge includes both current and deferred tax. The tax charge reflects the estimated

effective tax on the profit before tax for the Group for the year ended 31 January 2025 and the

movement in the deferred tax balance in the year, so far as it relates to items recognised in

the income statement.

Taxable profit or loss differs from profit or loss before tax as reported in the income

statement, because it excludes items of income or expenditure that are either taxable or

deductible in other years or never taxable or deductible.

Recognised in the income statement

	2025	2024
	£’m	£’m
Current tax charge
Current year	16.5	13.8
Adjustments in respect of prior periods	(1.5)	0.2
Total current tax charge	15.0	14.0
Deferred tax charge/(credit)
Origination and reversal of temporary differences	(0.2)	2.1
Adjustments in respect of prior periods	1.5	–
Total deferred tax charge	1.3	2.1
Total income tax charge	16.3	16.1

The effective tax rate of 25.4% (2024: 24.5%) on the profit before taxation for the year is

slightly higher than (2024: higher than) the average rate of mainstream corporation tax in the

UK for the year of 25% (2024: 24%).

The tax charge is reconciled to the standard rate of UK corporation tax as follows:

	2025	2024
	£’m	£’m
Profit before tax	64.1	65.6
Tax at the standard UK corporation tax rate of 25% (2024: 24% 1 )	16.0	15.8
Tax effects of:
Expenses not deductible for tax purposes	0.5	0.6
Income not taxable for tax purposes	–	(0.6)
Adjustments in respect of prior periods	–	0.3
Effect of overseas tax rates	(0.2)	–
Total income tax charge	16.3	16.1

Total taxation recognised through the income statement, other comprehensive income and

through equity are as follows:

		2025				2024
	Current	Deferred	Total	Current	Deferred	Total
	£’m	£’m	£’m	£’m	£’m	£’m
Income statement	15.0	1.3	16.3	14.0	2.1	16.1
Other comprehensive income	–	0.4	0.4	–	(0.7)	(0.7)
Equity	–	0.1	0.1	–	(0.4)	(0.4)
Total tax	15.0	1.8	16.8	14.0	1.0	15.0

1 In October 2022, the Government announced changes to the Corporation Tax rate increasing the main rate of

Corporation Tax to 25% (previously 19%). This became effective as at 1 April 2023 giving an average Corporation Tax

rate of 24.03% for the year to 31 January 2024.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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Company Information

8 Dividends

In June 2024, the Group paid a dividend of 4.5 pence per share (totalling £15.6 million) in

respect of the FY24 financial year. This dividend represented the total dividend for FY24

(including an amount in lieu of an interim dividend) with interim dividends unable to be paid

during FY24 due to restrictions in the Group’s previous financing facilities that remained in

place until 31 January 2024.

FY25 final dividend

At the forthcoming Annual General Meeting, the Board will recommend to shareholders that

a resolution is passed to approve payment for a final dividend for the year ended 31 January

2025 of 3.6 pence per share, equivalent to approximately £12.5 million. The final dividend will

be payable to shareholders on the share register on 30 May 2025, with payments to be made

on 27 June 2025.

	Pence per	2025	2024
Dividends paid in the year:	share	£’m	£’m
Total dividend for the year ended 31 January 2024	4.5p	15.6	–
Interim dividend for the year ended 31 January 2025	1.2p	4.2	–
Total dividends paid to shareholders in the year		19.8	–

Dividend equivalents totalling £0.5 million (2024: £nil) were accrued in the year in relation to

share-based long-term incentive schemes.

9 Earnings per share

Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary

shareholders by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share is based on the weighted average number of shares in issue for the

period, adjusted for the dilutive effect of potential ordinary shares. Potential ordinary shares

represent employee share incentive awards and save as you earn share options.

	2025	2024
	(Number)	(Number)
Weighted average number of shares in issue	346,910,019	343,339,468
Weighted average number of dilutive share options	2,295,420	3,940,467
Weighted average number of shares for diluted
earnings per share	349,205,439	347,279,935

	2025	2024
	£’m	£’m
Profit for the financial period	47.8	49.5
	Pence	pence
Basic earnings per share 1	13.8	14.4
Diluted earnings per share	13.7	14.3

1 For calculation of adjusted earnings per share, based on adjusted PBT which removes the impact of non-underlying

transactions, please see the appendix on pages 169 to 172.

10 Intangible assets

		Customer
		relationships
	Goodwill	and brands	Software	Total
	£’m	£’m	£’m	£’m
Cost
At 1 February 2024	328.2	–	35.0	363.2
Additions	–	–	7.0	7.0
Acquisitions (note 29)	8.7	12.9	–	21.6
At 31 January 2025	336.9	12.9	42.0	391.8
Amortisation/impairment
At 1 February 2024	14.4	–	17.4	31.8
Amortisation in the period	–	0.3	3.2	3.5
Impairment in the period	–	–	–	–
At 31 January 2025	14.4	0.3	20.6	35.3
Net book value
At 31 January 2025	322.5	12.6	21.4	356.5
At 31 January 2024	313.8	–	17.6	331.4

Customer relationships and brands are intangible assets with a finite life, the average

remaining useful life of this class of assets is 9 years and 9 months. The average remaining

useful life of Software is 4 years and 8 months.

As at 31 January 2025, the Group held £3.5 million of assets under construction within

Software (FY24: £1.9 million).

During the prior year, the Group recognised an impairment charge of £1.1 million in respect

of the online platform for Getting Personal. The charge to the Getting Personal assets reflected

the more focused investment being targeted at the CF Online platform as considered in

note 1. There is no further impairment charge recognised in FY25 in relation to the Getting

Personal platform.

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10 Intangible assets continued

		Customer
		relationships
	Goodwill	and brands	Software	Total
	£’m	£’m	£’m	£’m
Cost
At 1 February 2023	328.2	–	26.0	354.2
Additions	–	–	9.0	9.0
At 31 January 2024	328.2	–	35.0	363.2
Amortisation/impairment
At 1 February 2023	14.4	–	13.5	27.9
Amortisation in the period	–	–	2.8	2.8
Impairment in the period	–	–	1.1	1.1
At 31 January 2024	14.4	–	17.4	31.8
Net book value
At 31 January 2024	313.8	–	17.6	331.4
At 31 January 2023	313.8	–	12.5	326.3

Goodwill arising on the acquisition of Getting Personal in 2011 of £14.4 million was allocated

to the Getting Personal CGU, which corresponds to the Online operating segment (see note 2).

This goodwill in respect of Getting Personal was fully written down in 2020.

All remaining historical goodwill is in respect of the cardfactory Stores business, which is

comprised of all of the cardfactory Stores (each an individual CGU for asset impairment testing

purposes), associated central functions and shared assets. cardfactory Stores is the lowest

level at which the Group’s management monitors goodwill internally.

The total carrying amount of the cardfactory Stores group of CGUs for impairment testing

purposes, inclusive of liabilities that are necessarily considered in determining the recoverable

amount, at 31 January 2025 was £374.6 million (2024: £341.1 million).

As a result of the acquisition of Garven Holdings, LLC in FY25 (see note 29), £8.7 million of

goodwill has been recognised by the Group and allocated wholly to the Garven CGU, which

forms part of the Partnerships operating segment. The total carrying amount of the Garven

CGU for impairment purposes, inclusive of liabilities that are necessarily considered in

determining the recoverable amount, at 31 January 2025 was £19.8m million (2024: £nil).

Management have performed a valuation of intangible assets relating to existing customer

relationships and branding using the Multi-Period Excess Earnings Method (MPEEM) to

determine the fair value of the customer relationships which carry the material value in terms

of the intangibles recognised. The MPEEM valuation method relied on several key assumptions

in reaching a valuation for the customer relationships and this method uses forecast

cashflows of the acquired business in order to generate the present value of future cashflows

which represents the fair value of the assets acquired. The key assumptions underpinning the

valuation include the growth rate of sales, the discount rate applied and the retention rate of

existing customer relationships.

We have performed sensitivity analysis over the key assumptions to consider the impact on

the valuations of reasonably possible outcomes. We have sensitised the key assumptions

in discrete scenarios by changing the discount rate by 2.5%, the growth rate by 2% and the

retention allowance for the existing customer relationships by 2.5%, each of the associated

scenarios does not cause a material movement in the valuation of intangibles. It should be

noted that any adjustments to the valuations assessed would be a reclassification between

goodwill and intangible assets with no impact on the profit of the Group.

Stores CGU

The recoverable amount has been determined based on a value-in-use calculation. This value-

in-use calculation is based on the Group’s most recent approved five-year strategic plan, to

exclude any value from planned new stores or initiatives, so as to assess the valuation of the

assets in their current state and condition.

The key assumptions used in determining the recoverable amount are:

• Future trading performance including sales growth, product mix, material and

operating costs;

• Foreign exchange rates applicable to the Group’s purchases of goods for resale;

• The terminal growth rate applied; and

• The discount rate.

The values assigned to the variables that underpin the Group’s expectations of future trading

performance were determined based on historical performance and the Group’s expectations

with regard to future trends. Where applicable, amounts take into account the Group’s energy

hedges and fixed contracts, changes in market prices and rates, and relevant industry and

consumer data to inform expectations around future trends.

The Group assumes a long-term GBPUSD exchange rate in line with published forward curves

at the balance sheet date, adjusted to reflect the value of forward contracts in place. The fair

value of these contracts is included in the carrying amount.

A 0% (2023: 0%) terminal growth rate is applied beyond the five-year term of the plan,

representing a sensitised view of the Group’s estimate of the long-term growth rate of the

sector. Whilst such long-term rates are inherently difficult to benchmark using independent

data, the Group’s reverse stress-testing of the goodwill impairment model indicated a significant

negative terminal decline would be required in order to eliminate the headroom completely.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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10 Intangible assets continued

Stores CGU continued

The forecast cash flows are discounted at a pre-tax rate of 12.0% (2024: 13.0%). The discount

rate is derived from a calculation using the capital asset pricing model to calculate cost of

equity utilising available market data. The discount rate is compared to the published discount

rates of comparable businesses and relevant industry data prior to being adopted.

No impairment loss was identified. The valuation indicates sufficient headroom such that any

reasonably possible change to the key assumptions would not result in an impairment of the

related goodwill.

Garven CGU

The recoverable amount has been determined based on a value-in-use calculation. This

value-in-use calculation is based on a sensitized projection of the forecast for the business to

exclude any potential future growth as a result of being a part of the Group.

The key assumptions used in determining the recoverable amount are:

• Future trading performance including sales and margin based on pre-acquisition

performance;

• The terminal growth rate applied; and

• The discount rate.

The values assigned to the variables have been based on current performance and balanced

assumptions of how this translates into performance over the next 5 years.

A 0% terminal growth rate is applied beyond the five-year term of the plan, representing a

prudent view of the Group’s estimate of the long-term potential growth at Garven. Whilst such

long-term rates are inherently difficult to benchmark using independent data, the Group’s

reverse stress-testing of the goodwill impairment model indicated a significant negative

terminal decline would be required in order to eliminate the headroom completely.

Subsequent to the balance sheet date, the United Stated introduced new trade tariffs

which will impact on the supply chain activities of Garven and its customers. The Group has

completed an initial impact assessment and performed sensitivity analysis which indicated

that, based on the tariffs and planned business activities in place at the date of approval of

these financial statements, did not change the conclusion of the analysis above.

The forecast cash flows are discounted at a pre-tax rate of 12.0% which is based on the Group

discount rate. The valuation indicates sufficient headroom such that any reasonably possible

change to the key assumptions would not result in an impairment of the related goodwill.

No impairment loss was identified.

Impairment testing: Intangible assets

Due to the performance of the cardfactory Online CGU, an impairment test in respect of this

CGU was carried out at 31 January 2025.

The total carrying amount of the cardfactory Online CGU for impairment testing purposes,

inclusive of liabilities that are necessarily considered in determining the recoverable amount,

at 31 January 2025 was not material individually.

The key assumptions are consistent with those set out above in respect of the goodwill

impairment review, with the exception of foreign exchange rates which are not significant to

the analysis for this CGU. To ensure the analysis fairly reflected the expected value in use of

the assets within this CGU, the estimated future cash flows included all costs to complete the

assets under development and sales associated with those assets once deployed into use.

The cardfactory Online valuation indicated sufficient headroom such that any reasonably

possible change in assumptions would not result in a material impairment charge.

11 Property, plant and equipment

			Plant,
			equipment,
	Freehold	Leasehold	fixtures &
	property	improvements	vehicles	Total
	£’m	£’m	£’m	£’m
Cost
At 1 February 2024	22.6	40.8	95.7	159.1
Additions	0.1	–	11.3	11.4
Acquisitions (note 29)	–	–	0.2	0.2
Disposals	–	–	(0.7)	(0.7)
At 31 January 2025	22.7	40.8	106.5	170.0
Depreciation
At 1 February 2024	5.3	40.0	67.9	113. 2
Depreciation in the period	0.4	0.4	7.9	8.7
Depreciation on disposals	–	–	(0.6)	(0.6)
At 31 January 2025	5.7	40.4	75.2	121.3
Net book value
At 31 January 2025	17.0	0.4	31.3	48.7
At 31 January 2024	17. 3	0.8	27. 8	45.9

As at 31 January 2025, the Group held £nil assets under construction within Plant, equipment,

fixtures & vehicles (FY24: £2.2 million). These assets do not depreciate until brought into use.

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11 Property, plant and equipment continued

			Plant,
			equipment,
	Freehold	Leasehold	fixtures &
	property	improvements	vehicles	Total
	£’m	£’m	£’m	£’m
Cost
At 1 February 2023	18.6	40.8	78.2	137.6
Additions	1.3	–	17. 5	18.8
Acquisitions	2.7	–	–	2.7
At 31 January 2024	22.6	40.8	95.7	159.1
Depreciation
At 1 February 2023	4.9	39.0	61.5	105.4
Depreciation in the period	0.4	1.0	6.2	7.6
Impairment in the period	–	–	0.2	0.2
At 31 January 2024	5.3	40.0	67.9	113. 2
Net book value
At 31 January 2024	17.3	0.8	27.8	45.9
At 31 January 2023	13.7	1.8	16.7	32.2

12 Leases

The Group has lease contracts, within the definition of IFRS 16 leases, in relation to its entire

Store lease portfolio, some warehousing locations and motor vehicles. Other contracts,

including distribution contracts and IT equipment, are deemed not to be a lease within the

definition of IFRS 16 or are subject to the election not to apply the requirements of IFRS 16 to

short-term or low value leases.

Right of use assets

	2025	2024
	£’m	£’m
Buildings	109.4	98.2
Motor Vehicles	0.8	1.0
	110.2	99.2

The right-of-use assets movement in the year is as follows:

	2025	2024
	£’m	£’m
At the beginning of the year	99.2	100.5
Acquisitions	0.1	1.9
Additions:
Buildings	47.5	32.0
Motor vehicles	0.3	1.2
Disposals	(1.0)	(0.7)
Depreciation charge:
Buildings	(35.7)	(35.4)
Motor vehicles	(0.6)	(0.5)
Net impairment reversal	0.4	0.2
At the end of the year	110.2	99.2

Disposals and depreciation on disposals include fully depreciated right of use assets in respect

of expired leases where the asset remained in use whilst a lease renewal was negotiated. The

net impairment reversal and disposals above relate entirely to Buildings.

Impairment Testing: Store assets

Reflecting continued macro-economic uncertainty, cost inflation and the existence of a small

number of loss-making stores within the portfolio, the Group considers that an indicator of

potential impairment exists in respect of the store portfolio and, accordingly, an impairment

review of the Group’s store assets was undertaken in the 2025 financial year.

For this purpose, each of the Group’s stores is considered to be a CGU, with each store’s

carrying amount determined by assessing the value of right-of-use assets and property, plant

and equipment insofar as they are directly allocable to an individual store. The assessment of

whether an indicator of impairment may exist in respect of store assets is considered across

the store portfolio and not on a store-by-store basis. Accordingly, the store impairment review

considers all stores in the portfolio.

The recoverable amount of each store was determined based on the expected future cash

flows applicable to each store, assessed using a basis consistent with the future cash flows

used in the goodwill impairment test described in note 10, but limited to the term of the

current lease as assessed under IFRS 16. As a result, the key assumptions are also considered

to be consistent with those described in note 10, in addition to the allocation of central and

shared costs to individual stores insofar as such an allocation can be made on a reasonable

and consistent basis. Such costs are allocated on the basis of the relative contribution of each

individual store.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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12 Leases continued

Impairment Testing: Store assets continued

Application of these assumptions resulted in a net impairment reversal of £0.4m (2024: £nil),

comprised of impairment charges of £1.8 million (2024: £2.7 million) and the reversal of

previous impairment charges of £2.2 million (2024: £2.7 million). The net impairment charge in

the current year included a net reversal to impairment on Right of use assets of £0.4m and a

net impairment charge to PPE of £nil.

Having conducted scenario analysis, the Group does not consider any reasonably possible

change in the key assumptions would result in a material change to the net impairment position.

Lease liabilities

	2025	2024
	£’m	£’m
Current lease liabilities	(21.7)	(25.3)
Non-current lease liabilities	(88.7)	(75.5)
Total lease liabilities	(110.4)	(100.8)

Lease expense

	2025	2024
	£’m	£’m
Depreciation expense on right of use assets	36.3	35.9
(Reversal of impairment) / impairment of right of use assets	(0.4)	(0.2)
Profit on disposal of right of use assets	–	(1.2)
Lease interest	8.0	6.3
Expense relating to short-term and low value leases 1	–	–
Expense relating to variable lease payments 2	0.2	0.6
Total lease related income statement expense	44.1	41.4

1 Contracts subject to the election not to apply the requirements of IFRS 16 to short-term or low value leases.

2 A small proportion of the store lease portfolio are subject to an element of turnover linked variable rents that are

excluded from the definition of a lease under IFRS 16.

Disposals and depreciation/impairment on disposals includes fully depreciated right-of-use

assets where the lease term has expired, including amounts in respect of leases that have

expired but the asset remained in use whilst a new lease was negotiated. Profits on disposal

arise where leases that have been exited before the end of the lease term where the asset has

been previously impaired. The Group’s full accounting policy in respect of leases and right-of-

use assets is set out in note 1.

13 Deferred tax assets and liabilities

Deferred tax is the tax expected to be payable or recoverable on differences between the

carrying amount of an asset or liability in the financial statements and the corresponding tax

bases used in the computation of taxable profit/loss.

Movement in deferred tax during the year:

			Derivative
			financial
			instruments		Other
		Share–based	and hedge		temporary
	Fixed assets	payments	accounting	Tax losses	differences	Total
	£’m	£’m	£’m	£’m	£’m	£’m
At 31 January 2023	0.6	1.4	(1.1)	–	1.2	2.1
Acquisition of subsidiary	0.1	–	–	–	–	0.1
Credit/(charge) to income statement	(2.4)	–	–	–	0.3	(2.1)
Credit to other comprehensive income	–	–	0.7	–	–	0.7
Credit/(Charge) to equity	–	(0.2)	0.6	–	–	0.4
At 31 January 2024	(1.7)	1.2	0.2	–	1.5	1.2
Prior year adjustment	(0.6)	–	–	–	(1.1)	(1.7)
Credit/(charge) to income statement	(0.5)	0.3	–	0.6	(0.2)	0.2
(Charge) to other comprehensive income	–	–	(0.4)	–	–	(0.4)
(Charge) to equity	–	(0.1)	–	–	–	(0.1)
At 31 January 2025	(2.8)	1.4	(0.2)	0.6	0.2	(0.8)

Deferred tax assets and liabilities are offset to the extent they are levied by the same tax

authority and the Group has a legally enforceable right to do so, otherwise they are shown

separately in the balance sheet. The Deferred tax asset for tax losses of £0.6 million has been

recognised separately as it relates to losses in South Africa which has no expiry date. Deferred

tax assets and liabilities are arising in the UK offset as follows:

	2025	2024
	£’m	£’m
Deferred tax assets	1.6	2.9
Deferred tax liabilities	(3.0)	(1.7)
Net deferred tax (liability)/asset	(1.4)	1.2

The Group measures deferred tax assets and liabilities at the current rate of UK corporation

tax, 25% or the relevant local tax authority rate where there is no right to offset.

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14 Inventories

	2025	2024
	£’m	£’m
Finished goods	60.5	49.5
Work in progress	0.6	0.5
	61.1	50.0

Inventories are stated net of provisions totalling £8.2 million (2024: £9.6 million). The cost

of inventories recognised as an expense and charged to cost of sales in the year, net of

movements in provisions, was £162.8 million (2024: £155.8 million). Inventory has increased

in 2025, in part this is due to mix of inventory with a higher proportion of non-card stock

increasing the cost per unit of inventory.

15 Trade and other receivables

	2025	2024
	£’m	£’m
Current
Trade receivables	7.4	3.1
Other receivables	0.4	0.2
Prepaid property costs	5.0	3.8
Other prepayments	4.2	4.5
	17.0	11.6

The Group has net US Dollar denominated trade and other receivables of £3.0 million (2024:

£0.3 million), net South African Rand denominated trade and other receivables of £2.7 million

(2024: £2.3 million) and net Euro denominated trade and other receivables of £0.9 million

(2024: £nil). Trade receivables in 2025 include £2.4 million related to subsidiaries acquired in

2025 and we have also observed an increase in receivables as a result of the expansion of our

retail partnerships.

Group revenue is principally attributable to the retail sale of cards, dressings and gifts subject

to a single performance obligation fulfilled by receipt of goods at the point of payment

with minimal returns and refunds. Retail revenue is recognised at the point the customer is

deemed to have taken delivery of the goods. Revenue attributable to online sales is recognised

on delivery of goods to the customer.

Revenue attributable to retail partners and non-retail customers currently represents a relatively

small percentage of Group revenue and revenue is typically recognised at a point in time based

on a single performance obligation supplying standard Group products. The single performance

obligation varies by Partnership agreement, including from the point of dispatch to the point

of delivery to the end customer. For a portion of sales to retail partners in the Group, the

customers takes the title for goods at the point of dispatch from the supplier’s facility, revenue is

recognised at this point for such sales as all performance obligations are fulfilled.

Trade receivables are attributable to retail partnerships and non-retail sales which generated

revenue of £22.2 million (2024: £17.0 million) in the year. Payment terms for retail partners are

typically 30-90 days from invoicing. No material impairment loss has been recorded against

trade receivables.

16 Cash and cash equivalents

	2025	2024
	£’m	£’m
Cash at bank and in hand	16.5	11.3
Cash presented as current assets in the balance sheet	16.5	11. 3
Bank overdraft	–	(0.2)
Overdraft presented as current liabilities in the balance sheet	–	(0.2)
Net cash and cash equivalents	16.5	11.1

The Group manages its liquidity requirements on a Group-wide basis and regularly sweeps

and pools cash in order to optimise returns and / or ensure the most efficient deployment of

borrowing facilities in order to minimise fees, whilst maintaining sufficient short-term liquidity

to meet its liabilities as they fall due.

Cash in bank accounts and overdrafts are presented net where the Group has a legal right and

has intention to offset amounts – such as those with the same banking provider or included in

netting arrangements under its financing facilities.

The Group’s cash and cash equivalents are denominated in the following currencies:

	2025	2024
	£’m	£’m
Sterling	8.5	6.8
Euro	2.5	3.3
US Dollar	5.0	1.2
South African Rand	0.5	(0.2)
	16.5	11.1

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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17 Borrowings

	2025	2024
	£’m	£’m
Current liabilities
Bank loans and accrued interest	0.1	6.9
Bank overdraft	–	0.2
Total current liabilities	0.1	7.1
Non-current liabilities
Bank loans	73.9	37.9

Bank loans

Bank borrowings as at 31 January 2025 are summarised as follows:

			Interest
			margin
	Liability	Interest rate	ratchet range
	£’m	%	%
31 January 2025
Secured revolving				Total facility size
credit facility	75.0	Margin + SONIA	1.90 – 2.80	= £125 million
Property mortgage	0.4
Debt issue costs	(1.4)
	74.0
31 January 2024
Secured term loans – Tranche ‘B’	18.8	5.50 + SONIA	–
Secured revolving				Total facility size
credit facility	26.0	Margin + SONIA	2.75 – 4.50	= £100 million
Accrued interest	0.1
Property mortgage	0.6
Bank overdraft	0.2
Debt issue costs	(0.7)
	45.0

On 26 April 2024, the Group entered into an updated £125 million revolving credit facility.

The new facilities have an initial maturity date in April 2028, with options to extend by up to

19 months, subject to lender approval. The facilities include a £75 million accordion, which can

be drawn subject to lender approval. The interest margin on the facilities is dependent upon

the Group’s leverage position, with margins between 1.9-2.8% which is lower than the previous

facilities. At 31 January 2025, net debt (excluding lease liabilities) was £58.9 million, the Group

had £48.8 million of undrawn RCF facility and £1.2 million of reserved ancillary facilities.

The new facilities include covenants for a maximum leverage ratio (calculated as net debt

excluding leases divided by EBITDA less rent costs for the prior 12 months) of 2.5x and a fixed

charge cover ratio of at least 1.75x. The Group expects to operate comfortably within these

covenant levels for the foreseeable future.

As part of the transaction to acquire SA Greetings in FY24, the Group acquired a property

mortgage and overdraft facility, which are denominated in South African Rand. At 31 January

2025 the overdraft was undrawn and the carrying amount of the mortgage facilities was £0.4

million (2024: £0.2 million and £0.6 million respectively).

Debt issue costs in respect of the April 2024 refinancing totalled £1.6 million and are being

amortised to the income statement over the duration of the revised facilities.

18 Trade and other payables

	2025	2024
	£’m	£’m
Current
Trade payables	20.7	25.1
Other taxation and social security	21.4	21.8
Property accruals	5.5	7.4
Payroll accruals	8.9	12.8
Other accruals	20.3	13.0
	76.8	80.1

The Group has net US Dollar denominated trade and other payables of £15.8 million

(2024: £10.1 million), net South African Rand denominated trade and other payables of

£1.3 million (2024: £1.2 million) and net Euro denominated trade and other payables of

£0.1 million (£2024: £nil). Trade payables have reduced at 31 January 2025 compared to the

previous year largely based on timing of payment runs at the end of the period.

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19 Share capital and share premium

	2025	2024
	(Number)	(Number)
Share capital
Allotted, called up and fully paid ordinary
shares of one pence:
At the start of the period	345,576,361	342,636,090
Issued in the period (note 25)	2,428,355	2,940,271
At the end of the period	348,004,716	345,576,361

	2025	2024
	£’m	£’m
Share capital
At the start of the period	3.5	3.4
Issued in the period (note 25)	–	0.1
At the end of the period	3.5	3.5

	£’m	£’m
Share premium
At the start of the period	202.7	202.2
Issued in the period (note 25)	0.5	0.5
At the end of the period	203.2	202.7

Shares issued in the period relate entirely to those issued upon vesting of employee share

schemes. See note 25.

20 Notes to the cash flow statement

Reconciliation of operating profit to cash generated from operations:

	2025	2024
	£’m	£’m
Profit Before Tax	64.1	65.6
Gain on bargain purchase	–	(2.6)
Net finance expense	15.2	13.4
Operating profit	79.3	76.4
Adjusted for:
Depreciation and amortisation	48.5	46.3
Reversal of impairment of right-of-use assets	(0.4)	(0.2)
Impairment of tangible assets	–	0.2
Impairment of intangible assets	–	1.1
Gain on disposal of fixed assets	–	(1.2)
Cash flow hedging foreign currency movements	(1.9)	(0.4)
Unrealised foreign exchange (gains) / losses	(0.1)	0.5
Share-based payments charge	2.3	2.1
Operating cash flows before changes in working capital	127.7	124.8
(Increase)/decrease in receivables	(3.3)	3.6
(Increase)/decrease in inventories	(11.2)	(1.2)
(Decrease) in payables	(4.1)	(6.5)
Movement in provisions	(3.5)	(2.0)
Cash inflow from operating activities	105.6	118.7

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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21 Analysis of net debt

	At 1 February		Non-cash	At 31 January
	2024	Cash flow	changes	2025
	£’m	£’m	£’m	£’m
Secured bank loans and accrued
interest (note 17)	(44.8)	(23.6)	(5.6)	(74.0)
Lease liabilities	(100.8)	45.6	(55.2)	(110.4)
Total debt	(145.6)	22.0	(60.8)	(184.4)
Add: debt costs capitalised	(0.7)	(1.6)	0.9	(1.4)
Add: bank overdraft	(0.2)	0.2	–	–
Less: cash and cash equivalents (note
16)	11. 3	5.2	–	16.5
Net debt	(135.2)	25.8	(59.9)	(169.3)
Lease liabilities	100.8	(45.6)	55.2	110.4
Net debt excluding lease liabilities	(34.4)	(19.8)	(4.7)	(58.9)

	At 1 February		Non-cash	At 31 January
	2023	Cash flow	changes	2024
	£’m	£’m	£’m	£’m
Secured bank loans and accrued
interest (note 17)	(65.7)	30.1	(9.2)	(44.8)
Lease liabilities	(105.4)	43.7	(39.1)	(100.8)
Total debt	(171.1)	73.8	(48.3)	(145.6)
Add: debt costs capitalised	(1.4)	–	0.7	(0.7)
Add: bank overdraft	(1.8)	1.8	(0.2)	(0.2)
Less: cash and cash equivalents (note
16)	11.7	(0.4)	–	11.3
Net debt	(162.6)	75.2	(47.8)	(135.2)
Lease liabilities	105.4	(43.7)	39.1	100.8
Net debt excluding lease liabilities	(57.2)	31.5	(8.7)	(34.4)

Non-cash changes in respect of lease liabilities reflect changes in the carrying amount of

leases arising from additions, disposals and modifications.

22 Provisions

	Covid-19-	Property	Restructuring
	related support	provisions	provision	Total
	£’m	£’m	£’m	£’m
At 1 February 2023	7.4	2.1	–	9.5
Provisions utilised during the year	–	(0.2)	–	(0.2)
Provisions released during the year	(2.0)	0.2	–	(1.8)
Amounts provided during the year	–	–	–	–
At 31 January 2024	5.4	2.1	–	7. 5
Acquisitions	–	0.6	–	0.6
Provisions utilised during the year	(3.3)	(0.3)	–	(3.6)
Provisions released during the year	–	(0.8)	–	(0.8)
Amounts provided during the year	–	0.5	1.2	1.7
At 31 January 2025	2.1	2.1	1.2	5.4

Covid-19-related support provisions reflect amounts received under one-off schemes designed

to provide support to businesses affected by Covid-19 restrictions, including lockdown grants

and CJRS, in excess of the value the Group reasonably believes it is entitled to retain under

the terms and conditions of those schemes. The provisions have been estimated based on

the Group’s interpretation of the terms and conditions of the respective schemes and, where

applicable, independent professional advice.

A partial settlement of these amounts was paid in April 2024 amounting to £3.3 million.

The Group continues to hold discussions regarding settlement of the remaining element

of the provision. The Group has not obtained any information that changes its assessment

of the valuation of the remaining provision at 31 January 2025. The Group believes a range of

reasonably possible outcomes remains and that the Group’s provision reflects a reasonable

assessment of the amount that may be repayable. The Group does not believe that any

position within the range of reasonably possible outcomes would reflect a material change to

the provision held at the balance sheet date and this provision is classified as current as the

Group is actively aiming to resolve this settlement in the next 12 months.

We have incurred one-off costs relating to a restructuring programme associated with the

closure of the Getting Personal website and streamlining central support operations and as

a result have recognised a provision for £1.2 million. The total one-off costs related to the

restructuring are £1.9 million with £0.7 million recognised as a provision within inventories.

The Group maintains provisions in respect of its store portfolio to cover both the estimated cost

of restoring properties to their original condition upon exit of the property and any non-lease

components of lease contracts (such as service charges) that may be onerous. Despite the size

of the Group’s store portfolio, such provisions are generally small which is consistent with the

Group’s experience of actual dilapidations and restoration costs. Specific provisions are usually

made where the Group has a reasonable expectation that the related property may be exited,

or is at a higher risk of exiting, in the near future and are generally expected to be utilised in the

short-term. Any non-current portion of the provision is considered immaterial.

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23 Financial risk management

The principal financial risks faced by the Group are liquidity, foreign currency, interest rate and

counterparty credit risk.

The Board have overall responsibility for managing risks and uncertainties across the Group.

The principal financial risks and uncertainties and the actions taken to mitigate them are

reviewed on an ongoing basis. Further details of the Group’s approach to managing risk are

included in the Principal Risks and Uncertainties section of the Strategic Report on pages 69 to

73 and in the Corporate Governance Report on pages 80 to 86.

Liquidity risk

The Group has continued to generate significant operating cash inflows. Cash flow forecasts

are prepared to assist management in identifying future liquidity requirements. At the

balance sheet date, the Group had net debt (note 21) of £58.9 million (2024: £34.4 million) and

undrawn RCF facility of £48.8 million (see note 17).

On 26 April 2024, the Group entered into an updated £125 million revolving credit facility (see

note 17). The new facilities have an initial maturity date in April 2028, with options to extend

by up to 19 months, subject to lender approval. The facilities include a £75 million accordion,

which can be drawn subject to lender approval.

The table below analyses the contractual cash flows of the Group’s non-derivative financial

liabilities as at the balance sheet date. The amounts disclosed in the tables are the contractual

undiscounted cash flows, including contractual interest. Where amounts are not yet fixed,

principally in respect of interest payments linked to SONIA in the Group’s bank facilities, the

values have been determined with reference to forward curves at the balance sheet date.

	Less than one	One to two	Two to five	More than five
	year	years	years	years	Total
	£’m	£’m	£’m	£’m	£’m
At 31 January 2025
Bank loans	0.1	0.1	75.2	–	75.4
Lease liabilities	29.0	35.0	56.3	6.7	127.0
Trade and other payables	76.8	–	–	–	76.8
	105.9	35.1	131.5	6.7	279.2
At 31 January 2024
Bank loans	8.5	38.3	–	–	46.8
Lease liabilities	29.5	29.7	49.4	6.9	115.5
Trade and other payables	80.1	–	–	–	80.1
	118.1	68.0	49.4	6.9	242.4

The table below analyses the contractual cash flows of the Group’s derivative financial

instruments as at the balance sheet date. The amounts disclosed represent the total

contractual undiscounted cash flows at the balance sheet date exchange and interest rates.

	Less than one	One to two	Two to five	More than five
	year	years	years	years	Total
	£’m	£’m	£’m	£’m	£’m
At 31 January 2025
Foreign exchange
contracts
– Inflow	60.4	26.6	4.8	–	91.8
– Outflow	(58.3)	(25.2)	(4.6)	–	(88 .1)
Interest rate contracts
– Inflow	–	–	–	–	–
– Outflow	–	–	–	–	–
At 31 January 2024
Foreign exchange
contracts
– Inflow	63.6	28.3	–	–	91.9
– Outflow	(64.5)	(28.1)	–	–	(92.6)
Interest rate contracts
– Inflow	0.1	–	–	–	0.1
– Outflow	–	(0.1)	–	–	(0.1)

Foreign currency risk

The Group has an exposure to foreign currency risk due to a significant proportion of the

Group’s retail products being procured from overseas suppliers with purchases denominated

in US Dollars. The Group has an established currency hedging policy, reviewed annually, which

aims to mitigate the risk of adverse currency movements whilst providing sufficient flexibility

and available credit lines to act when markets are volatile.

The Group’s policy requires forward cover, using a combination of currency on hand, expected

receipts and derivative contracts, of between 50% and 100% of the next 12 months’ rolling

forecast US Dollar requirements, between 25% and 75% forward cover for the period 12 to

24 months, and up to 50% for the period 24 to 36 months. The policy permits a proportion

of each year’s US Dollar requirement to be covered by structured options and similar

instruments.

The table below analyses the sensitivity of the Group’s US Dollar denominated financial

instruments to a 10 cent movement in the USD to GBP exchange rate at the balance sheet

date, holding all other assumptions constant.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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23 Financial risk management continued

Foreign currency risk continued

		2025		2024
		Impact on cash		Impact on cash
	Impact on	flow hedging	Impact on	flow hedging
	profit after tax	reserve	profit after tax	reserve
	£’m	£’m	£’m	£’m
10 cent increase	(2.2)	(2.8)	(2.6)	(2.7)
10 cent decrease	2.6	3.3	3.0	3.2

The Group generates a small proportion of its total revenue in Euros as a result of its

operations in the Republic of Ireland. Euro receipts are used to settle obligations denominated

in Euros or are converted to GBP using either spot or forward contracts to manage liquidity.

Interest rate risk

The Group’s principal interest rate risk arises from its long-term borrowings. Bank borrowings

are denominated in Sterling and are borrowed at floating interest rates (see note 17). The

Group has an established policy that permits the use of interest rate derivative financial

instruments to mitigate the interest rate risk on an element of these borrowing costs. Current

Group policy requires between 25% and 75% of forecast floating interest rate borrowings to

be hedged for the next 24 months, up to 50% for the period 24 to 36 months and up to 25%

for periods greater than 36 months.

The table below shows the impact on the reported results of a 50 basis point increase or

decrease in the interest rate for the year.

		2025		2024
		Impact on cash		Impact on cash
	Impact on	flow hedging	Impact on	flow hedging
	profit after tax	reserve	profit after tax	reserve
	£’m	£’m	£’m	£’m
50 basis point interest rate increase	(0.3)	–	(0.3)	0.1
50 basis point interest rate decrease	0.3	–	0.3	(0.1)

Counterparty credit risk

The Group is exposed to counterparty credit risk on its holdings of cash and cash equivalents

and derivative financial assets. To mitigate the risk, counterparties are limited to high credit-

quality financial institutions and exposures are monitored on a monthly basis. Sterling cash

balances have historically been maintained at near zero or overdrawn within the facility

to minimise interest expense on the RCF, thereby reducing counterparty credit risk on

cash balances.

The Group is also exposed to counterparty credit risk in relation to certain payments

in advance of goods to overseas suppliers. To limit this exposure, goods from overseas

suppliers are not paid until after shipment, except for a limited number of deposit payments

in prepayments.

Credit risk in respect of trade receivables on revenues from retail partners and non-retail

customers, and other receivables and prepayments, is not significant to the Group. Revenues

from retail partners and non-retail customers represented £22.2 million in the year (2024:

£14.5 million) and trade receivables at 31 January 2025 were £7.4 million (2024: £3.1 million).

Total trade and other receivables at 31 January 2025 are £17.0 million (2024: £11.6 million).

The Group considers expected credit losses as not material and no material impairment

allowances have been recognised in respect of credit risk.

Capital management

The Group is disciplined in its management of capital, which is achieved through its Capital

Allocation Policy. The aim of the updated policy is to balance delivery of sustainable, long-

term growth in shareholder value against cash returns to shareholders and the needs of the

Group’s other stakeholders. Each year, the Group will assess the appropriate use of free cash

after allocating funds to investments that will deliver the stated strategy.

The Group is committed to a transparent, systemic and disciplined use of cash. The Board

will, as part of its annual planning cycle, review investment opportunities and allocate capital

between strengthening the balance sheet, investment to deliver the strategy and returns to

shareholders. At 31 January 2025, our capital allocation policy is unchanged and the Board

has proposed a final dividend of 3.6 pence per share in respect of the 2025 financial year

(see note 8).

The Group defines capital as equity attributable to the equity holders of the parent plus net

debt. Net debt is shown in note 21.

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23 Financial risk management continued

Capital management continued

The Board monitors the Group’s capital structure principally through reviewing free cash

generation and Adjusted Leverage – the ratio of net debt (excluding lease liabilities) to EBITDA

(after deducting rent-related costs). The Group’s target is to maintain a maximum Adjusted

Leverage position of 1.5 times.

Details on Group borrowings are set out in note 17 of the consolidated financial statements.

The Group has a continued focus on free cash flow generation. The Board monitors a range

of financial metrics together with banking covenant ratios, maintaining suitable headroom to

ensure that the Group’s financing requirements continue to be serviceable.

Further detail regarding covenant restrictions and liquidity forecasts are provided in notes 1

and 17.

24 Financial instruments

Fair value

IFRS 13 requires categorisation of the Group’s financial instruments, where measured at fair

value, in accordance with the fair value hierarchy to illustrate the basis upon which the fair

value has been determined:

• Level 1: fair value measurements are derived from quoted prices in active markets for

identical assets or liabilities;

• Level 2: fair value measurements are based on inputs other than quoted prices included

within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or

indirectly (i.e. derived from prices); and

• Level 3: fair value measurements derived from valuation techniques that use inputs that

are not based on observable market data (unobservable inputs).

The fair value of the Group’s foreign currency and interest rate derivative financial instruments

are largely determined by comparison between forward market prices and the contract price;

therefore, these contracts are categorised as Level 2.

Derivative financial instruments

The balance sheet date fair value of derivative financial instruments is as follows:

	2025	2024
	£’m	£’m
Derivative assets
Non-current
Interest rate contracts	–	–
Foreign exchange contracts	0.9	0.6
	0.9	0.6
Current
Interest rate contracts	–	0.2
Foreign exchange contracts	2.4	0.7
	2.4	0.9
Derivative liabilities
Current
Interest rate contracts	–	(0.1)
Foreign exchange contracts	(0.3)	(1.6)
	(0.3)	(1.7)
Non-current
Interest rate contracts	–	(0.1)
Foreign exchange contracts	(0.4)	(0.7)
	(0.4)	(0.8)
Net derivative financial instruments
Interest rate contracts	–	–
Foreign exchange contracts	2.6	(1.0)
	2.6	(1.0)

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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24 Financial instruments continued

Interest rate contracts

At 31 January 2025 the Group held fixed for floating SONIA interest rate swaps to hedge a

portion of the variable interest rate risk on bank borrowings. Notional principal amounts for

interest hedges totalled £10.0 million for the period to October 2025 at an average fixed rate

of 5.1% (2024: £20.0 million for the period to October 2024, then reducing to £10 million for

the period to October 2025).

Unhedged fair value movements of £nil (2024: £nil) were expensed to the income statement

within financial expense.

Foreign exchange contracts

At 31 January 2025 the Group held a portfolio of foreign currency derivative contracts with

notional principal amounts in GBP totalling £88.1 million (2024: £92.6 million) to mitigate the

exchange risk on future US Dollar denominated trade purchases.

Foreign currency derivatives with a notional value of £39.7 million were designated in

cash flow hedging relationships at 31 January 2025 (2024: £41.6 million). Of this amount,

£30.4 million is expected to unwind in the next 12 months with an average strike price of

1.28 and £9.3 million is expected to unwind between 13 and 24 months at an average strike

price of 1.29. The average strike prices reflect only those derivatives designated into hedging

relationships, and not the Group’s whole portfolio of currency purchase contracts.

Foreign currency derivative contracts with a notional value of £48.4 million representing a fair

value asset of £1.2 million (2024: £51.0 million representing a fair value liability of £0.3 million)

were not designated as hedging relationships.

Fair value movements in foreign currency derivatives are recognised in other comprehensive

income to the extent the contract is part of an effective hedging relationship. The fair value

movements of £1.5 million that do not form part of an effective hedging relationship have

been charged to the income statement (2024: £0.1 million) within cost of sales.

Classification of financial instruments

The table below shows the classification of financial assets and liabilities at the balance sheet

date. Fair value disclosures in respect of lease liabilities are not required.

			Financial	Financial
		Cash flow	assets at	liabilities at
	Mandatorily	hedging	amortised	amortised
	at FVTPL	instruments	cost	cost
At 31 January 2025	£’m	£’m	£’m	£’m
Financial assets measured at fair value
Derivative financial instruments	1.6	1.7	–	–
Financial assets not measured at fair value
Trade receivables	–	–	17.0	–
Cash and cash equivalents	–	–	16.5	–
Financial liabilities measured at fair value
Derivative financial instruments	(0.4)	(0.3)	–	–
Financial liabilities not measured at fair value
Secured bank loans	–	–	–	(74.0)
Unsecured bank overdrafts	–	–	–	–
Trade and other payables	–	–	–	(76.8)
	1.2	1.4	33.5	(150.8)
At 31 January 2024	£’m	£’m	£’m	£’m
Financial assets measured at fair value
Derivative financial instruments	0.9	0.6	–	–
Financial assets not measured at fair value
Trade receivables	–	–	3.1	–
Cash and cash equivalents	–	–	11.3	–
Financial liabilities measured at fair value
Derivative financial instruments	(1.2)	(1.3)	–	–
Financial liabilities not measured at fair value
Secured bank loans	–	–	–	(44.8)
Unsecured bank overdrafts	–	–	–	(0.2)
Trade and other payables	–	–	–	(80.1)
	(0.3)	(0.7)	14.4	(125.1)

The fair values of financial instruments have been assessed as approximating to their carrying

values. Derivative financial instruments are utilised to mitigate foreign exchange risk on the

requisition of inventory and interest rate risk on borrowings. Derivatives not designated as

a hedging relationship are mandatorily classified at FVTPL. Prepayments do not meet the

definition of Financial Instruments and as such are not disclosed in the above table.

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25 Equity-settled share-based payment arrangements

Card Factory Restricted Share Awards and Long Term Incentive Plan

The Company grants restricted share awards (‘RSAs’) to the Executive Directors, members of

the senior leadership team and senior employees within the Group under the terms of the

Group’s LTIP. Grants are made annually under the scheme, subject to approval by the Board.

The award comprises a right to receive free shares or nil cost options. The shares are to be

issued within 30 days, or as soon as practicable, after the vesting date. Grants awarded in the

year to Executive Directors, senior leaders and senior employees vest in stages over three,

four and five years and vested shares may not be sold (other than to pay taxes due on vesting)

until the end of the five-year period. Grants awarded in the year to senior employees are

subject to a three-year vesting period. All restricted share awards are subject to a performance

underpin through which the Remuneration Committee can exercise discretion to reduce the

number of awards that will vest based on certain defined criteria.

Grants awarded prior to 31 January 2018 under the LTIP were subject to a three-year vesting

period with performance conditions and a two-year holding period for awards in favour of

senior employees. Further details on Executive Director share awards are provided in the

Remuneration Report on pages 102 to 114.

Card Factory SAYE Scheme (‘SAYE’)

The SAYE scheme is open to all employees (in years prior to FY19 length of service eligibility

applied). Grants are made annually under the scheme, subject to approval by the Board.

Options may be exercised under the scheme within six months of the completion of the three-

year savings contract. There is provision for early exercise in certain circumstances such as

death, disability, redundancy and retirement.

Reconciliation of outstanding awards

		RSA/LTIP		SAYE
			Weighted		Weighted
		Number of	average	Number of	average
		options	exercise price	options	exercise price
Outstanding at 1 February 2023	6,	847,140	£0.01	5,192,229	£0.42
Granted during the year		2,162,869	£0.01	1,476,343	£0.72
Exercised during the year		(1,170,305)	£0.01	(1,769,966)	£0.27
Forfeited during the year		(210,756)	£0.01	(901,863)	£0.56
Outstanding at 31 January 2024		7,628,948	£0.01	3,996,743	£0.56
Granted during the year		2,480,692	£0.01	1,493,898	£0.75
Exercised during the year		(1,469,447)	£0.01	(958,908)	£0.50
Forfeited during the year		(791,808)	£0.01	(613,838)	£0.61
Outstanding at 31 January 2025		7,848,385	£0.01	3,917,895	£0.58

The weighted average remaining contractual for options under the SAYE scheme is 1.4 years

and under the RSA/LTIP scheme is 1.6 years.

Fair value of awards

The fair value of awards granted during the year has been measured using the Black-Scholes

model assuming the inputs below.

		2025		2024
	RSA/LTIP (1)	RSA/LTIP (2)	SAYE	RSA/LTIP (1)	SAYE
Granted during the year	2,431,769	48,923	1,493,898	2,162,869	1,476,343
Fair value at grant date	£0.93	£0.99	£0.46	£0.92	£0.43
Share price at grant date*	£0.93	£0.99	£1.12	£0.92	£0.87
Exercise price*	£0.01	£0.01	£0.75	£0.01	£0.72
Expected volatility	48%	43%	47%	63%	58%
Expected term (years)	3	1.25	3	3 to 5	3
Expected dividend yield	N/A**	N/A**	4%	N/A**	0%
Risk free interest rate	4.38%	4.24%	4.30%	4.32%	5.05%

* The exercise price for SAYE awards is set at a 20% discount to an average market price determined in accordance

with scheme rules. The share price at the grant date is the closing price on the grant date. The outstanding SAYE

awards as at 31 January 2025 have an exercise price ranging from £0.49 to £0.75.

** RSA/LTIP awards have a £0.01 exercise price (covered via a nominal bonus award from the Group) and accrue

dividend equivalents over the vesting period, consequently the fair value at grant date is equal to the grant date

share price.

The expected volatility is based on historical volatility of the Company over the expected term

at the grant date.

Impact on the income statement

The total expense recognised in the income statement arising from share-based payments is

as follows:

	2025	2024
All amounts exclude national insurance costs	£’m	£’m
RSA or LTIP	2.0	1.7
SAYE	0.3	0.4
Total share-based payment expense	2.3	2.1

26 Capital commitments

The Group had no material capital commitments at 31 January 2025 (2024: £nil).

27 Contingent liabilities

There were no material contingent liabilities at 31 January 2025 (2024: £nil).

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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28 Related party transactions

The Group has taken advantage of the exemptions contained within IAS 24 ‘Related Party

Disclosures’ from the requirement to disclose transactions between Group companies as

these have been eliminated on consolidation.

The Card Factory Foundation is considered a related party of the Group due to one common

individual considered as key management personnel. In the year ended 31 January 2025 the

Group donated £1.4 million (2024: £1.5m) to the Foundation from carrier bag sales and has an

outstanding balance owed to the Foundation of £0.1m at 31 January 2025 (2024: £0.5m).

A full listing of the Group’s subsidiary undertakings is provided in the notes to the Company

accounts on page 166.

Transactions with key management personnel

The key management personnel of the Group comprise the Card Factory plc Board of

Directors and the Executive Board. Disclosures relating to remuneration of key management

personnel are included in note 5 of the financial statements. Further details of Directors’

remuneration are set out in the Directors’ Remuneration Report on pages 102 to 114.

Directors of the Company and their immediate families control 0.2% of the ordinary shares

of the Company.

There were no other related party transactions in the year.

29 Business combinations

Business combinations are accounted for using the acquisition method. The identifiable assets

acquired and liabilities assumed are recognised at their fair values at the acquisition date.

Acquisition of SA Greetings

Following the end of the measurement period, the acquisition accounting for SA Greetings

(acquired in FY24) has been finalised. There were no adjustments to the provisional values

reported in the FY24 financial statements.

Acquisitions of Garlanna and Garven

During FY25, the Group acquired Garven Holdings LLC (‘Garven’) and Garlanna Holdings

Limited (‘Garlanna’). Acquisition-related costs totalling £0.7 million have been expensed and

included within operating expenses in the Consolidated Income Statement. These costs have

been excluded from adjusted PBT as they are one-off in nature and this can be seen in the

glossary on pages 169 to 172.

The purchase price allocation for the acquisitions of Garven Holdings and Garlanna Holdings

was prepared on a provisional basis in accordance with IFRS 3 with the fair values of the assets

and liabilities set in the table to the right.

	Garven	Garlanna	Total
	Holdings	Holdings	fair value
	£’m	£’m	£’m
Non-current assets	0.1	0.2	0.3
Property, plant & equipment	–	0.2	0.2
Right-of-use assets	0.1	–	0.1
Current assets	3.7	2.2	5.9
Inventories	0.2	1.0	1.2
Trade & other receivables	1.5	0.6	2.1
Cash at bank and in hand	2.0	0.6	2.6
Total assets	3.8	2.4	6.2
Current liabilities	(0.9)	(1.8)	(2.7)
Trade & other payables	(0.8)	(0.3)	(1.1)
Tax payable	–	(0.1)	(0.1)
Lease liabilities	(0.1)	–	(0.1)
Provisions	–	(1.4)	(1.4)
Total liabilities	(0.9)	(1.8)	(2.7)
Net assets of acquired subsidiaries	2.9	0.6	3.5
Add: Intangible assets (note 10)	10.0	2.9	12.9
Add: Goodwill (note 10)	8.7	–	8.7
Total consideration paid	21.6	3.5	25.1
Less cash acquired:	(2.0)	(0.6)	(2.6)
Net cash outflow	19.6	2.9	22.5

The gross contractual amounts related to trade & other receivables is £2.1 million and at the

acquisition date, the Group’s best estimate of the contracted cash flows not expected to be

collected is £nil.

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29 Business combinations continued

Acquisition of Garlanna

On 4 September 2024, the Group completed the acquisition of 100% of the share capital of

Garlanna Holdings Limited and its subsidiary companies (Garlanna).

Garlanna trades as a publisher and wholesale supplier of cards, wrap and gift bags in the

Republic of Ireland. The acquisition will strengthen the Group’s position within the Republic of

Ireland market and is expected to provide further wholesale opportunities, in particular in the

convenience sector where the Group previously has limited exposure.

The total cash consideration for the transaction was £3.5 million (€4.2 million), all of which

was paid in cash on the acquisition date, giving consideration of £2.9 million (€3.6 million)

on a cash free, debt free basis. The agreement included €0.2 million of deferred contingent

consideration but this has not and will not become payable due to the payment criteria not

being met and the period of consideration has expired.

We have made fair value adjustments to the assets and liabilities in the acquiree’s local

financial records in arriving at the provisional fair values as required by IFRS 3 which are

detailed below:

• Aligning Garlanna’s inventory provision with Group accounting policies – increasing the

provision by £0.6 million; and

• Recognising a provision (£0.6 million) in relation to costs expected to be incurred to return

leased property to its original state.

The fair value of the net assets acquired was £0.6 million. We have recognised £2.9 million

of identifiable intangible assets linked to the existing customer relationships in the acquired

business, see note (10) for further details. This gives a total fair value of net assets acquired of

£3.5 million, which is equal to the fair value of consideration paid resulting in no recognition

of goodwill.

Garlanna contributed revenue of £1.7 million and £0.4 million to the Group’s profit after tax

for the period between the date of acquisition and the reporting date. If the acquisition of

Garlanna had been completed on the first day of the financial year, Group revenues for the

year to 31 January 2025 would have been £546.3 million and Group profit after tax would have

been £48.3 million. Garlanna has a similar seasonal trading pattern to the rest of the Group

and generates the majority of its sales and profits in the second half of the financial year.

Acquisition of Garven

On 04 December 2024, the Group completed the acquisition of 100% of the members’ interest

of Garven Holdings, LLC and its subsidiary companies (“Garven”).

Garven trades as Garven Design and Cadence Packaging and is a leader in the design and

wholesale of gifts and celebration essentials, based in Minnesota, USA.

In line with cardfactory’s growth plan, this acquisition accelerates our partnerships strategy

in one of our key international target markets.

It marks cardfactory’s physical entry into the US gifts and celebration essentials market,

which represents the biggest market globally at circa £70 billion in total.

Garven has an established customer base of general and speciality retailers which will allow

cardfactory to further explore design and buying synergies, alongside opportunities to

introduce its own ranges into the US wholesale market. We consider that this is a key factor

in the recognition of goodwill related to this acquisition.

The total cash consideration for the transaction was £21.6 million ($27.5 million), all of

which was paid in cash on the acquisition date, giving consideration of £19.6 million

($25.0 million) on a cash free, debt free basis. There is no further contingent or deferred

consideration payable.

There were no fair value adjustments required by IFRS 3 made to the acquired assets and

liabilities in the acquiree’s local financial records in arriving at the provisional fair values.

The fair value of the net assets acquired is £2.9 million. We have recognised £10.0 million

of identifiable intangibles assets linked to the existing customer relationships in the acquired

business and acquired brands, see note 10 for further details. This gives a total fair value of

acquired assets of £12.9 million, which is lower than the fair value of the consideration paid

(Including cash acquired) of £21.6M, the balance has resulted in recognition of £8.7 million

of Goodwill which is not deductible for tax purposes.

Garven Holdings, LLC contributed revenue of £2.2 million and a profit of £0.2 million to the

Group’s profit after tax for the period between the date of acquisition and the reporting date.

If the acquisition of Garven had been completed on the first day of the financial year, Group

revenues for the year to 31 January 2025 would have been £568.7 million and Group profit

after tax would have been £50.5 million. Garven has a similar seasonal trading pattern to the

rest of the Group and generates the majority of its sales and profits in the second half of the

financial year.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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Company Information

PARENT COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 January 2025

Note

2025

£’m

2024

£’m

Non-current assets

Investments 4 316.2 316.2

Deferred tax assets 0.4 0.3

316.6 316.5

Current assets

Trade and other receivables 5 6.5 3.3

Total assets 323.1 319.8

Current liabilities

Trade and other payables 6 (3.3) (2.8)

Net assets 319.8 317.0

Equity

Share capital 7 3.5 3.5

Share premium 7 203.2 202.7

Merger reserve 2.7 2.7

Retained earnings 110.4 108.1

Equity attributable to equity holders of the parent 319.8 317.0

The company’s profit for the year to 31 January 2025 was £20 . 3 million (2024: loss of £2.3

million).

The financial statements on pages 163 to 168 were approved by the Board of Directors on

7 May 2025 and were signed on its behalf by

Matthias Seeger

Chief Financial Officer

Company number 09002747

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 January 2025

capital

£’m

premium

£’m

Merger

reserve

£’m

Retained

earnings

£’m

Total equity

£’m

At 31 January 2023 3.4 202.2 2.7 108.3 316.6

Total comprehensive income for

the year

Profit or loss – – – (2.3) (2.3)

Transactions with owners,

recorded directly in equity

Shares issued 0.1 0.5 – – 0.6

Share-based payments – – – 2.1 2.1

At 31 January 2024 3.5 202.7 2.7 108 .1 317.0

Total comprehensive income for

the year

Profit or loss – – – 20.3 20.3

Transactions with owners,

recorded directly in equity

Shares issued – 0.5 – – 0.5

Share-based payments – – – 2.3 2.3

Dividends* – – – (20.3) (20.3)

At 31 January 2025 3.5 203.2 2.7 110.4 319.8

* Dividends includes £0.5m of dividend equivalents payable on employee share awards.

The notes that accompany these financial statements are included on pages 164 to 168.

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Card Factory plc Annual Report and Accounts 2025

PARENT COMPANY CASH FLOW STATEMENT

For the year ended 31 January 2025

Note

2025

£’m

2024

£’m

Cash inflow/(outflow) from operating activities 10 19.3 (0.6)

Corporation tax paid – –

Net cash (outflow)/inflow from operating

activities 19.3 (0.6)

Cash flows from investing activities – –

Dividends paid 3 (19.8) –

Net cash inflow from investing activities (19.8) –

Cash flows from financing activities – –

Shares issued under employee share schemes 0.5 0.6

Net cash outflow from financing activities 0.5 0.6

Net increase in cash and cash equivalents – –

Cash and cash equivalents at the beginning of the

year – –

Closing cash and cash equivalents – –

The notes that accompany these financial statements are included on pages 164 to 168.

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

1 Accounting policies

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted International

Accounting Standards (‘UK IFRS’) and applicable law.

The financial statements have been prepared under the historical cost convention and on the

going concern basis. The Directors’ assessment of going concern is set out on page 119 of the

consolidated financial statements.

Significant judgements and estimates

The preparation of financial statements in conformity with UK IFRS requires the use of

judgements, estimates and assumptions that affect the application of the Company’s

accounting policies and reported amounts of assets and liabilities, income and expenses.

Actual results may differ from these estimates. Estimates and underlying assumptions are

reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The Company has not identified any significant judgements or areas of significant estimation

uncertainty in the current year. However, reflecting the degree of management focus, notes

the following in respect of impairment testing:

Investment in subsidiaries impairment testing

The impairment testing of investment in subsidiaries requires judgement in determining the

assumptions to be used to estimate the value-in-use, including estimates of future revenues,

operating costs, terminal value growth rates, the and the pre-tax discount rate to be applied.

Whether or not the estimation used in determining these assumptions is significant depends

upon the outcome of the assessment and the level of headroom in the analysis and sensitivity

to changes in those assumptions.

Further detail is provided in note 4 to the Company financial statements. There were no

reasonably possible changes in key assumptions in the impairment test performed that would

result in an impairment charge.

Principal accounting policies

The principal accounting policies set out below have been applied consistently to all periods

presented in these financial statements.

Changes in significant accounting policies

New standards and amendments to existing standards effective in the period, which are set

out in full on page 137 of the consolidated financial statements, have not had a material effect

on the Company’s financial statements.

UK endorsed standards and amendments issued but not yet effective

A full list of standards and amendments that are in issue but not yet effective is provided on

page 138 of the consolidated financial statements.

The adoption of these standards and amendments in future periods is not expected to have a

material impact on the Company’s financial statements.

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Company Information

1 Accounting policies continued

Income statement

The Company made a profit after tax of £20.9 million for the year ended 31 January

2025 (2024: £2.3 million loss), including £19.7 million dividends received from subsidiary

undertakings (2024: £nil). As permitted by section 408 of the Companies Act 2006, the income

statement of the Company is not presented as part of the financial statements.

Investments

Investments in subsidiary undertakings are held at cost less any provision for impairment.

Financial instruments

Non-derivative financial assets

Non-derivative financial assets comprise trade and other receivables classified as financial

assets at amortised cost. The trade and other receivables do not have a significant

financing component and are initially measured at transaction price. At each reporting date,

theCompany assesses whether financial assets carried at amortised cost are credit-impaired.

A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact

on the estimated future cash flows of the financial asset have occurred. The Company

measures loss allowances at an amount equal to lifetime expected credit loss.

Non-derivative financial liabilities

Non-derivative financial liabilities comprise trade and other payables. Trade and other

payables are initially recognised at fair value, less any directly attributable transaction costs

and subsequently stated at amortised cost using the effective interest method.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue

ofnew shares are shown in equity as a deduction from the proceeds.

Merger reserve

On 30 April 2014 Card Factory plc acquired 100% of the share capital of CF Topco Limited in

a share for share exchange, thereby inserting Card Factory plc as the Parent Company of the

Group. The shareholders of CF Topco Limited became 100% owners of the enlarged share

capital of Card Factory plc. The premium arising on the issue of shares is recognised in the

merger reserve.

Share-based payments

The Company issues equity-settled share-based payments to employees within the group

through the Card Factory Restricted Share Awards Scheme (‘RSA’) and the Card Factory SAYE

Scheme (‘SAYE’), see note 25 of the consolidated financial statements for further details.

Thecost of equity-settled share awards is measured as the fair value of the award at the grant

date using the Black-Scholes model.

The cost of awards to employees of the Company is expensed to the income statement

ofrelevant subsidiary companies, together with a corresponding adjustment to equity,

onastraight-line basis over the vesting period of the award. The cost of awards to employees

of subsidiary undertakings is immediately reimbursed by the subsidiary. The total cost of

the awards is based on the Company’s estimate of the number of share awards that will

eventually vest in accordance with the vesting conditions. The awards do not include market-

based vesting conditions. At each balance sheet date, the Company revises its estimate of the

number of awards that are expected to vest. Any revision to estimates is recognised in the

income statement, with a corresponding adjustment to equity. The expense recognised in the

Company income statement is subsequently charged to subsidiary entities to the extent that

management services are provided to those subsidiary entities.

Dividends

Dividends are recognised as a liability in the period in which they are approved such that the

Company is obliged to pay the dividend.

Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised

in the income statement except to the extent that it relates to items recognised directly in

equity or through other comprehensive income, in which case it is recognised in equity or

other comprehensive income respectively.

Current tax is the expected tax payable or receivable on the taxable income or loss for the

period, using tax rates enacted or substantively enacted at the balance sheet date. Deferred

tax is provided on temporary differences between the carrying amounts of assets and

liabilities for financial reporting purposes and the amounts used for taxation purposes.

Thefollowing temporary differences are not provided for: the initial recognition of goodwill;

the initial recognition of assets or liabilities that affect neither accounting nor taxable profit

other than in a business combination and differences relating to investments in subsidiaries

to the extent that they will probably not reverse in the foreseeable future. The amount of

deferred tax provided is based on the expected manner of realisation or settlement of the

carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at

the balance sheet date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits

will be available against which the temporary difference can be utilised.

2 Employee costs

The Company has no employees other than the Board of Directors. Full details of Directors’

remuneration are set out in the Directors’ Remuneration Report on pages 94 to 107.

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Card Factory plc Annual Report and Accounts 2025

3 Dividends

In June 2024, the Company paid a final dividend of 4.5 pence per share (totalling £15.6 million)

in respect of the FY24 financial year. This dividend represented the total dividend for FY24

(including an amount in lieu of an interim dividend) with interim dividends unable to be paid

during FY24 due to restrictions in the Company’s previous financing facilities that remained in

place until 31 January 2024.

FY25 final dividend

At the forthcoming Annual General Meeting, the Board will recommend to shareholders that

a resolution is passed to approve payment for a final dividend for the year ended 31 January

2025 of 3.6 pence per share, equivalent to approximately £12.5 million. The final dividend will

be payable to shareholders on the share register on 30 May 2025, with payments to be made

on 27 June 2025.

Dividends paid in the year:

Pence per

2025

£’m

2024

£’m

Final dividend for the year ended 31 January 2024 4.5p 15.6 –

Interim dividend for the year ended 31 January 2025 1.2p 4.2 –

Total dividends paid to shareholders in the year 19.8 –

Dividend equivalents totalling £0.1 million (2024: £0.4 million) were accrued in the year in

relation to share-based long-term incentive schemes.

4 Investments in subsidiaries

£’m

At 31 January 2024 and 31 January 2025 316.2

The Company evaluates its investments in subsidiary undertakings annually for any indicators

of impairment. Management have considered that there are no indicators of impairment

linked to the Company investment in subsidiaries. The Directors are satisfied that there is no

impairment of the investment in subsidiaries.

Subsidiary undertakings

At 31 January 2025 the Company controlled 100% of the issued ordinary share capital

ofthefollowing subsidiaries, all of which are included in the consolidated financial

statements. Allsubsidiaries are registered in England and Wales with the exception of

those subsidiaries listed with a different registered address as below. The registered office

of the Company is Century House, Brunel Road, Wakefield 41 Industrial Estate, Wakefield,

WestYorkshire,WF20XG.

Subsidiary undertaking Nature of business Registered office

CF Bidco Limited* Intermediate holding company Same as the Company

Sportswift Limited Sale of greeting cards and gifts Same as the Company

Printcraft Limited Printers Same as the Company

Getting Personal Limited Online sale of personalised

products and gifts

Same as the Company

Card Factory Ireland Limited Sale of greeting cards and gifts **

CF SA Holdings (Pty) Limited Intermediate holding company ***

SA Greetings Corporation (Pty) Ltd Intermediate holding company ***

SA Greetings (Pty) Limited Sale of greeting cards ***

CNA Properties (Baragwanath)

(Pty) Limited

Property Company ***

Funny Paper (Pty) Limited Dormant ***

Cardfactory US Holdings Inc. Intermediate holding company ****

Cardfactory US Holdings LLC Sale of greeting cards and gifts ****

Garlanna Holdings Limited Intermediate holding company *****

Garlanna Limited Sale of greeting cards and gifts *****

Garlanna (UK) Limited Sale of greeting cards and gifts Same as the Company

Garven Holding, LLC Intermediate holding company ****

Garven LLC Sale of gift bags, tags, wrapping

and gifts

******

Cadence Packaging Group LLC Sale of gifts bags and packaging *******

* Shares held directly. All other subsidiaries shares are held indirectly through subsidiary undertakings.

** 6th Floor, 2 Grand Canal Square, Dublin 2, Dublin, Republic of Ireland.

*** 2 Aeroton Road, Aeroton, Johannesburg 2013.

**** Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801

***** Greeting Card House, Rathnew Business Park, Rathnew, Co.Wicklow, Ireland, A67YO17

****** 1450 Northland Drive, Mendato Heights, MN 55120

******* Suite 200 4530 West 77th Street, Edina, MN 55435-5161

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

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Company Information

4 Investments in subsidiaries continued

Subsidiary undertakings continued

The entities listed below were formerly subsidiaries of the Company but have been dissolved

during the year to 31 January 2025.

Subsidiary undertaking Nature of business Registered office

Heavy Distance Limited+ Dormant Same as the Company

CF Topco Limited++ Dormant Same as the Company

CF Interco Limited++ Dormant Same as the Company

Short Rhyme Limited++ Dormant Same as the Company

Getting Personal Group Limited++ Dormant Same as the Company

Getting Personal (UK) Limited++ Dormant Same as the Company

Lupfaw 221 Limited++ Dormant Same as the Company

Sportswift Properties Limited++ Dormant Same as the Company

CF Midco Limited++ Dormant Same as the Company

+ This dormant legal entity was dissolved after the reporting date on 4 March 2025

++ These dormant legal entities were dissolved on 12 November 2024

5 Trade and other receivables

2025

£’m

2024

£’m

Amounts owed by Group undertakings 6.3 3.2

VAT recoverable – –

Prepayments and other debtors 0.2 0.1

6.5 3.3

Trade and other receivables of the Company principally relate to balances due on demand

from subsidiary undertakings. The Company has assessed the expected credit loss as very low

and has made no provision for impairment.

6 Trade and other payables

2025

£’m

2024

£’m

Amounts owed to Group undertakings – –

Trade payables 2.2 2.2

Accruals 1.1 0.6

3.3 2.8

7 Share capital and share premium

2025

(Number)

2024

(Number)

Share capital

Allotted, called up and fully paid ordinary

shares of one pence:

At the start of the period 345,576,361 342,636,090

Shares issued in the year 2,428,355 2,940,271

At the end of the period 348,004,716 345,576,361

2025

£’m

2024

£’m

Share capital

At the start of the period 3.5 3.4

Shares Issued in the year – 0.1

At the end of the period 3.5 3.5

2025

£’m

2024

£’m

Share premium

At the start of the period 202.7 202.2

Shares issued in the year 0.5 0.5

At the end of the period 203.2 202.7

The company has only one class of shares, which are ordinary shares of 1 pence each, carrying

no right to a fixed income. No shareholders have waived their rights to dividends.

During the 2025 financial year, 2,428,355 shares (2024: 2,940,271 shares) were issued in

satisfaction of options vesting in accordance with the rules of the Group’s employee share

schemes. Full details in respect of the Group’s employee share schemes, including remaining

options outstanding, are included in note 25 to the consolidated financial statements.

8 Financial risk management

The financial risk management strategy of the Company is consistent with the Group strategy

detailed in note 23 of the consolidated financial statements. Company exposure to liquidity,

interest rate, foreign exchange and credit risk are principally to the extent they impact the

trade of its subsidiary investments. Trade and other receivables of the Company principally

comprise amounts due from Group undertakings.

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9 Financial instruments

Classification of financial instruments.

Financial assets have all been classified as financial assets at amortised cost. Financial

liabilities have all been classified as other financial liabilities.

Maturity analysis

All financial instrument assets and liabilities fall due in less than one year.

Fair values

The fair values of financial instruments have been assessed as approximating to their carrying

values.

10 Notes to the cash flow statement

2025

£’m

2024

£’m

Profit/(Loss) before tax (excluding dividends received) 0.5 (1.3)

Dividends received 19.8 –

Operating profit/(loss) 20.3 (1.3)

Adjusted for:

Share-based payment charge 2.3 1.3

Operating cash flows before changes in working capital 22.6 –

(Increase)/decrease in receivables (3.3) 0.4

Increase/(decrease) in payables – (1.0)

Cash inflow/(outflow) from operating activities 19.3 (0.6)

The increase in payables stated above is adjusted to reflect amounts analysed elsewhere in

the cash flow statement, which are included within amounts owed to group undertakings

inthe statement of financial position.

11 Related party transactions

Amounts due to and from Group undertakings are set out in notes 5 and 6 of the financial

statements. Transactions between the Company and its subsidiaries were as follows:

2025

£’m

2024

£’m

Management services 2.0 2.1

Dividends received from Group undertakings 19.8 –

Inter-company working capital cash flows from Group

undertakings 3.1 2.1

Transactions with key management personnel

The key management personnel of the Company comprise the Card Factory plc Board of

Directors. Disclosures relating to Directors’ remuneration are set out in the Remuneration

Report on pages 94 to 107. Directors of the Company control 0.02% of the ordinary shares of

the Company.

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

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Company InformationStrategic Report Governance Company Information

169

Financial Statements

GLOSSARY

Alternative Performance Measures (APMs) and other

explanatoryinformation

In the reporting of the consolidated financial statements, the Directors have adopted various

Alternative Performance Measures (APMs) of financial performance, position or cash flows

other than those defined or specified under International Accounting Standards (IFRS).

These measures are not defined by IFRS and therefore may not be directly comparable with

other companies’ APMs, including those in the Group’s industry or that appear to have similar

titles or labels. APMs should be considered in addition to IFRS measures and are not intended

to be a substitute for IFRS measurements.

The Directors believe that these APMs provide additional useful information on the

performance and position of the Group and are intended to aid the user in understanding the

Group’s results.

The APMs presented are consistent with measures used internally by the Board and

management for performance analysis, planning, reporting and incentive settingpurposes.

In FY25 we have broadened our adjustments to the P&L and cash flow to aid clarity and

consistency in understanding measures that are relevant to our capital allocation policy.

The table below sets out the APMs used in this report, with further information regarding the

APM, and a reconciliation to the closest IFRS equivalent measure, below.

Sales APMs Like-for-like sales (LFL)

Profitability APMs EBITDA

Adjusted Profit Before Tax (PBT)

Adjusted EPS

Financial position APMs Net Debt

Leverage and Adjusted Leverage

Cash flow APMs Operating Cash Conversion

Free cash flow

Following the approval of the Group’s updated capital allocation policy, Adjusted Leverage

and Adjusted EPS have been included in this report for the first time. These measures play an

important role in the Group’s capital allocation decisions.

Sales APMs

LFL Sales

Closest IFRS Equivalent: Revenue.

Like-for-like or LFL calculates the growth or decline in gross sales in the current period versus

a prior comparative period.

For stores, LFL measures exclude any sales earned from new stores opened in the current

period or closed since the comparative period and only consider the time period where stores

were open and trading in both the current and prior period.

LFL measures for product lines or categories, where quoted, are calculated using the

sameprinciples.

LFL measures for our online businesses (cardfactory.co.uk and gettingpersonal.co.uk)

compare gross sales for the current and comparative period made through the respective

online platform.

All LFL measures in this report compare FY25 to FY24, unless otherwise stated.

In addition, the Group reports combined Like-for-Iike sales measures for certain components

of the business as follows:

• ‘cardfactory LFL’ is defined as Like-for-like sales in stores plus Like-for-like sales from the

cardfactory website www.cardfactory.co.uk.

• ‘Online’: Like-for-like sales for cardfactory.co.uk and gettingpersonal.co.uk combined.

Sales by Printcraft, the Group’s printing division, to external third-party customers and

partnerships sales are excluded from any LFL sales measure.

Reconciliation of Revenue to LFL Sales

cardfactory

Stores

£’m

cardfactory

Online

£’m

cardfactory

LFL

£’m

Getting

Personal

£’m

Revenue FY25 506.8 8.8 515.6 4.4

VAT / other 99.0 1.9 100.9 1.0

Adjustment for Stores not open in

both periods (14.5) – (14.5) –

LFL Sales FY25 591.3 10.7 602.0 5.4

Revenue FY24 478.9 8.8 487.7 5.9

VAT / other 93.3 1.9 95.2 1.5

Adjustment for Stores not open in

both periods (0.4) – (0.4) –

LFL Sales FY24 571.8 10.7 582.5 7.4

LFL Sales Growth +3.4% +0.1% +3.3% –27.4%

Note percentages are calculated based on absolute figures before rounding.

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Profitability APMs

EBITDA

Closest IFRS Equivalent: Operating Profit

EBITDA is earnings before interest, tax, gains or losses on disposal, depreciation, amortisation

and impairment charges. Earnings is equivalent to profit after tax calculated in accordance

with IFRS and each adjusting item is calculated in accordance with the relevant IFRS.

The Group uses EBITDA as a measure of trading performance, as it usually closely correlates

to the Group’s operating cash generation.

Reconciliation of EBITDA to Operating Profit

FY25

£’m

FY24

£’m

Operating Profit

79.3 76.4

Add back:

Depreciation 45.0 43.5

Amortisation 3.5 2.8

Losses/(gains) on disposal 0.1 (1.2)

Impairment (reversals)/charges (0.4) 1.1

EBITDA 127.5 122.6

Deduct unrealised gains on derivative contracts (1.5) –

Add back one-off restructuring costs 1.9 –

Add back acquisition related transaction costs 0.7 –

Deduct Covid provision release – (2.0)

Adjusted EBITDA 128.6 120.6

1. Whilst operating profit is not defined formally in IFRS, it is considered a generally accepted accounting measure.

Adjusted PBT

Closest IFRS Equivalent: Profit Before Tax.

Adjusted PBT is Profit Before Tax adjusted to exclude the effect of transactions that, in the

opinion of the Directors, are either one-off in nature and/or are unreflective of the underlying

trading performance of the Group in the period. Adjusted PBT reports a normalised or

underlying trading performance of the Group.

The transactions that have been adjusted could distort the impression of future performance

trends based on the current year results. The Group uses Adjusted PBT to assess its

performance on an underlying basis excluding these items and believe measures adjusted in

this manner provide additional information about the impact of unusual or one-off items on

the Group’s performance in theperiod.

In FY25 the Directors have identified the following items that they believe to meet the

definition of ‘one-off/non-underlying’ for this purpose:

• Non-recurring finance charges related to refinancing completed in April 2024 of

£0.5million.

• Transaction costs related to the acquisitions of Garven and Garlanna of £0.7 million.

• Amortisation charged relating to intangible assets recognised as a result of the

acquisitions of Garven and Garlanna of £0.3 million.

• One-off restructuring costs of £1.9 million associated with the closure of the Getting

Personal platform and streamlining central support operations.

• Unrealised gains of £1.5 million on derivative contracts held at 31 January 2025.

The following items are taken into account in arriving at Adjusted PBT for the equivalent

period last year (FY24):

• The gain on bargain purchase related to the acquisition of SA Greetings of £2.6 million.

• A gain relating to the release of Covid-related provisions of £2.0 million.

• An impairment charge relating to Getting Personal of £1.1 million.

Reconciliation of Adjusted PBT to Profit Before Tax

FY25

£’m

FY24

£’m

Profit Before Tax 64.1 65.6

Add back/(deduct):

Non-recurring refinancing charges 0.5 –

Acquisition-related transaction costs 0.7 –

Amortisation of acquired intangibles 0.3 –

One-off restructuring costs 1.9 –

Unrealised gains on derivative contracts (1.5) –

Acquisition gain – (2.6)

Covid provision release – (2.0)

GP intangible impairment – 1.1

Adjusted PBT 66.0 62.1

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Financial Statements

The following table reconciles the impact of adjusting items as above on Adjusted Gross Profit,

adjusted operating profit and Adjusted Profit Before Tax.

Reconciliation of Adjusting items on the income statement

FY25

£’m

FY24

£’m

Gross profit 193.8 184.9

Add back one-off restructuring costs 0.6 –

Deduct unrealised gains on derivative contracts (1.5) –

Adjusted Gross Profit 192.9 184.9

Operating expenses (114.5) (110.5)

Other operating income – 2.0

Add back acquisition-related transaction costs 0.7 –

Add back one-off restructuring costs 1.3 –

Add back amortisation of acquired intangibles 0.3 –

Add back GP Intangible impairment – 1.1

Deduct Covid provision release – (2.0)

Adjusted operating profit 80.7 75.5

Finance costs (15.2) (13.4)

Gain on bargain purchase – 2.6

Add back non-recurring refinancing charges 0.5 –

Deduct acquisition gain – (2.6)

Adjusted Profit Before Tax 66.0 62.1

Adjusted EPS

Closest IFRS Equivalent: Basic EPS.

Adjusted EPS is earnings per share adjusted to exclude the post-tax effect of items identified

as one-off and excluded from Adjusted PBT in the period. The Group calculates adjusted EPS

as it is the basis of dividend calculations under its capital allocation policy, under which the

Board targets a dividend cover ratio of between 2-3x Adjusted EPS. The starting point of the

calculation is Adjusted PBT, as calculated above.

Calculation of Adjusted EPS

FY25

£’m

FY24

£’m

Adjusted PBT 66.0 62.1

Tax charge (16.3) (16.1)

Tax impact of non-underlying items (0.2) 0.5

Adjusted PAT 49.5 46.5

Weighted average number of shares 346,910,019 343,339,468

Adjusted EPS 14.3p 13.5p

Financial position APMs

Net Debt

Closest IFRS Equivalent: No equivalent; however is calculated by combining IFRS measures

forCash and Borrowings.

Net Debt is calculated by subtracting the Group’s cash and cash equivalents from its gross

borrowings (before debt-issue costs). Net Debt is a key measure of the Group’s balance

sheet strength, and is also a covenant in the Group’s financing facilities. The Group presents

NetDebt both inclusive and exclusive of lease liabilities, but focusses upon the value exclusive

of lease liabilities, which is consistent with the calculation used for covenant purposes.

Calculation of Net Debt

FY25

£’m

FY24

£’m

Current Borrowings 0.1 7.1

Non-Current Borrowings 73.9 37.9

Add back Debt Issue Costs 1.4 0.7

Gross Borrowings 75.4 45.7

Less cash (16.5) (11.3)

Net Debt (exc. Leases) 58.9 34.4

Add back Lease Liabilities 110.4 100.8

Net Debt (inc. Leases) 169.3 135.2

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172

Card Factory plc Annual Report and Accounts 2025

Leverage and Adjusted Leverage

Closest IFRS Equivalent: No equivalent; however is calculated with reference to Net Debt and

EBITDA, which are reconciled to relevant IFRS measures in this section.

Leverage is the ratio of Net Debt (excluding lease liabilities) to EBITDA for the previous

12months expressed as a multiple. Adjusted Leverage is calculated in the same way, but

deducts lease-related charges from EBITDA. The Group monitors and reports leverage as a key

measure of its financing position and as an assessment of the Group’s ability to manage and

repay its debt position. Adjusted Leverage is consistent with a covenant defined with-in the

Group’s financing facilities.

Under its capital allocation policy, the Group targets Adjusted Leverage below 1.5x throughout

the financial year. The Group have remained within the maximum adjusted leverage target in

the year to 31 January 2025. As described in the financial review above, the Group’s cash flows

and earnings are materially affected by seasonality, with higher sales and cash flows in the

second half of the year linked to the Christmas season. As a result, Net Debt levels are lower

and Leverage improved at the year end, after the Christmas season.

Calculation of Leverage

FY25

£’m

FY24

£’m

Net debt (as calculated above) (A) 58.9 34.4

EBITDA (as calculated above) (B) 127.5 122.6

IFRS 16 depreciation (36.3) (35.9)

IFRS 16 impairment reversal 0.4 0.2

Gains on modification/disposal (0.1) 1.2

IFRS 16 interest (8.0) (6.3)

EBITDA less rent costs (C) 83.5 81.8

Leverage (A/B) 0.5x 0.3x

Adjusted Leverage (A/C) 0.7x 0.4x

Cash flow APMs

Operating cash conversion

Closest IFRS Equivalent: No equivalent; however it is calculated with reference to Cash from

Operating Activities (an IFRS measure) and EBITDA, which is reconciled to Operating Profit

inthis section

Operating cash conversion is Cash from operations (calculated as cash from operating

activities before corporation tax payments) per the cash flow statement prepared in

accordance with IFRS divided by EBITDA and expressed as a percentage.

Calculation of Operating Cash Conversion

FY25

£’m

FY24

£’m

Cash from Operations 105.6 118 .7

EBITDA 127.5 122.6

Operating Cash conversion 82.9% 96.8%

Free Cash Flow

Closest IFRS Equivalent: No equivalent; however it is calculated with reference to net cash

inflow from operating activities (an IFRS measure).

Free cash flow is net cash inflow from operating activities per the cash flow statement

prepared in accordance with IFRS less capital expenditure, lease payments (including interest)

and net finance costs and adding back proceeds from disposal of fixed assets.

Adjusted Free Cash Flow excludes the impact of cashflows that are considered one-off in

nature. In FY25, this includes £6.1 million of working capital outflow which is deemed one-off

due to timing of payments, total fees of £1.6 million related to the refinancing completed in

April 2024, £0.7 million of and £3.3 million related to repayment of Covid Grant funds.

Calculation of Free Cash Flow

FY25

£’m

FY24

£’m

Net cash inflow from operating activities 88.9 105.2

Less:

Capital expenditure (18.4) (27. 8)

Lease payments (inc. Interest) (45.6) (43.8)

Net finance costs (7.8) (6.5)

Proceeds from disposal of fixed assets 0.2 –

Free Cash Flow 17.3 27.1

Adjusted Free Cash Flow 29.0 27.1

Net finance costs including interest received on bank deposits, interest paid on bank

borrowings and other financing costs paid.

Other financial calculation information

Unless otherwise stated, amounts in this report are presented in Pound Sterling (GBP),

andhave been rounded to the nearest £0.1 million.

Information in tables or charts may not add down or across, or calculate precisely,

duetorounding. Percentage movements, where provided, are based on amounts before they

were rounded tothe nearest £0.1 million.

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Friday, excluding English public holidays.

Card Factory plc

Century House

Brunel Road

Wakefield 41 Industrial Estate

Wakefield West Yorkshire WF2 0XG

www.cardfactoryinvestors.com

Annual Report and Accounts 2025