Annual Report andAccounts 2026

Annual Report

andAccounts 2026

Creating celebrations

for all life’s

moments

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

with a profitable estate of stores across the UK & Republic of Ireland. As we

continue to deliver our ‘Opening Our New Future’ strategy, we are broadening

our celebration offer, extending access through stores, wholesale partnerships

and digital, and strengthening our position as a leading celebrations destination.

Our purpose is to help customers celebrate life’s moments with great value,

quality and choice. Our vertically integrated model is built on three core pillars:

in-house design; UK manufacturing; and specialist retailing – and is now

further strengthened by the acquisition of Funky Pigeon, which expands our

digital capability and supports our ambition to reach more customers through

a broader omnichannel celebration offer.

Delivering

at scale

see pages 4–5

The

celebrations

brand

see pages2–3

Momentum

across the

business

see pages 6–7

Strategic Report

1 FY26 highlights

2 Introduction

8 Chair’s statement

10 Our investment case

12 Our business model

14 Our markets

16 Our brand

18 CEO’s review

20 Our strategy

22 Strategy in action

36 Environmental, Social and

Governance(ESG)

44 Climate change and TCFD

56 Our stakeholders/S172 statement

64 CFO’s review

72 Risk management

78 Non-financial and sustainability

information statement

Governance

80 Chair’s letter

81 Governance at a glance

82 Board of Directors

84 Corporate Governance Report

90 Audit & Risk Committee Report

96 Remuneration Committee Report

100 Directors’ Remuneration Report –

Remuneration Policy

108 Annual Report on Remuneration

122 Nomination Committee Report

124 Directors’ Report

129 Statement of Directors’ responsibilities

Financial Statements

131 Independent auditor’s report

138 Consolidated income statement

138 Consolidated statement of

comprehensive income

139 Consolidated statement of

financialposition

140 Consolidated statement of

changesinequity

141 Consolidated cash flow statement

141 Notes to the Financial Statements

171 Parent Company statement of

financial position

171 Parent Company statement of

changesin equity

172 Parent Company cash flowstatement

172 Notes to the Parent Company

FinancialStatements

Company Information

178 Glossary

182 Advisers and contacts

Welcome to cardfactory –

whereeveryone can celebrate

life’s special moments.

Card Factory plc Annual Report and Accounts 2026

Strategic Report Governance Financial Statements Company Information

Financial Key Performance Indicators (KPIs)

Adjusted PBT

(£m)

£56.0m

Adjusted EPS

(pence per share)²

11.8p

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 in the previous financial 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 138) or Alternative Performance Measures (APMs). FY26 means the financial year to 31 January 2026.

1. The above financial KPIs are either measures calculated in accordance with IFRS (see Financial Statements starting on page 138 or are Alternative Performance Measures).

2. See the Glossary on pages 178 to 181 for Alternative Performance Measures (APMs) and other explanatory information.

See the CFO’s Review on pages64–71.

Company Information

INTRODUCTION

The celebrations

brand

We are delivering on our ambition of building a global

celebrations business by expanding our offer through a

broader range of celebration categories, strengthening our

reach to more customers across more channels including

through the acquisition of Funky Pigeon, and through a

relentless focus on delivering value across our range.

Extending our relevance across life’s moments

“We make

sharing in and

celebrating life’s

moments special

and accessible

foreveryone.”

See more about Our Business Model on pages12 and 13.

Card Factory plc Annual Report and Accounts 2026

A brand built on celebration

Placing customers and their moments first

Our brand places our customers and their celebrations at the centre of

everything we do. It is rooted in a core truth that ‘life needs celebration’

and even during the continually challenging economic climate, customers

still want to spend on celebrating life’s moments. To deliver on this need,

our brand purpose is ‘to make sharing in and celebrating life’s moments

special and accessible for everyone’, supported by our brand proposition

of ‘creating celebrations for all life’s moments’.

Broadening our celebration offer

Cards, gifts and celebration essentials for every occasion

As a celebrations brand, we offer a broad and expanding range of

value-led cards, gifts and celebration essentials. In FY26, this included a

new in-house designed premium card range and an updated milestone

age gift range.

Making celebrating easy

Easy access across physical and digital channels

Convenience is at the heart of our offer and to meet this need we

continue to develop and expand our nationwide store estate, while

investing in our digital offer and omnichannel capabilities, which we

have accelerated through the acquisition of Funky Pigeon.

Extending our reach

Scaling across the UK, Republic of Ireland

and internationally

Our extensive store estate provides convenient celebration destinations

for customers across the UK & Republic of Ireland. This is complemented

by the range we offer through our wholesale partners including Aldi and

Matalan, and a growing number of international partners.

Strong customer relevance

Compelling value that supports customer choice

and repeatpurchasing

Our offer is value-led, providing products across a range of price points.

We continue to focus on maintaining our value for money proposition

with cards still starting from just 15 pence, while delivering relevant

year-round promotions.

Number of UK &

Republic of Ireland stores

1,117

Net new stores since FY23

+85

1. Data as at 31 January 2026.

Store basket value growth

£5.15

(FY23: £4.27)

Non-card as % of store sales

52.5%

(FY23: 50%)

Non-card store sales growth

since FY23

+17%

Strategic Report Governance Financial Statements

Company Information

Delivering

at scale

Delivering an exceptional,

seamless celebrations experience

inthe UK and internationally.”

INTRODUCTION CONTINUED

Our business is underpinned by a scalable operating model

that enables efficient expansion across our strategic channels

in the UK and internationally. By leveraging our vertically

integrated capabilities and channel strengths, we are able to

respond quickly to changes in customer demand and buying

behaviour, while maintaining strong value credentials. This

platform provides the flexibility to unlock future opportunities

across stores, wholesale partners and digital.

A proven platform for efficient, disciplined

and scalable growth

Card Factory plc Annual Report and Accounts 2026

Vertically integrated advantage

Design, manufacturing and supply chain at scale

Our design, manufacturing and supply chain capability

delivers a vertically integrated model that supports

consistent pricing, speed to market and availability at scale.

Leveraging key elements of our vertically integrated model

will help drive growth within our digital channel following

the acquisition of Funky Pigeon.

Expanding our store footprint

Reaching underpenetrated and

higher-growth locations

Our store estate expansion continues to focus on

opportunities in underpenetrated locations. Growth

acrossthe Republic of Ireland demonstrates the scalability

of our proposition, while our ongoing store relocation

and expansion strategy has increased our presence in

relevant retail park locations and further optimised our

highstreetestate.

Optimising in-store space across the estate

Evolving formats to maximise returns

We continue to optimise in-store space across the

estate through a flexible, data-led approach, enabling

the expansion of gifts and celebration essentials, while

protecting our market-leading card ranges. Capital-light

interventions improve ease of shop, support category

growth and increase productivity as the business evolves

tocapture a greater share of celebration spend.

Read about in-store space on page 23.

Strengthening our digital platform

Accelerating growth through Funky Pigeon

The acquisition of Funky Pigeon provides the opportunity

to strengthen our digital capabilities and advance our

online proposition by enhancing technology capabilities,

expanding our customer base and strengthening our

omnichannel proposition to enable seamless access to

abroader celebration range across stores and online.

Scaling through wholesale partnerships

UK and international growth through

provenmodels

Our wholesale partnership model continues to perform

strongly in the UK and internationally, providing a scalable

route to market. Existing wholesale partnerships are

performing well, with plans to accelerate growth further,

particularly in North America, while acquisitions made in

the USA, Republic of Ireland and South Africa extended

ourreach into new markets.

Store, wholesale partner and

customermomentum

Net new stores

+27

Total stores sales growth

+1.5%

Total digital sales

£20.6m

Total wholesale partnership revenue

+113.4%

See more about Our Strategy on pages 20 to 35.

Strategic Report Governance Financial Statements

Company Information

Continued momentum

across the business

Read more about Our Colleagues onpages60–62.

INTRODUCTION CONTINUED

FY26 was a year of disciplined execution and continued

momentum towards our ambition of building a global

celebrations business. Progress was characterised by the

expansion of our offer through a broader range of celebration

categories, strengthening our reach to more customers

across more channels, and maintaining a relentless focus

ondelivering value across our range and managing cost

inflation through productivity and efficiency initiatives.

Progress delivered across the business,

underpinned by disciplined execution

Card Factory plc Annual Report and Accounts 2026

Navigating a challenging consumer backdrop

Foundations for future growth continue

tostrengthen

Trading in our UK stores reflected the challenging consumer

backdrop, which contributed to soft high street footfall in

the second half of the year. However, across the Group

we were encouraged both by the performance of our

international businesses and the continued on-track

integration of FunkyPigeon.

Driving productivity and efficiency

‘Simplify & Scale’ mitigating

inflationarypressures

We are mitigating the impact of inflationary pressures

through the effective execution of our ‘Simplify & Scale’

programme, which is delivering productivity and efficiency

benefits. At the same time, we continue to invest in

the foundations that are driving further efficiencies

includingtheimplementation of our new human resource

information system, investment in new electronic point

of sale (till) system, and other initiatives that will improve

demand planning and stock accuracy.

Strong financial discipline

Cash generation and balance sheet strength

supporting investment and returns

Financial discipline remained a core strength in FY26.

TheGroup delivered strong cash generation, with improved

operating cash flow and free cash flow supported by

disciplined working capital management. This enabled

continued investment in strategic priorities, including the

acquisition of Funky Pigeon, while maintaining a robust

balance sheet. Net Debt remained well controlled, with

leverage at around 1.0x, comfortably within target levels.

This strong financial position supports ongoing investment

and progressive returns to shareholders.

Building capability and culture

Colleague engagement supporting execution

During FY26, we continued to strengthen an inclusive,

values-led culture across our store estate, embedding

consistent ways of working. Investment in colleague

capability, underpinned by ‘The cardfactory Way’, supported

clear accountability, engagement and customer service.

Our focus on inclusivity and belonging recognised colleague

diversity, fostered collaboration and development,

and reinforced shared values, helping maintain strong

service standards and operational consistency through

achallenging year.

Integrating sustainability and social impact

Progressing sustainability and

socialresponsibility

In FY26, we continued to integrate sustainability and

social impact into decision making. Progress focused on

strengthening governance, improving data and embedding

responsible sourcing, waste reduction and community

initiatives through ‘Giving Something Back’, supporting

long-term resilience and responsible growth.

Read Our Investment Case on pages10–11.

Read more about Our ESG Strategy pages36–43.

Strategic Report Governance Financial Statements

Company Information

Evolving to

Celebrations

Paul Moody

Non-Executive Chair

Introduction

FY26 was a year of both encouraging

progress and challenge for cardfactory.

While we delivered continued revenue

growth and further advanced our strategic

agenda, performance in the second half, in

particular, reflected more cautious consumer

behaviour and softer high street footfall,

both substantially influenced, we believe,

bymacroeconomic conditions.

Despite these pressures, the business

delivered strong free cash flow of £40.7 million

enabling continued investment in the business.

This reflects the disciplined execution of our

strategy while maintaining a sharp focus on

operational efficiency and cost management.

We continue to implement our strategy

of evolving cardfactory into a broader

celebrations retailer, expanding our offer

across occasions and categories, while

maintaining our position as the leading

card specialist. This is reflected in the

development of our gifts and celebration

essentials offer as we increase our share

of the celebration occasions market. Our

focus on value and quality remains central

to our customer proposition, ensuring we

remain relevant to all in a more challenging

economicenvironment.

The Board recognises the continued

commitment of our colleagues across the

Group. Their contribution, throughout the

year, but particularly during peak trading

periods, has been valuable and critical in

helping us navigate a more demanding

trading environment, at the same time

asprogressing our strategy.

Year in review

The year was characterised by a shift in

consumer behaviour. Ongoing cost-of-living

pressures contributed to weaker consumer

confidence and, consequently, more cautious

discretionary spending. This was most

evident in the second half, where reduced

footfall across all retail formats impacted our

UK store performance. Despite this, in Q4,

cardfactory continued to grow our share of

the physical UK card market, demonstrating

the continued strength and relevance of our

value and quality-led proposition.

We have made good progress against

ourstrategic priorities. Our store estate

expanded during the year, alongside the

continued expansion of our celebration

product offer.

The acquisition of Funky Pigeon has

significantly strengthened our digital

capabilityas well as growing our customer

reach. Integration plans have been finalised

and our operating model validated, with

deployment commencing. We have a

clear pathway to delivering synergies

and supporting a more seamless

cross-channel proposition.

Our wholesale partnerships business also

performed well, with encouraging progress

across acquired businesses and continued

rollout of our international model.

Outlook and macro environment

Total Group sales for the first three months

of FY27, excluding the incremental benefit of

Funky Pigeon, are in line with the same period

in the prior year. For the full financial year we

anticipate total sales across all channels to grow

year-on-year, including the benefit from the

full-year impact of the Funky Pigeonacquisition.

We are cognisant of the situation in the

Middle East and the potential for impact on

direct input costs such as container rates,

energy and fuel surcharges. However, we

expect the rigorous delivery of our ‘Simplify

& Scale’ programme to substantially offset

inflationary pressures, including incremental

cost impacts that are currently quantifiable

as a result of the Middle East conflict. This

programme, together with our hedged foreign

exchange and energy positions, provides

a reasonable level of cost visibility for the

remainder of the year.

Profit margins across the business are

expected to remain broadly consistent with

FY26, with profit delivery weighted towards

the second half, in line with prior years.

Takingthese factors together, the Board

expects growth in Adjusted PBT for FY27 to

be in line with the current market consensus

We, however, remain mindful of the potential

implications of geopolitical developments on

consumer sentiment and input costs.

Over the medium term, the Board remains

confident in cardfactory’s ability to deliver

mid-to-high single-digit percentage Adjusted

PBT growth.

In line with our capital allocation policy, the

Board has recommended a final dividend

of 3.7 pence per share, resulting in a

total dividend of5.0 pence per share for

FY26(FY25:4.8pence).

CHAIR’S STATEMENT

We continue to implement

our strategy of evolving

cardfactory into a broader

celebrations retailer.”

1. According to company compiled consensus estimates as at 27 April 2026, the current range of market expectations for FY27 adjusted PBT is £54.8 million to £60.5 million, with an

average of £58.2 million, excluding a statistical outlier significantly in excess of company guidance.

Card Factory plc Annual Report and Accounts 2026

In addition, the Board has concluded that the

Group has surplus cash at the end of FY26,

supported by the strong free cash generation

in the period. As a result, we intend to shortly

commence a share buyback programme

to repurchase up to £15 million of shares

duringFY27.

ESG strategy

The Board continues to oversee implementation

of our ‘Delivering a Sustainable Future’ plan,

ensuring that sustainability remains embedded

within our strategy and operations. Progress

has been made across all pillars, including

climate, waste and circularity, protecting nature,

people and equity, and governance.

Summary

While FY26 presented challenges, particularly

in the second half, the Board remains

confident in the long-term growth potential

forcardfactory. We have continued to

strengthen our strategic foundations and

see significant opportunity to increase our

share ofspend within the celebrations

market, meaning we are well positioned to

deliver sustainable profitable growth over

themediumterm.

Paul Moody

Chair

28 April 2026

See more about Our ESG Strategy

on pages 36–43.

Strategic Report Governance Financial Statements

Company Information

OUR INVESTMENT CASE

Delivering long-term value

through disciplined execution

A strong retail investment is defined by resilient demand, earnings visibility, disciplined capital allocation and consistent cash generation.

cardfactory demonstrates these characteristics through its UK market leadership, a vertically integrated operating model and a clear

focus on value for customers.

FY26 was characterised by weaker consumer sentiment, inflationary cost pressures and an evolving competitive landscape. Within

this context, the Group remained profitable and cash generative, continued to execute its ‘Opening Our New Future’ strategy and

strengthened the foundations for future growth.

Proven delivery in a challenging market

Since launching ‘Opening Our New Future’ in FY23, cardfactory has delivered growth

through store expansion, range development and extended routes to market. In

FY26, progress continued to be driven by the core store estate and the broadening

of the celebration offer, alongside deliberate actions to reset parts of the business

tosupport more sustainable performance over time.

Key features of delivery include:

• Store estate expansion into underpenetrated locations and enhanced offer

across gifts and celebration essentials.

• Deliberate actions across channels, including the acquisition of Funky Pigeon,

to strengthen the long-term digital proposition.

• Continued investment in customer service, availability and operational

foundations, including a new point of sale (till) system and stock

processimprovements.

• Ongoing cash generation, supporting investment priorities and

shareholder returns.

Targeting continued value creation

cardfactory’s strategy is focused on delivering sustainable growth over the medium

term.Learnings from FY26 have reinforced the importance of value leadership,

capital discipline and operational efficiency in delivering consistent returns.

Beyond FY26, the Group is targeting:

• Mid-single-digit percentage sales growth, driven by stores, increased

shareofcelebration spend and selective channel growth.

• Adjusted Profit Before Tax growth in the mid to high-single-digit range,

supported by operating leverage and efficiency gains.

• Free cash generation of 70–90% of Adjusted net earnings, underpinned

bydisciplined investment and working capital control.

• A sustainable, progressive dividend, based on a 2–3x dividend cover ratio

onAdjusted earnings.

This framework reinforces our focus on earnings quality, cash resilience and

sustainable long-term returns.

Read more about Our Strategy onpages20–35. Read more in the CFO’s Review on pages64–71.

Card Factory plc Annual Report and Accounts 2026

Drivers of growth

cardfactory’s growth strategy is designed to deliver profitable revenue growth and strong cash generation

through complementary and capital-efficient drivers.

Reaching more

customers

Extending access across

stores, digital and

wholesale partners.

The Group continues to

expand its store estate

across the UK & Republic

of Ireland, focusing on

underpenetrated locations

and maintaining disciplined

return thresholds. Alongside

this, wholesale partnerships

extend our reach beyond

the owned estate with the

Group owning the largest

card wholesaler in South

Africa and building a strong

platform for growth in

North America through

theacquisition of Garven.

The acquisition of Funky

Pigeon strengthens our

digital capabilities and

provides a platform for a

more scalable and profitable

online proposition over time.

See Reaching More

Customers on

pages26–31.

Increasing

share of UK

& Republic

of Ireland

celebration

markets

Capturing more

of customers’

celebrationspend.

As the leading

omnichannel retailer

of cards, gifts and

celebration essentials

in the UK, we combine

outright leadership in

greeting cards, gift bags,

wrap and balloons, with

a growing presence in

adjacent categories. This

breadth enables us to

progressively capture

a greater share of our

customers’ annual

celebration spend.

See Increasing share of

UK & Republic of Ireland

celebrations markets

section on

pages22–25.

Driving

efficiencies

Scaling a lowest-cost

operating model.

cardfactory’s vertically

integrated model and

multi-year ‘Simplify

& Scale’ programme

continue to deliver

structural efficiencies,

supporting margin

resilience and cash

generation, while

maintaining a strong

value proposition.

See Driving Efficiencies

onpages32–35.

Differentiated

advantage

Maintaining a

defensible market

position.

Scale, vertical integration,

value leadership and

a nationwide footprint

provide a differentiated

competitive position that

is difficult to replicate

by the competition

and strengthens as

thebusiness grows.

See Our Business Model

onpages12–13.

Unlocking

market

opportunity

Operating in a

large, resilient and

fragmented market.

Celebration occasions

remain underpinned

by recurring life events

and habitual customer

behaviour, supporting

long-term growth

opportunities across

categories and channels.

See Our Markets

onpages14–15.

Living our

purpose

Value, accessibility

andresponsibility.

Our strategy is

closely aligned with

our approach to

value, accessibility,

colleague engagement,

sustainability and

community impact.

This is demonstrated

through colleague

initiatives within diversity

and inclusion, and our

People and Communities

sustainability pillar.

See: Our ESG Strategy –

People and Community

onpage 41.

Strategic Report Governance Financial Statements

Company Information

OUR BUSINESS MODEL

Our differentiated advantage

Data-led design enables rapid and relevant

response to changing customer trends and

preferences informed by sales data, customer

insights and trend analysis.

• End-to-end control of the product chain allows flexible

and rapid adaptation including the ability to reprint

popular lines.

• Design is planned in line with our price architecture

(‘design to the budget’) supporting consistent

value-for-money, while protecting product margins.

• This enables faster reaction to demand changes, tighter

control of margins and reduced reliance on third-party

product development.

Our large-scale print facility in Baildon,

Yorkshire (Printcraft) is a core differentiator

for cardfactory now complemented by the

Funky Pigeon order fulfilment capability in

Guernsey for personalised cards.

• The Printcraft facility produces the majority of cards

sold through our store network, wholesale partners

andonline channels, providing control over quality,

costand availability.

• Continued investment supports cost discipline, efficiency,

speed to market and consistent product quality.

• Additional in-house and outsourced manufacturing

capability within our international businesses

(SA Greetings and Garven) complements our UK facility.

• Controlling production ensures we can reduce unit costs

for card, respond quickly to changes in demand and limit

exposure to external supply chain disruption.

A scaled and growing retail and digital

footprint, complemented by wholesale

partnerships, extends our reach across

multiple channels.

• UK & Republic of Ireland stores remain our primary

route to market, providing extensive customer reach

andfrequency.

• Our owned digital platforms, including Funky Pigeon,

broaden customer reach, capture complementary

shopper missions and support growth beyond the

physical estate.

• Wholesale partnerships capabilities delivered through our

acquired businesses provide additional points of presence

in target markets.

• Together, this provides a low-cost, high-productivity store

model alongside capital-light routes to market.

All data correct as at 31 January 2026.

Worldwide design

colleagues

739

Worldwide support

colleagues

152

Worldwide manufacturing

colleagues

330

Worldwide distribution

colleagues

8,682

Worldwide

colleagues

1,117

UK & Republic of Ireland

retail stores

Design

Retailing

Manufacturing

Built on vertical integration

As a vertically integrated retailer, we control multiple stages

of the value chain, minimising our reliance on third parties

and improving visibility over costs, availability and margins.

For cardfactory, vertical integration refers to controlling

key stages of the product lifecycle – from design and

manufacturing through to distribution and sale – creating

a structurally differentiated and defensible advantage that

supports consistent value, margin discipline and resilience

through market cycles.

A proven platform for efficient, disciplined and scalable growth

Card Factory plc Annual Report and Accounts 2026

As we deliver on our ‘Opening Our New Future’ strategy, we are evolving

our business model in six areas:

Our buying capability

A more optimised global

supplybase.

As we expand internationally and grow

across gift and celebration essentials,

we continue to develop the sourcing

and buying capability needed to support

an optimised global supply base. This

supports speed to market, with a

continued focus on cost management,

sustainability and product development.

Our global scale & reach

Adding capability and reach

withdiscipline.

Our vertically integrated model operates

at scale across multiple geographies,

supporting high volumes, consistent quality

and efficient distribution. With established

operations in the UK & Republic of Ireland

and a growing international footprint, this

scale underpins cost efficiency and enables

disciplined expansion into new markets.

Creating value for…

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.

Our colleagues

Our inclusive culture nurtures talent

across the organisation and ensures

we live 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 communities

From individual store community

initiatives to The cardfactory

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 design capability

Insight-led ranges that keep

customers choosing us.

Our design capability continues to evolve

through use of customer insights, sales data

and trend analysis. This ensures our cards,

gifts and celebration essentials ranges

meet the needs of loyal customers, while

appealing to new demographics in the UK

& Republic of Ireland, as well as for our

partners internationally.

Our production capability

Speed, quality and value at scale.

Our in-house manufacturing facility

providescard production for our UK,

Republic of Ireland and international

partner stores, now complemented by our

online personalised card print and fulfilment

capability for Funky Pigeon in Guernsey.

Wecan produce new ranges in as little as

four weeks and remanufacture fast-selling

lines in days, supporting both our quality

and value-for-money credentials.

Our distribution capability

Capacity headroom as routes to

market expand.

We have been expanding our distribution

capacity to support delivery of the strategy

across stores, partners and digital channels.

This includes the planned integration of

Funky Pigeon into our fulfilment capability.

Our customer reach

More customer touchpoints across

stores and digital.

We continue to grow our store estate

in the UK & Republic of Ireland into

underpenetrated locations. Our owned

digital platforms, including Funky Pigeon,

extend our reach to customers who choose

to shop digitally. UK and international

wholesale partnerships further broaden

access to our celebration offer.

Company Information

The celebration occasions

market we operate in

For nearly three decades, cardfactory has helped millions of customers celebrate

life’s moments, initially through great value greeting cards and increasingly through

a broader offer spanning gifts and celebration essentials. As customer expectations

have evolved, so too has the scope of the UK celebration occasions market, which is

comprised of three core categories.

The UK greeting card market reached

£1.58 billion in 2025, with 21% purchased

online. Annual growth was modest at 3%,

driven by a combination of increased average

price paid and growth in card volume.

Internationally, our research from 2022

indicates a targetable opportunity of

c.£80 billion across card, gift and celebration

essentials in our identified markets. The United

States represents the largest opportunity

at c.£65 billion.

Market conditions in 2025

Consumer confidence improved through 2024

and into early 2025 as cost-of-living pressures

eased. However, momentum slowed in the

second half as fiscal uncertainty resurfaced.

Footfall trends reflected these conditions.

UK annual footfall declined 0.8%, but with

Q4 down 2.2%. In the key trading month of

December, high streets performed more

resiliently (-0.9%) than retail parks (-2.5%),

as customers became more selective,

planned purchases carefully and sought

higherdiscounts.

Channel mix remained broadly stable. Online

retail continued its gradual post-pandemic

normalisation, accounting for 27.4% of total

retail sales in 2025, slightly up from 27.1%

theprior year.

Consumer behaviour

and demand trends

Despite the challenging backdrop, customers

continued to shop for their celebrations.

In-store shopper data from Numerator

indicates that 99.2% of UK households

shopped for celebration occasion products

in the 52 weeks to 25 January 2026. In the

same period, the frequency that households

shopped for these products dipped slightly

to 38.3 visits, a change of -1.5% versus the

prior year.

Together, these categories form a large,

mature and resilient market. Following

updated market analysis, we estimate the UK

celebration occasions market totalled £22.3

billion in 2025, growing by £370 million versus

2024 (+1.6% growth). Gifting represents

the largest component at £19.2 billion,

with 32% purchased online. This category

demonstrated robust growth of 1.5%, driven

by both seasonal events, where Christmas

remains dominant at 39% of seasonal spend,

and everyday occasions, with birthdays

accounting for 24% of everyday gift sales.

1, 2

The UK celebration essentials market was

estimated at £1.5 billion in 2025, with 26%

purchased online. Like gifts, this category is

strongly seasonal and grew by £28 million

versus 2024. Party products form the largest

sub-segment at 42%, followed by gift wrap

(36%) and balloons (22%).

Greeting cards

Cards purchased in-store or

online to help customers express

and share messages across a

wide variety of celebrations

and milestones from birthdays,

weddings and new arrivals to

congratulations, graduations

andnew home occasions.

Gifts

Items purchased to mark

an occasion, either alone or

alongside a card. This includes

stationery, craft, small toys,

books, candles, mugs, glassware,

homewares, novelty gifts and

other small keepsakes.

Celebration

essentials

Products that turn a moment

into a celebration, including

balloons, party ranges, banners,

gift wrap and gift bags.

OUR MARKETS

Overall consumer sentiment index

-5

-10

-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

Apr 25

Jul 25

Oct 25

Feb 26

790m

Overall UK card

market volume

(2025)

Card Factory plc Annual Report and Accounts 2026

cardfactory has also grown its presence in

online channels through its website and

FunkyPigeon. This scale provides material

headroom for growth. We currently hold

approximately c.2%

1, 2

share of the total

celebration occasions market, with further

share expansion embedded in our long-term

growthambitions.

Looking ahead

With continued weakness in consumer

confidence and pressure on household

finances, we expect customers to remain

choiceful in their purchasing. Value,

relevance and affordability will continue to

shape decision making across celebration

occasions, with shoppers seeking products

that deliver quality and meaning without

stretchingbudgets.

For retailers, this environment places

increasing importance on delivering:

• Outstanding value for money;

• Depth and breadth of range; and

• Convenient and enjoyable shopping

experiences across channels.

cardfactory delivers a broad range, deep

value leadership and an accessible store and

online footprint, supported by knowledgeable

colleagues. We are positioned strongly to

help customers celebrate meaningfully and

affordably as the market continues to evolve.

Within celebration occasions, greeting

cards followed a similar trend. 91.8% of UK

households shopped for greeting cards in the

52 weeks to 25 January 2026, dipping slightly

by 0.4%. Frequency of greeting card shopping

trips fell slightly to 11.3 times per year, a

decline of -2.7%.

An evolving competitivelandscape

Competition across the UK celebration

occasions market continues to focus

around value, convenience and range.

Retailers sharpened pricing and entry level

offers through 2025, making value a more

competitive battleground. Convenience

also strengthened as operators improved

availability across channels and positioned

occasion purchases alongside routine

shopping missions.

Range differentiation intensified, with broader

and more occasion-specific assortments

used to drive choice and relevance. Several

specialist operators expanded their store

estate to extend reach and support deeper

in-store selection and services such as

balloonarrangements.

cardfactory’s position

within the market

cardfactory remains a leading specialist

in cards and celebration essentials, and

a growing participant in the sizeable gifts

market. Brand usage is significant, with 44%

ofUK adults shopping with cardfactory at

least once a year, representing a +19ppts

lead over the nearest specialist competitor.

Company Information

www

We exist to help customers create

celebrations for all their life moments

In value retail, brand strength supports repeat

purchasing, consistent footfall and customer trust

on price and quality. These factors are important

for delivering resilience through economic cycles.

Building a resilient and differentiated brand starts

with having a clear and compelling purpose, which

must be executed consistently for colleagues and

customers day in, day out.

Our purpose drives our business

cardfactory exists to make sharing in, and

celebrating life’s moments special and accessible

for everyone. This is our purpose and drives all

that we do. We believe that life needs celebration

and celebrating is an important way to mark

life’s moments. Our purpose drives our business

and flows through to all our brands in the UK

and internationally, and routes to market. It is

experienced most visibly for customers in our

corecardfactory store proposition.

OUR BRAND

A value brand

that customers

trust

Card Factory plc Annual Report and Accounts 2026

www

1. Savanta BrandVue January 2026.

2. Numerator, World Panel Plus, Physical Retail, 52 w/e 25 January 2026.

Range and quality for all life’s celebrations

• Our vertically integrated model, with in-house studio design teams, enables cardfactory

to create bespoke ranges specific to our customers and their needs.

• With almost 5,000 card designs available across our cardfactory stores, and over 10,000

personalised options online, customers have a broad choice across everyday, seasonal

and milestone occasions.

• Our studio colleagues are constantly listening to customer feedback and scanning

design trends to create designs so customers can express the perfect sentiment for

alltheir celebrations.

• Against other specialist card retailers, cardfactory ranks number one for a wide range of

products, +4ppts versus nearest competitor or +6ppts versus key competitor average.

Great value in every purchase

• Our focus on value runs throughout the organisation from lean manufacturing to store

operations and is core to enabling our low prices. Value underpins our leadership in

the market. It is a core element of our competitive positioning and advantage.

• Value is visible across entry price point cards from 15 pence through to our premium

collectible ranges, with intricate designs and premium materials. This helps ensure

affordability across occasions.

• Customers continue to make use of our multi-buys such as our 10 for £1 on a selection

of entry price-point cards and our 3 for 2 on general cards. These volume-based

promotions support customers in creating and sharing in more celebrations across

theyear.

• cardfactory ranks number one for good value among card specialist retailers, +16ppts

above the nearest competitor or +17ppts versus key competitor average.

Convenience that makes creating

celebrationsaccessible

• Our retail estate, online store and knowledgeable colleagues ensure our ranges are

easily accessible by all.

• We believe that cardfactory is for everyone. With 1,117 stores across the UK & Republic

of Ireland, customers never have far to travel to access great value cards, gifts and

celebration essentials.

• Our colleagues work tirelessly to prepare our stores and online experience. Our

in-store standards programme, ‘Set To Celebrate’, means our environments are always

ready to receive customers. And our in-store service guidelines – ‘The cardfactory Way’

–ensures colleagues are ready to serve.

cardfactory is the nation’s

leading celebration retailer

44%

of UK adults chose

cardfactory for

their celebrations

in 2025

Trusted brand

Customer loyalty is built from their trust and satisfaction in the brand.

cardfactory ranks number one for being trusted among card specialist retailers,

+6ppts versus nearest competitor and +9ppts above our key competitor average.

Customer satisfaction

Customers are also highly satisfied with the experience they receive. 75% of

recent customers claim to be satisfied with the experience, 6ppts ahead of our

key competitor average.

Customer loyalty

This strong satisfaction underpins the high frequency that we see our

customers shopping. Our typical customer shops around five times per year

with the brand – around 13% of total celebration shopping frequency.

As we progress into FY27, we will continue to evolve our offer

to ensure we delight our customers on every visit, so they

return to us again and again. And ultimately, help them to

create celebrations for all their special life moments.

Strategic Report Governance Financial Statements

Company Information

CEO’S REVIEW

Increasing

share of

customer

spend

Darcy Willson-Rymer

Chief Executive Officer

Introduction

FY26 reinforced that celebrations remain an

essential part of everyday life, with customers

continuing to prioritise key moments. This

was despite a shift in consumer behaviour

as we approached the key Christmas trading

season, with customers shopping less

frequently and with greater intent, resulting

in more challenging trading conditions as

confidence weakened and footfall declined.

As a result, while participation in celebration

occasions remains high, the second half of

FY26 saw customers consolidate purchases

into fewer trips and plan more carefully

around specific occasions, with greater

emphasis on value. For cardfactory, that

resulted in lower transaction volumes,

which was broadly offset by higher average

basketvalues.

However, the celebration occasions market

remains resilient, with UK customer

participation consistent at over 99%.

Moreover, our addressable market within

gifts and celebration essentials continues

the growth seen since our capital markets

strategy update in May 2023.

This underpins the opportunity we see to

increase our share of customers’ annual

celebration spend across cards, gifts and

celebration essentials. We are well positioned

to deliver on this, serving over 24 million

unique customers in our stores every year

and building on our UK market leadership

in cards and key celebration categories. Our

strategy is focused on increasing participation

across more occasions and categories

acrossour channels and markets.

Through the year we delivered revenue

growth and strong cash performance, while

continuing to invest in the business and

strengthen the foundations for growth

incelebrations.

FY26 performance

FY26 was a year of continued strategic

execution against a more challenging

consumer backdrop. Softer high street footfall

and reduced transaction volumes, particularly

in the second half, impacted UK store

performance, with Like-for-like sales broadly

flat at -0.2% and LFL transactions down

3.7%. This was largely offset by an increase

in average basket value of 3.5%, reflecting

more considered purchasing behaviour and

continued engagement across a broader

range of celebration occasions.

Group revenue increased by 7.4% to

£582.7 million, supported by new store

openings and the annualisation of prior-year

acquisitions. Adjusted PBT of £56.0 million

reflects the impact of weaker H2 trading

across UK stores alongside ongoing cost

inflation, although disciplined execution of

our ‘Simplify & Scale’ programme helped

mitigate a significant proportion of these

pressures andsupportedstrong free cash

flow generation of £40.7million.

Through FY26, we have continued to make

clear progress against our ‘Opening Our New

Future’ strategy, strengthening our position

as a celebration destination. Since FY23, we

have added £119 million of revenue and

grown Adjusted PBT by 14.5%, demonstrating

both the resilience of our model and the scale

ofthe opportunity ahead.

Investment in our store estate saw the

opening of 27 net new stores during the

year as we expanded into underpenetrated

locations, while also making further progress

within our space optimisation programme.

This builds on the progress we have made

since FY23 in expanding our gifts and

celebration essentials offer, which has driven

sustained growth in non-card categories and

enabled us to participate in a greater share

ofcustomer spend.

Card Factory plc Annual Report and Accounts 2026

At the same time, we have strengthened

our multi-channel capability through the

acquisition of Funky Pigeon, which has

expanded our digital customer base and

contributed £13.5 million of revenue in the

year. Looking ahead, this will enhance our

ability to serve customers across channels.

Although performance at cardfactory.co.uk

declined as we reset our proposition and

marketing approach, these actions are

focused on driving more sustainable and

profitable growth over the medium term.

Our wholesale partnerships business has

continued to scale rapidly, with revenue

more than doubling to £47.2 million, which

includes positive financial contribution from

our acquired businesses and annualisation

ofGarven and Garlanna.

Strategy delivery

Through the year, we have continued to

deliver on our ‘Opening Our New Future’

strategy across the business, with a focus

on strengthening our customer proposition,

developing capability across our channels

and continuing to leverage the benefits of

ourvertically integrated model.

Within our core retail business, we have

progressed the evolution of our store

proposition with ongoing changes to

space allocation, merchandising and

range presentation, which are designed to

better reflect how customers shop across

differentoccasions.

By using our enhanced data capability, we

have segmented our entire store estate to

further evolve space to build authority in

celebrations. This will see us tailor ranges

andallocations based on shopper behaviours,

such as when a mission is card-led, party-led

or cross-category.

A key focus for FY26 was strengthening our

digital capability, with a clearer articulation of

the role that online plays within the Group.

While cardfactory is the UK’s leading specialist

card retailer, we see clear headroom to grow

our online market share, particularly through

a compelling card and gift attached offer that

leverages our existing market strength. By

acquiring Funky Pigeon, we are able to expand

our presence in online and personalised

cards. At the same time, integration activity is

focused on aligning systems, fulfilment and

customer propositions across both Funky

Pigeon and cardfactory.co.uk, which will

deliver integration synergies of £5 million

and accelerate the omnichannel proposition

fromFY28.

Funky Pigeon also complements our

nationwide store estate. As we broaden

our celebrations offer, from FY28 this will

create the opportunity to extend our store-

based party and celebration offer, enabling

both in-store and online customers to

seamlessly access a wider range through

ouromnichannel services.

Across wholesale partnerships and

international, we have continued to develop

a capital-light route to market. This includes

further rollout of our full-service model

with The Reject Shop in Australia, as well as

expansion into the New Zealand market.

We have also further developed our Aldi

partnership, with additional seasonal

and Christmas ranges delivering strong

performance in FY26.

Alongside this, we have embedded and

strengthened our international operations.

This includes realisation of synergies and

additional sales opportunities with Garven

and Garlanna, the completion of an internal

restructuring at SA Greetings to improve

operational efficiency through upgraded

IT and logistics investment, and the

development of capability within Garven to

support our North America card strategy.

These initiatives have been supported by

continued delivery of efficiencies across

the business through our ‘Simplify & Scale’

programme, with a focus on improving

productivity, simplifying processes and

strengthening operational execution. Our

unique, vertically integrated model remains

central to this approach. By combining

in-house design, sourcing and supply chain

capability with a scaled retail and digital

footprint, we are able to manage costs more

effectively, respond with greater agility to

changes in input costs and customer demand,

and maintain a strong value proposition

across our card, gift and celebration

essentialsranges.

Looking ahead, our priorities are focused on

strengthening brand authority in gifts and

celebration essentials, targeting Like-for-

like growth of around 2–3% from FY28 by

helpingcustomers fulfil celebrations shopping

missions, engaging our 24 million customers

more effectively, and delivering a seamless

cross-channel experience.

People and culture

Our colleagues and culture remain central to

delivering our strategy and supporting our

ambition to become a leading celebrations

Group. We view our culture as a key enabler

of growth, with a clear focus on customer,

community and purpose, ensuring customers

remain at the heart of decision making across

the business.

During the year, we have continued to

strengthen capability and leadership across

the organisation, investing in colleague

development, talent acquisition and the

overall colleague experience. This focus

supports an engaged and inclusive workforce,

enabling us to deliver for our customers and

progress our strategic priorities.

ESG progress

As we continue to integrate sustainability

into decision making across the business, our

focus remains on the areas where we can have

the greatest impact, including reducing our

environmental footprint, sourcing responsibly

and supporting the communities we serve.

During the year, we have advanced our

initiatives across these areas, supported

by improved governance and clearer

accountability. This includes ongoing work to

reduce emissions across our operations and

supply chain, strengthen responsible sourcing

practices and enhance our engagement

with colleagues and communities. As we

scale the business, we remain committed

to embedding ESG considerations into our

strategy and operations to support long-term,

sustainablegrowth.

Summary

Through FY26 we have expanded our role

in the celebrations market and continue to

see opportunities to increase our share of

customers’ annual celebration spend. While

near-term conditions remain uncertain, our

focus on disciplined execution, combined with

the resilience of the celebration occasions

market, provides a clear basis for sustainable

growth over the medium term.

Darcy Willson-Rymer

Chief Executive Officer

28 April 2026

See Our Strategy in action

onpages22–35.

Strategic Report Governance Financial Statements

Company Information

www

‘Opening Our

New Future’ strategy

As a successful value retailer, we combine disciplined cost

control with targeted growth initiatives that expand customer

relevance without eroding margins. cardfactory’s ‘Opening Our

New Future’ strategy reflects these principles, strengthening

our position as a leading celebration brand, while delivering

sustainable and profitable growth.

In FY26, we have continued to operate in a complex trading

environment and remained focused on progressing the core

drivers of our strategy, refining execution where required

and investing in the capabilities, channels and efficiencies

that underpin our long-term opportunity. Supported by the

execution and our ‘Simplify & Scale’ programme, we remain

confident in our strategic direction.

OUR STRATEGY

Strategic focus

Progressing our transformation into a

celebrationsbrand

We continue to evolve from a card-led retailer to a broader

celebration brand, expanding our role across cards, gifts

and celebration essentials. This evolution strengthens our

customer relevance and positions the business to grow within

the celebration market, both in the UK and internationally.

Driving revenue growth across our channels

Our strategy is focused on building sustainable revenue

growth across our three core channels – stores, digital and

wholesale partnerships. We continue to strengthen execution,

prioritise the most effective routes to market, and ensure

each channel is positioned to contribute sustainably to growth

over time. This multi-channel approach provides flexibility,

resilience and scalability, allowing us to reach customers in

different ways, while maintaining disciplined capital allocation.

Maintaining our focus on value

Maintaining strong value credentials remains central to our

proposition and competitive position across all markets.

By continuing to offer compelling value, supported by our

vertically integrated model and ongoing efficiency initiatives,

we retain customer loyalty, reinforce trust and protect our

market-leading position.

Card Factory plc Annual Report and Accounts 2026

www

Productivity and efficiency

Our ‘Simplify & Scale’ programme continues to underpin the strategy by strengthening productivity, efficiency and cost discipline across the business.

By simplifying ways of working and scaling proven processes, we are improving operational execution and ensuring the business remains resilient,

efficient and able to invest in our growth priorities.

Increasing share of

celebration markets

We are focused on increasing share by strengthening

our category performance, optimising space within

our stores and delivering product innovation across

our cards, gifts and celebration essentials ranges to

support longer-term growth in our core markets.

Reaching more customers

We are extending access to our celebration offer

through targeted store expansion, a growing

wholesale partnerships footprint and continued

development of our digital proposition, including

the integration of Funky Pigeon, with a focus on

scalability and effectiveness.

Unlocking international opportunity

We are taking a selective and measured approach

to international growth, prioritising opportunities

that align with our differentiated capabilities, value

credentials and disciplined capital allocation.

Vision:

To be a leading global celebrations Group with extensive UK & Republic of Ireland footprint and growing international presence.

Core business Building blocks of growth

UK & Republic of Ireland UK & Republic of Ireland UK & Republic of Ireland and International

Greeting Cards

Continue to grow

leadership position

in card

Gift and Celebration Essentials

Build share of Gifts

and Celebration

Essentials

Wholesale Partnership

Build out wholesale points of purchase

in UK & Republic of Ireland and in

identified international markets

Store Estate

Grow LFL sales,

optimise estate, including

fill in of under penetrated markets

Online

Digital destination

offering an extended and

complimentary offer to stores

£14.9bn

UK celebration

occasions

addressable

market

£80bn

International

market

opportunity

BUILDING BLOCKS OF GROWTH

1. UK addressable market comprises greeting cards (£1.6 billion), gifts (£11.8 billion) and celebration essentials (£1.5 billion): Global Data 2026.

Strategic Report Governance Financial Statements

Company Information

STRATEGY IN ACTION – INCREASING SHARE

Cards

The spring seasons, particularly Valentine’s

Day and Mother’s Day, performed well in

FY26, contributing to an improved market

share position during key events. We also

saw further share gains across the UK &

Republic of Ireland, driven by a more tailored

approach to demographic and regional

ranging, including enhanced plans for Easter,

Confirmation and Communion, alongside

differentiated Mam and Mom ranges to

reflectlocal preferences.

Our shift to a more dynamic range

management model continued, with

targeted pocket swaps replacing full range

changes, enabling faster response to trading

conditions and quicker removal of slow-

selling lines. Range development was further

supported by the rollout of our new premium

UK-designed and UK-manufactured offer,

across both spring seasons and everyday

categories. Value leadership was supported by

promotional execution, including successful

4 for 3 multibuy mechanics and a clear

pricearchitecture.

“Improving

store

productivity,

supporting

attachment

and enhancing

the customer

experience.”

Gifts and celebration essentials

During FY26, we continued to evolve our

gifts and celebration essentials offer, with a

focus on improving relevance, attachment

rates and value across key categories. In

wrap and bags, we refreshed the range to

simplify choice, improve availability and

enhance the customer shopping experience,

while embedding sustainability through fully

recyclable materials. A Good, Better, Best

framework was introduced to support clearer

customer choice, alongside the development

of a premium ‘Studio 41’ seasonal offer.

In party, we adopted a structured test-and-

learn approach to improve sales density and

customer engagement, while trial ranges

and new price architectures provided insight

to guide future investment. This supported

the successful expansion of the Halloween

range, where additional space, strong value

and targeted marketing delivered incremental

sales growth.

In gifting, we drove incremental performance

across priority categories through targeted

space and range initiatives. Stationery was

expanded to include back to school, and

our kids ranges were strengthened through

relevant licensed products, and milestone

birthday gifting improved through space

realignment and range simplification. We

also introduced a new Secret Santa range for

the Christmas season. Across the category,

value perception was protected, while product

mix supported average selling prices, with

strategic Christmas promotions driving both

value and volume. Sourcing and supply were

strengthened through improved supplier

collaboration and a more flexible supply

base, supporting quality, innovation and

costdiscipline.

Increasing

share of UK

& Republic

of Ireland

celebration

markets

Driving share growth through range

development and space optimisation

Increasing our share of the UK & Republic of

Ireland celebration markets remains a core

focusof our growth strategy. We are delivering

this through a combination of range development

and space optimisation, strengthening relevance

across celebration occasions, while improving the

productivity of our store estate.

Card Factory plc Annual Report and Accounts 2026

Optimising space to support category growth

As cardfactory’s celebration offer continues

to broaden, optimising store space has

become an increasingly important enabler

of growth. Rather than relying on large-

scale refits, the business has adopted a

targeted, flexible data-led approach to

space optimisation, allowing stores to

adaptas ranges evolve.

In selected trial stores, space has been

rebalanced to support growing categories

such as gifts and celebration essentials,

while maintaining clear leadership in cards.

Improvements to layout, adjacencies and

navigation have helped customers find

products more easily and encouraged

multi-category purchasing.

This approach has delivered stronger

productivity from existing space, supported

category growth and enhanced the

customer experience. We have achieved

thiswhile maintaining a disciplined

approach to capital investment through

targeted, capital-light interventions.

By optimising existing space rather

than relying on large-scale refits, we are

improving store productivity, supporting

attachment and enhancing the customer

experience, while maintaining a disciplined

approach to capital investment. As a result,

space optimisation continues to play a key

role in increasing share of the celebration

market across the UK & Republic of Ireland.

Interview with

Brian Waring

Q: What does increasing

share of the celebration

markets mean in

practice?

It’s about becoming

more relevant to customers

across more moments.

While cards remain at the

heart of what we do, by

expanding our gifts and

celebration essentials offer,

we’re able to meet more

of our customers’ needs in

a single visit and capture

a greater share of their

overallcelebrationspend.

Q: How has range

development evolved

in FY26?

We’re on a continuous

journey of range innovation

and expansion, using

insight and performance

data to guide decisions on

newness, range breadth

and pricing. The focus

has been on improving

breadth and relevance,

while protecting our value

credentials. That approach

isparticularly important in

the currentenvironment.

Q: What role does space

optimisation play in

supporting growth?

Space is one of our

most valuable assets. As our

offer expands, we need to

ensure space is allocated in

a way that reflects how our

customers shop today. The

work we’ve done allows us

to grow newer categories

without weakening our core

card ranges, which is crucial

to maintaining balance in

theestate.

Q: How do you

ensurechanges

deliverreturns?

We take a very

pragmatic, test-and-learn

approach. Space optimisation

is capital-light and data-led,

so we can see what works,

refine it and scale it across

the estate where appropriate.

That discipline gives us

confidence in the progress

we’re making.

CASE STUDY

Brian Waring

Executive Director

Customer and Commercial

Strategic Report Governance Financial Statements

Company Information

Initiative Objective Progress Results Next steps

Leadership

in card

Retaining position

as the UK’s leading

provider of cards.

• Drive seasonal performance.

• Demographic and regional ranging

including Easter, confirmation and

communion, alongside differentiated

mam/mom plans to meet

regionalpreferences.

• Dynamic range changing through

targeted pocket swaps rather than

fullend-to-end range changes.

• Range innovation with new ‘Studio 41’

premium range.

• Strategic promotional planning to

support value leadership.

• Strong growth across key seasons

of Valentine’s Day and Mother’s Day

driving market share improvement.

• Rapid removal of slow selling lines,

optimised stock flow and reduced

operational pressures to improve

overall productivity.

• Successful execution of 4 for 3 multibuy

promotions, combined with consistent

great-value product across all price

points supported customer retention,

and grew card sales volume by over 10%

during the promotional periods.

Further strengthen card market authority

through continued range innovation and

disciplined curation, supported by an

enhanced in-house product development

pipeline and collaboration with key supply

partners. We will deliver cost-efficient

newness through targeted range updates,

maintain demographic and regional

ranging, and support value perception

through considered promotional and

pricing initiatives.

Authority

in gifts and

celebration

essentials

Grow market

share within the

£13.3 billion gifts

and celebration

essentials market.

• Wrap and bags range modernisation

with roll wrap kit implementation

toimprove availability and reduce

in-store complexity.

• Sustainability embedded across the

wrap category.

• Clearer value and choice architecture

– introduction of Good/Better/Best

framework across wrap and bags.

• Party category development through

test-and-learn through space

realignment trials, clearer zoning and

trial ranges/new price architectures.

• Gifting range and space initiatives –

backto school stationery expansion,

kids licensed ranges, milestone birthday

simplification/space realignment,

springseasonal open gift ranges.

• Improved proposition clarity

and execution in wrap and bags,

strengthening availability and

simplifying store operation.

• Reduced packaging impact and

strengthened sustainability credentials.

• Clearer customer choice and stronger

future range discipline, with a

consistent framework to support range

architecture, pricing and promotions.

• Improved space productivity and

customer navigation in party.

• Incremental growth delivered across

gifting sub-categories, with stronger

seasonal execution and improved

relevance/credibility.

Continue to grow UK market share of the

£13.3 billion gifts and celebration essentials

market through targeted expansion of

key categories, including kids, licensed

and wedding, supported by disciplined

promotional planning, considered pricing

actions and ongoing space and range

optimisation to drive attachment and

category growth.

STRATEGY IN ACTION – INCREASING SHARE CONTINUED

Card Factory plc Annual Report and Accounts 2026

Initiative Objective Progress Results Next steps

Optimising

store space

Stronger

alignment of range

development

and store space

optimisation

enabling growth in

key categories.

• Targeted space rebalancing across

the estate to support the continued

expansion of gifts and celebration

essentials alongside market-leading

card ranges.

• Flexible, data-led approach to space

allocation, enabling stores to adapt

space in line with category performance

and customer demand.

• Capital-light delivery model, prioritising

targeted interventions over full

storerefits.

• Improved product adjacencies and

navigation, making it easier for

customers to shop across multiple

categories in a single visit.

• Improved support for category growth

without diluting the strength of the core

card offer, enabling broader celebration

missions to be fulfilled in-store.

• More responsive use of store space,

allowing stores to adjust as customer

behaviour and range mix evolved

through FY26.

• Strong returns on investment, with

space changes delivered efficiently

andminimal disruption to trading.

• Clearer customer journeys

and improved ease of shop,

supportingattachment and

multi-category purchasing.

Continue to scale space optimisation

selectively across the estate, prioritising

stores and categories with the greatest

growth potential. Further align space

allocation with range development and

seasonal planning to strengthen execution

around key trading events, while refining

space principles as our celebration offer

continues to expand.

Strategic Report Governance Financial Statements

Company Information

STRATEGY IN ACTION – REACHING MORE CUSTOMERS

Extending

access to our

celebration offer

across stores,

wholesale

partnerships

and digital

Reaching more customers is a central pillar

of our growth strategy and reflects our focus

on building multiple, complementary routes

to market. By strengthening our store estate,

scalingwholesale partnerships and developing

ourdigital proposition, we are extending access

to our celebration offer in ways that support both

near-term performance and long-term growth.

“We are evolving

the store estate

to continuously

improve how our

stores operate

and serve

customers.”

Store estate

In FY26, we continued to take a disciplined

approach to store expansion with 43 new

stores opened, 16 stores closed, of which

nine were relocations, bringing our total

at year-end to 1,117. We plan to open a

similar number of new stores in FY27.

Estate expansion focuses on opportunities

in underpenetrated locations, with the

Republic of Ireland demonstrating the

scalability of our proposition, while our

ongoing store relocation and expansion

strategy increased our presence in relevant

UK retail park locations and optimised our

highstreetestate.

We are investing in initiatives to enhance the

in-store customer experience and improve

operational effectiveness. This includes

the phased test-and-learn rollout of a new

hybrid point of sale (till) system (see page

33), designed to reduce queuing, improve

customer service and support better

on-shelf availability through more effective

management of store labourhours.

Wholesale partnerships

Wholesale partnerships provide a scalable and

capital-efficient way to reach new customers

beyond our owned estate, both in the UK and

internationally. During FY26, we successfully

delivered the first phase of the new The Reject

Shop contract in Australia, with the second

phase now completed and our new third-

party logistics provider delivering high levels

of on-shelf availability. Like-for-like sales are

improved, including across the Christmas

period. In the UK & Republic of Ireland, our

everyday range continues to perform robustly

in Aldi through our full-service model, while at

Christmas we expanded the offer to include

gift bags, cards and boxed cards, with sales

ahead of expectations.

Digital

In digital, FY26 marked a period of reset and

integration. Following the closure of Getting

Personal and in light of the acquisition of

Funky Pigeon, we took the opportunity

to reset and restructure the ranging and

fulfilment approach for our digital business to

improve profitability within cardfactory.co.uk.

The acquisition enhances our technology

capabilities, expands our customer base and

provides the potential to further strengthen

our omnichannel proposition so that

customers can seamlessly access a broader

celebration range across stores and online.

While cardfactory remains the UK’s leading

card retailer, there is clear headroom to grow

online market share, particularly through

a scalable card and gift-attached offer that

can leverage the extensive 24 million store

customer base to drive our digital growth.

Thiswill provide a structurally profitable

online platform within cardfactory, built

around key elements of our vertically

integrated model, especially our studio

andfulfilment capabilities.

Card Factory plc Annual Report and Accounts 2026

CASE STUDY

Interview with

Steve Lilley

Q: How are you

evolving the store

estate to improve the

customer experience,

while maintaining

disciplinedgrowth?

We are evolving the store

estate to continuously improve

how our stores operate and

serve customers, while taking

a disciplined and selective

approach to investment.

Alongside our store expansion

strategy, we are investing in

initiatives that improve the

in-store experience, including

layout optimisation and

colleague capability. ‘The

cardfactory Way’ training

programme continues to

play a key role, equipping

colleagues with the skills and

behaviours needed to deliver

consistent, high-quality service

as our offerbroadens.

Q: What role does

the store estate play

in reaching more

customers as the offer

continues to broaden?

The store estate remains

the primary way customers

experience cardfactory and

is central to how we reach

and retain customers. By

enabling customers to

meet multiple needs across

cards, gifts and celebration

essentials in a single visit,

stores support repeat visits

and help us capture a greater

share of customers’ overall

celebrationspend.

Q: How has your

approach to store

expansion and

relocations evolved as

the business grows?

Our approach to

expansion and relocations

continues to reflect the

need to adapt to changing

consumer footfall trends,

while maintaining a highly

resilient store portfolio.

We remain focused on

operating a predominantly

low-cost estate, supported

by flexible lease structures,

typically with three-to-five-

year break clauses, and with

exceptionally few loss-making

stores across the portfolio.

Relocations play an important

role in this, allowing us

to move stores to better

trading positions within

existing catchments, while

maintaining a disciplined

costbase.

Q: How do you ensure

stores remain

productive and resilient,

while continuing to

invest in value?

Productivity and

resilience come from

balancing efficiency with

continued investment in

value and service. We focus

on simplifying operations,

improving the use of store

labour hours and managing

cost pressures, while

maintaining strong value

credentials that drive footfall.

Our point of sale (till) trial and

future rollout (see page 33) is

an example of this approach.

Together, these actions

ensure stores can adapt as

customer behaviour evolves,

while continuing to play a

central role in driving footfall

and progressivegrowth.

Steve Lilley

Executive Director

for Retail

Expanding our store estate in the

RepublicofIreland

The Republic of Ireland provides a clear

example of how cardfactory’s store strategy

is enabling the business to reach more

customers through disciplined, profitable

expansion. Since entering the Irish market

in 2017, we have grown the estate steadily,

building a meaningful presence in an

underpenetrated market, while applying

the same principles that underpin the UK

storestrategy.

Now totalling 48 stores (as of 31January2026),

growth in the Republic of Ireland has been

entirely organic, allowing the business to

apply a consistent and established approach

to site selection built around the core

principle of lower cost, flexible leases with a

target three-to-five-year break clause. The

focus has been on getting locations right

first time by selecting appropriate store sizes

and locations to meet local demand, while

maintaining a low-cost operating model that

delivers payback in 24 months.

In the UK, alongside a similar underpenetrated

location expansion approach, relocations

are a normal and established part of how

the estate is actively managed, allowing the

business to respond to changes in footfall

patterns, improve store economics and

address operational constraints where

required. While no relocations have been

undertaken in the Republic of Ireland to

date, the same disciplined approach will be

applied in future where it supports improved

performance or customer experience, as the

estate continues to mature.

As the Irish estate has expanded,

cardfactory has moved from a more

regional presence that was initially focused

around Dublin to achieving nationwide

coverage so that there are cardfactory

stores within convenient reach of the

majority of the population. The opening

of two new shopping centre locations

on the main M50 corridor (around

Dublin) has been particularly significant,

completing a nationwide footprint and

improving accessibility to the brand across

key population centres. This milestone

strengthens brand awareness and provides

a platform for continued growth.

Together, these factors have supported

the development of a resilient and scalable

store portfolio in the Republic of Ireland,

with very limited cannibalisation given the

level of remaining white space. This will

see the Irish estate grow by approximately

50% over the next five years with future

expansion focused on selectively filling

underpenetrated locations, while applying

proven estate disciplines to support

sustainable performance.

New stores in the Republic

of Ireland in FY26

+7 (+17%)

Strategic Report Governance Financial Statements

Company Information

Initiative Objective Progress Results Next steps

Stores

To deliver profitable

growth from

an extensive

and disciplined

store estate by

driving footfall,

productivity and

customerrelevance.

• Disciplined store expansion and

relocations, targeting underpenetrated

locations and improving performance

within existing catchments.

• Continued growth in the Republic of

Ireland, alongside selective expansion

in the UK.

• Investment in customer service and

experience, supported by layout

optimisation and colleague capability.

• Rollout of ‘The cardfactory Way’ training

programme continued, strengthening

service consistency, colleague capability

and customer engagement in stores.

• Phased rollout of the new hybrid point

of sale (till) system, improving service

flexibility and operational efficiency.

• Strong focus on cost discipline,

supported by low-cost, flexible

lease structures and active

portfoliomanagement.

• Sustainable growth in store reach, while

maintaining a highly resilient estate with

exceptionally few loss-making stores.

• Improved performance across priority

locations, strengthening returns within

existing catchments.

• Consistent in-store service standards,

supporting customer satisfaction and

repeat visits as the offer broadens.

• More consistent service delivery and

colleague engagement, reinforcing

the customer experience at the point

ofinteraction.

• More efficient use of store hours and

improved transaction flow, supporting

productivity and service at peak times.

• A robust store portfolio, well positioned

to perform through changing footfall

patterns and cost pressures.

Continue disciplined store expansion

and active estate management, including

relocations, with a clear focus on footfall

strength and cost control. Progress the

rollout of the hybrid point of sale (till)

solution (see page 33) to optimise store

configuration and labour deployment,

while further strengthening productivity

and service delivery as our celebration

offer continues to broaden.

Digital

Unlocking digital

growth through a

card attached gift

and celebration

andparty focus.

• Acquisition of Funky Pigeon,

strengthening the Group’s market

position and capability in online ‘card

plus’ and direct-to-recipient market

segment following the orderly exit from

Getting Personal.

• Integration of Funky Pigeon into the

Group, upweighting in-house technology

capabilities and advantage from the

Funky Pigeon platform.

• Reset of digital ranging and fulfilment,

leveraging combined studio, sourcing

and fulfilment capabilities.

• Enhanced digital capability in

personalised celebrations creating a

structurally profitable business with

strong foundation for growth.

• A more resilient and controlled digital

operating model.

• Improved flexibility in digital fulfilment

and content creation, supporting future

growth and scalability.

Complete the integration of Funky Pigeon

across systems, fulfilment and commercial

planning to establish a scalable and

structurally profitable digital platform.

Leverage the Group’s 24 million store

customer base to drive digital acquisition

and engagement, while continuing to

evolve the online offer and customer

journey in alignment with our vertically

integrated model.

STRATEGY IN ACTION – REACHING MORE CUSTOMERS CONTINUED

Card Factory plc Annual Report and Accounts 2026

Initiative Objective Progress Results Next steps

Wholesale

partners

To extend the reach

of the cardfactory

proposition through

scalable, capital-

light wholesale

partnerships.

• Delivery of the first phase of the new

The Reject Shop contract, with Phase 2

now completed.

• Expansion of the Aldi partnership,

including the introduction of additional

ranges at Christmas.

• Continued development of international

wholesale businesses, including Garven

and Garlanna.

• Restructuring SA Greetings to support

the operating model.

• Successful execution of the new

contract with The Reject Shop,

supporting improved performance.

• Robust performance in Aldi, with

everyday ranges performing well

andChristmas ranges trading ahead

ofexpectations.

• Growth in international wholesale, with

Garven and Garlanna performing in

line with expectations and expanding

customer reach.

• A stable and focused operating model

atSA Greetings, providing the platform

for future performance.

Build on existing wholesale relationships

through ongoing range development and

operational enhancements, and further

strengthen international wholesale

platforms, with North America remaining

akey target market for growth.

Strategic Report Governance Financial Statements

Company Information

STRATEGY IN ACTION – REACHING MORE CUSTOMERS CONTINUED

Funky Pigeon: accelerating

our digital capability

Extending our celebration offer through a scalable digital platform

In August 2025, we completed the acquisition of Funky Pigeon, a significant

step in accelerating our digital strategy and strengthening our position as a

leading celebrations retailer.

While cardfactory is the UK’s leading specialist

card retailer, we see clear headroom to grow

our online market share through both our

existing cardfactory.co.uk site and Funky

Pigeon. In particular, we are well placed to

drive growth through a compelling card and

gift attachment offer online that leverages

ourexisting marketstrength.

Funky Pigeon also complements our

nationwide store estate and existing

omnichannel capabilities. As we continue

to broaden our celebration offer, the

opportunity is to extend our store-based

party and celebration offer through

cardfactory.co.uk. This will enable both

in-store and online customers to seamlessly

access an extended range through our

omnichannel services.

The integration of Funky Pigeon strengthens

this proposition by enhancing our technology

capabilities and accelerating our card and gift

attached online offer, alongside the benefit of

a large, established customer base.

“Well placed to

drive growth

through a

compelling card and

gift attachment

offer online.”

Integration is progressing in line with

expectations. Our priorities are to reconfigure

the manufacturing and fulfilment approach to

make best use of our manufacturing facility

in Yorkshire alongside the existing Funky

Pigeon fulfilment facility in Guernsey. This

will provide the flexibility required to offer

direct delivery or an in-store collection service

for our customers at advantageous costs for

ourbusiness.

At the same time, we are progressing at pace

the strategic planning that will determine how

we take full advantage of the Funky Pigeon

platform for both our sites. And finally, we

are undertaking extensive product review

and planning, so that we are offering the

rightrange.

Looking ahead, we also plan to enhance

datacapabilities across our 24 million unique

store customers, enabling us to leverage

insight more effectively across digital and

omnichannel touchpoints. Together, these

actions support the development of a

structurally profitable online platform within

cardfactory and provide a strong foundation

for disciplined digital growth.

Card Factory plc Annual Report and Accounts 2026

Strategic Report Governance Financial Statements

Company Information

STRATEGY IN ACTION – DRIVING EFFICIENCIES

A structured,

multi-year

programme

to mitigate

inflation

and protect

performance

Over the past three years, inflation added

more than £60 million to the Group’s cost base.

While inflation itself is outside our control, our

response to it is not. Through our structured,

multi-year ‘Simplify & Scale’ programme,

we consistently mitigate inflation through

efficiencies, productivity improvements and

disciplined range and pricing actions.

‘Simplify & Scale’ is embedded across the

business and focuses on eliminating

non-value-added and manual activities,

reducing duplication, streamlining operations

and optimising how we range, price and

operate. The programme spans stores, supply

chain,sourcing, online fulfilment and the

support centre, and is designed to deliver

sustainable efficiencies rather than

short-term costreduction.

During FY26, the programme delivered

meaningful progress. In the first half

of theyear, we achieved £9 million of

efficienciesthrough a combination of

end-to-end operational streamlining and

range optimisation, including pricing.

Actions included the insourcing of printing

and distribution of store merchandising

materials, optimisation of warehouse and

agency labour, and the delivery of a 9%

efficiency improvement across the store

estate. As in prior years, the phasing of

benefits was weighted towards the second

half, reflecting the timing of implementation.

Across the full year, ‘Simplify & Scale’

enabled the business to offset £21 million of

inflation, which was the significant majority

of inflationary pressures. Further efficiencies

were delivered through the automation

of support centre back-office tasks and

processes, alongside additional store labour

efficiencies enabled by the rollout of the new

point of sale (till) system (see case study on

page 33). This included streamlined back-of-

store activities and the pilot of hybrid tills,

supporting more effective use of store hours,

while maintaining service standards.

‘Simplify & Scale’ remains a core enabler

of the Group’s strategy. By mitigating

inflation and improving productivity, the

programme protects our ability to invest in

growth, maintain strong value credentials for

customers and support disciplined financial

performance. It has proven effective through

FY26 and continues to underpin the resilience

and sustainability of the business.

Efficient

new way

of working

Efficient

range including

pricing

Efficient

purchasing

Support

centre

efficiency

Supply

chain

efficiency

‘Simplify & Scale’

Building a sustainable and

profitable business

Store

operations

efficiency

Card Factory plc Annual Report and Accounts 2026

Interview with

Matthias Seeger

Q: Why is ‘Simplify &

Scale’ a permanent

feature of how the

business operates,

rather than a short-term

response to inflation?

‘Simplify & Scale’ is

designed to be structural, not

reactive. Inflation may change

year to year, but the need to

operate efficiently does not.

The programme provides

a consistent framework for

challenging how we work,

removing complexity and

ensuring that productivity

improvements are sustained,

rather than relying on

one-off actions.

Q: How do you ensure

efficiency initiatives

do not undermine

service or the

valueproposition?

Efficiency for us is

about removing waste, not

reducing capability. We focus

on eliminating duplication,

manual activity and

complexity so that time and

resource can be redirected

towards serving customers

and protecting value. That

discipline ensures efficiencies

support, rather than

compromise, the customer

experience.

Q: What distinguishes

‘Simplify & Scale’ from

traditional cost-saving

programmes?

The key difference is that

‘Simplify & Scale’ is embedded

across the organisation and

linked to how decisions are

made day to day. It spans

stores, supply chain, sourcing

and the support centre, and

is focused on productivity

and effectiveness, not just

reducing cost lines.

Q: How does ‘Simplify &

Scale’ support delivery

of the wider strategy?

By mitigating inflation

and improving productivity,

the programme creates

headroom to invest

elsewherein the business.

Itsupports disciplined

financial performance,

while enabling continued

investment in growth

initiatives and maintaining

strong value credentials

forcustomers.

Matthias Seeger

Chief Financial Officer

CASE STUDY

Hybrid point of sale enabling store productivity

During FY26, we completed an initial trial of

a new hybrid point of sale till (PoS) solution

for our stores as part of our ‘Simplify &

Scale’ programme. This investment is

designed to improve productivity, in-store

customer service, and operational flexibility

within our store estate. The trial was

deliberately designed to test the solution

across different trading environments and

customer profiles.

Three stores were selected to reflect the

diversity of the estate: a large, high-volume

flagship location, a smaller high-street

store serving a more mature customer

demographic, and a retail park store. The

trial was launched ahead of the Christmas

trading period so that we could assess

performance both outside of, and during,

apeak season.

The hybrid PoS solution is a first for UK

retailers. The system can act as either a

normal staffed till or, by turning the till

screen around, as a self-service checkout

for customers. By operating seamlessly

alongside traditional staffed tills we

have the benefit of flexible transaction

options that allow the service model to

be adapted by store type rather than

applying a single, standardised approach.

The trial demonstrated that the optimal

configuration varied by location, store

type and demographic, reinforcing the

importance of tailoring solutions to

customer behaviour and store dynamics.

Early learnings highlighted several potential

benefits, including improved transaction

flow, reduced queuing at peak times and

greater flexibility in colleague deployment.

During the trial, an average of c.40% of

customers used the self-serve PoS systems

with over 60,000 transactions processed.

As part of our wider PoS upgrade, tasks

that were traditionally completed in the

back office could also be carried out on the

shop floor, increasing colleague presence

with customers and supporting more

efficient use of store hours. The new system

also addressed legacy technology and

securityconsiderations.

The trial has provided valuable insight into

how the hybrid PoS model will support

both service and efficiency objectives.

Based on these learnings, the next phase

will expand the trial to a broader group of

stores to inform future decision making

on configuration and rollout, ensuring the

approach remains disciplined, scalable

andaligned to store performance.

Transactions processed

60,000

Customer engagement

40%

Strategic Report Governance Financial Statements

Company Information

STRATEGY IN ACTION – DRIVING EFFICIENCIES CONTINUED

Initiative Objective Progress Results Next steps

‘Simplify

& Scale’

productivity

and efficiency

programme

To mitigate

inflationary cost

pressures and

protect the Group’s

ability to invest in

growth and value.

• Continued delivery of the multi-

year ‘Simplify & Scale’ programme,

embedded across stores, supply chain,

sourcing and the support centre.

• End-to-end operational streamlining,

removing non-value-added and manual

activities and reducing duplication.

• Range and pricing optimisation,

supporting productivity and value.

• Insourcing of merchandising print

and distribution, reducing cost

andcomplexity.

• Optimisation of warehouse, agency

and store labour, supported by process

improvements and new systems.

• Automation of support centre

back-office processes, improving

efficiency and scalability.

• Phased rollout of the new point-of-sale

system, including hybrid PoS, enabling

more efficient store operations and

labour deployment.

• A structured and repeatable approach

to efficiency, enabling consistent

delivery rather than one-off cost actions.

• Improved operational productivity

across the business.

• More efficient range execution and

pricing discipline, protecting value

forcustomers.

• Reduced external dependency

and improved cost control in

merchandisingoperations.

• Improved use of labour hours across

stores and distribution, supporting

productivity and service.

• A more efficient and scalable support

centre, better aligned to the needs of

the business.

• Greater flexibility in store labour

deployment and transaction processing,

supporting productivity, while

maintaining service standards.

Continue to scale the ‘Simplify & Scale’

programme across the business,

embedding productivity and efficiency

improvements in core operations.

Progress furtherautomation and process

simplification within the support centre,

build on PoS-enabled efficiencies to

enhance store productivity, and maintain

disciplined cost management to mitigate

inflationary pressures.

Card Factory plc Annual Report and Accounts 2026

Strategic Report Governance Financial Statements

Company Information

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

At cardfactory, our purpose – making,

sharing in, and celebrating life’s moments

special and accessible for everyone – is

supported by effective environmental,

social and governance (ESG) practices.

Together, these reduce risk and support

efficient growth and long-term value

creation, key elements of enabling

resilience in retail.

This year, we continued to embed our

‘Delivering a Sustainable Future’ strategy

across decision making and operations.

Ourapproach focuses on delivering

measurable progress across environmental

impact, responsible sourcing, colleague

wellbeing and strong governance, while

improving efficiency and creating value

forevery celebration for our customers.

Our approach focuses on

delivering measurable progress.”

We have strengthened our governance

measures, completing a new materiality

assessment (see page 37) and strengthening

sustainability risk management to ensure that

we focus on the environmental and social

topics that matter most to our stakeholders

and long-term growth. These activities guide

board decisions and align sustainability with

our wider business strategy.

Policies to realise the priorities focus initially on

minimising of waste, phasing out non-essential

single-use plastic, ensuring compliance with

new packaging and waste legislation and

reduction of Scope 1 and 2 emissions.

Details of our progress, including

climate-related financial disclosures,

canbefound on pages 39 to 55.

Our ESG Report

‘Delivering a

Sustainable Future’

Card Factory plc Annual Report and Accounts 2026

Findings and resulting priorities

In 2025, we engaged external specialists

to complete a comprehensive materiality

assessment for our core UK & Republic of

Ireland cardfactory business. This assessment

applied a double materiality lens, evaluating

both how ESG factors impact cardfactory’s

financial and strategic performance, and

how our operations impact people and

the planet. The process engaged over

1,300 stakeholders, including colleagues,

customers and suppliers, alongside internal

workshops, sector benchmarking and desk

research to reflect investor and partner

priorities. The assessment evaluated ESG

topics most relevant to the retail sector and

cardfactoryspecifically.

The resulting materiality matrix (see graphic)

maps 22 ESG topics by their importance to

stakeholders and impact on cardfactory, with

nine found to be highly material. Findings

show a balanced spread across ESG themes

within our highly material issues, with a

notable emphasis on colleague-related

topics and governance fundamentals. Fair

pay and employment terms, employee

health and wellbeing, and data security and

privacy emerged as top priorities, reflecting

cost-of-living pressures and heightened

cybersecurity risks. Environmental topics such

as protecting nature and wildlife, carbon and

other Greenhouse Gas (GHG) emissions, and

waste from operations also rank highly, driven

by regulatory requirements, stakeholder

expectations and financial impact.

These insights have informed a review of

our ‘Delivering a Sustainable Future’ Group

sustainability strategy and where we place

most focus. The findings indicated that the

strategy and related risk mitigations currently

address our most material issues, but we

have updated our supporting commitments

to ensure these reflect areas with greatest

impact and stakeholder interest. Fair pay and

employment terms, and colleague wellbeing

will remain a priority. In terms of the

environment, protecting nature and wildlife

and supply chain transparency will require

greater focus as we continue to expand our

gifting and celebration essential categories.

Reducing waste from our operations will

remain a priority from both a financial and

sustainability perspective, with increased

emphasis placed on reducing helium waste.

Governance priorities, including responsible

business conduct and data security, will remain

central to our reporting and risk management.

In addition, emerging issues impacting retailers

and highlighted within the assessment,

including supply chain transparency, impact

of climate change on colleague wellbeing, and

responsible use of AI, will be monitored closely.

Focusing our strategy and commitments

on these material priorities will enable

us to continue to deliver meaningful and

measurable progress on ESG risks and

opportunities, ensuring long-term value

for all our stakeholders. The refreshed

Group strategy will also underpin further

engagement with our acquired businesses,

building on their existing GHG emissions

reporting to ensure alignment and support

localised implementation.

Impact

Importance to stakeholders

Monitor

Stakeholder concerns

Strategic priorities

Highly material

2025 materiality assessment

1. Waste from our operations

2. Product and packaging waste in

customers’homes

3. More eco-friendly products

4. Single-use plastic

5. Helium use in balloons

6. Carbon and other GHG emissions

(Scope 1, 2 and 3)

7. Working with suppliers to improve their

environmental performance

8. Adapting to impacts of climate change

9. Protecting nature and wildlife

10. Water use

11. Community engagement

12. Inclusive product ranges

13. Hiring and training practices that help

get people into the workplace

14. Diversity, equality & inclusion

15. Employee health & wellbeing

16. Fair pay & employment terms

17. Colleague education & training

18. Human rights in our supply chain

19. Responsible running of the business

20. Data security & privacy

21. Responsible communications

22. Sustainability embedded in decision making

Environmental topic Social topic Governance topic

Strategic Report Governance Financial Statements

Company Information

Waste Reduction

We will minimise waste

generated acrossour business

and in our customers’ homes.

• Reduce waste by driving

efficiency and optimising use of

materials and natural resources.

• Reduce product waste through

betteruse of data and insight.

• Address product end-of-life,

identifying opportunities for

re-use and recycling.

People and Community

We will actively champion the

wellbeing of everyone within

our business and communities

by creating an environment that

allows them to thrive.

• Support colleague health and

wellbeing through a strong

colleague offering and fair reward.

• Maintain an inclusive culture

where difference is celebrated.

• Extend our care beyond

our business to support the

communities we serve.

Protecting Nature

We will operate in a way

that reduces harm to our

planet and helps restore our

naturalenvironment.

• Design and source products

and packaging that minimise

virgin material use and

maximiserecyclability.

• Work with our suppliers to

reducetheir impact on nature

andthe environment.

• Develop partnerships to

restorenature.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONTINUED

Our refreshed ‘Delivering a Sustainable Future’ strategy

Climate Action

We will reduce our

emissions to deliver

Net Zero by 2050.

• Establish and deliver a Net Zero

pathway for the Group.

• Decarbonise operations

through clean energy and

energy optimisation.

• Improve operational efficiency

across our business and

supplychain.

• Collaborate with our top

suppliers todecarbonise.

Governance

We will build our resilience and operate with transparency and integrity, embedding sustainability in everything we do.

• Identify, monitor and manage sustainability risks.

• Strengthen sustainability data, measurement and reporting to inform decision making and demonstrate progress.

• Embed sustainability into decision making and operational processes across the Group.

• Maintain and strengthen our sustainable business policies and procedures.

The following updated strategy reflects the findings of our 2025 materiality assessment

Card Factory plc Annual Report and Accounts 2026

Climate Action

We will reduce our emissions

to deliver Net Zero by 2050.

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.

Over the last year, we have

delivered reductions across Scope

1 and 2 emissions. This progress

has been driven by the steps we’ve

taken towards decarbonisation

of our UK operations, creating a

solid foundation for further action

over the coming months as we

continue to find new ways to

drive down our emissions.”

cardfactory

Sustainability Manager

FY26 progress highlights

Full emissions data and climate disclosures are detailed on

pages 44 to 55.

• We have delivered two key decarbonisation initiatives across

our UK operations:

– Completed rollout of an artificial intelligence energy

management platform

across all cardfactory sites,

delivering507,197 KWH and £143k savings, equivalent

topowering 20stores for a year.

– Replaced our 25 diesel vans with plug-in hybrid electric

vehicles and added one fully electric van for short journeys,

reducing total average emissions by 144 tCO

e each year.

• Following our acquisitions, we have focused on strengthening

our emissions data to create a solid foundation for our

NetZerotransition plan and ensure this reflects the current

boundaries of our business and growth plans.

• We are reviewing supply chain climate risks as part of

our annual climate-related disclosures analysis, with a

wider reviewof climate-related risk ongoing as part of our

sustainability risk register.

1. Targets set in 2024 (compared to the FY22 base

line) adopting the SBTi industry approach, which

are subject to review in line with any changes to the

baseline year.

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.

Plans for FY27

• Develop a robust, practical decarbonisation strategy and

supporting action plan aligned with our growth objectives.

This strategy will include transitioning to clean energy

sources and the supplier engagement required to reduce

our Scope 3 emissions.

• Continue to monitor evolving climate change-related risk

across our operations and supply chain.

• Undertake review of export shipping logistics and packaging

to optimise routes and loads from the UK to our international

operations, reducing transport-related emissions.

How did we do?

Achieved

In progress

Still to be achieved

Strategic Report Governance Financial Statements

Company Information

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONTINUED

Waste Reduction

We will minimise waste generated

across our business and in our

customers’ homes.

Goals

• Find opportunities to use less

materials and reduce waste across

our business.

• Identify initiatives and partnerships

to address product end of life.

Protecting Nature

We will operate in a way

that reduces harm to our

planet and helps restore our

naturalenvironment.

Goals

Identify and mitigate impacts of

our business on nature.

FY26 progress highlights

• Our own-label soft toy fillings are now

made from 100% recycled materials.

• Our new own-label roll wrap is now

fully recyclable and no longer includes

cellophane wrap.

• Our Printcraft manufacturing facility

has eliminated use of bubble wrap,

replacing it with cardboard shredding

to reduce single-use plastics and reuse

waste materials.

• We have made further progress in

introducing fully recyclable own-label

products and packaging, and reducing

non-essential single-use plastics;

we have retained limited non-recyclable

options where required, including for

some gift bag handles, to reflect wider

sustainability considerations or to

maintain product quality and value.

FY26 progress highlights

• We have aligned our nature impact

review with European Deforestation

Regulation (EUDR) requirements, with

completion now planned for December

2026 following the extension of the

regulatory deadline.

• We signed a two-year biodiversity

partnership with GreenTheUK

in September2025 to plant

24,000 climate-resilient trees

and restore fivehectares of

wildflower-rich meadows.

How did we do?

Achieved

In progress

Still to be achieved

Plans for FY27

• Deliver further product packaging

improvements to support reduction,

recyclability and regulatory compliance.

• Reduce virgin plastic use by increasing

recycled content in products and

packaging, in line with current and

upcoming regulation.

• Explore export shipping waste reduction

options, including better packaging to

reduce product waste, and use of

reusable/recyclable transit packaging.

• Implement and measure helium waste

reduction strategy, in line with materiality

assessment findings, eliminating system

leaks and driving more efficient in-store

use through colleague training.

Plans for FY27

• All products in-scope will be

compliant with EUDR requirements

by 30December2026.

• Continue our partnership with

GreenTheUK.

Card Factory plc Annual Report and Accounts 2026

FY26 progress highlights

For updates on our colleague initiatives,

please the Our Colleagues section on

pages60to 62.

• Donated £1.3 million raised

from carrier bag sales to

The cardfactoryFoundation.

• Donated £517k to Macmillan Cancer

Support, taking the total raised since

2006 to more than £9.2 million.

How did we do?

Achieved

In progress

Still to be achieved

People and Community

We will actively champion the

wellbeing of everyone within our

business and our communities

by creating an environment that

allows them to thrive.

In FY26, cardfactory donations have funded a

transformational year for the Foundation.”

Pushpinder Gill

Head of The cardfactory Foundation

We are incredibly proud to have

launched a major new flagship

partnership with Centrepoint through

the Foundation’s Life Moments Fund,

committing £1.5 million over three years

to support young people experiencing

homelessness. In its first year alone,

the partnership has delivered specialist

mental health therapy, trauma-informed

training for hundreds of frontline

staff and the physical transformation

of Centrepoint properties into safe,

welcoming homes.

This is helping ensure young people

facinghomelessness have the

professional support and stable

foundations they need to move toward

independent living and abrighter future.

Also this year, our Matched Giving Fund

has donated almost £59,000 to double

cardfactory colleagues’ fundraising for

thecauses that matter most to them,

and our Local Community Fund has

awarded 91 x £5,000 grants to charities.

Together, these initiatives demonstrate

our unwavering commitment to

empowering cardfactory colleagues

andstrengthening the communities

where we live and work.

Plans for FY27

Continue to support The cardfactory Foundation and charity partners.

Goals

• Continue to support The cardfactory

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.

Strategic Report Governance Financial Statements

Company Information

cardfactory operates with transparency

and integrity, embedding sustainability

and climate considerations into all aspects

of governance, operations and decision

making. Actions and initiatives within our

sustainability strategy are assigned to

individual leads within a range of relevant

business areas across our Group.

Our governance framework ensures:

• Clear Board oversight of sustainability-

related matters, including climate-

related risks and opportunities.

• Defined management responsibilities

for implementing sustainability and

climate strategy.

• Integration of sustainability and climate

considerations into risk management,

strategic planning and executive-level

remuneration.

• Compliance with mandatory

climate-related financial

disclosurerequirements.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONTINUED

Oversight of sustainability and climate-related risks

For more information see the Corporate

Governance Report on pages 84–89.

Board oversight of climate-

related risks andopportunities

The Board ensures that climate-related

risks and opportunities are appropriately

considered within strategic planning,

financial decision making and the Group’s

broader risk management processes.

Thisoversightincludes:

• Reviewing the resilience of the Group’s

strategy against relevant and/or emerging

climate-related risks.

• Considering climate-related factors

when reviewing majorplans of action,

annual budgets, business plans

andriskmanagement.

• Using insights from sustainability and

emissions reduction activity, and climate

risk assessments across the Group to

inform strategic decisions.

While the impact of climate change on the

business is factored into decision making,

it is considered a strategic risk rather than

a critical risk within the Group’s framework,

due to the mitigation measures in place. As

such, the Board has delegated oversight to

the Audit & Risk Committee, which reviews

the risk status annually, with the processes for

managing risks, outlined on pages 72 to77.

The Group has not undertaken divestitures

and climate considerations have not

historically formed a material component

of major capital projects or acquisitions.

However, the Board keeps under review the

potential relevance of climate-related factors

to future investment decisions as the external

risk landscape continues to evolve.

Management’s role in identifying,

assessing, and managing climate-

related issues

cardfactory’s management is responsible for

the day-to-day identification, assessment and

management of sustainability and climate-

related risks and opportunities in line with the

Group Risk Management Framework. Senior

leaders review climate-related risks through

the Sustainability Steering Group (SSG) and

functional governance forums, which maintain

the sustainability and climate risk registers,

and oversee delivery of the ‘Delivering a

Sustainable Future’ climate action plan.

Management receives climate-related

information through monthly SSG meetings,

periodic risk reviews, sustainability

performance reporting and engagement

with stakeholders on emerging issues.

These structured processes ensure that

material risks or significant developments

are escalated promptly through the Chief

Financial Officer to the senior management

team, the Board and its Committees via

established reporting and oversight channels.

Governance

Sustainability and climate-risk governance

Card Factory plc Annual Report and Accounts 2026

The diagram below shows cardfactory’s sustainability and climate risk governance structure, and the flow of

information betweeneach element.

Board

• Ultimate accountability and oversight of sustainability

and climate-related risks andopportunities.

• Evaluates ESG and climate change as strategic risks within

the Group RiskRegisters.

• Approves the Group’s sustainability strategy and ensures

progress against agreedmilestones.

• Receives biannual updates on ESG and climate

performance, including risk assessmentsand

mitigation plans.

Remuneration

Committee

• Oversees compensation

and benefits, including

how sustainability

and climate-related

performance metrics

are reflected in senior

management team

variable pay outcomes.

• Executive remuneration

includes ESG

underpins to reinforce

accountability.

Audit & Risk

Committee

• Oversees and

advises the Board on

risk-related matters,

including climate and

key ESGrisks.

• Reviews ESG compliance

and climate change risk

on annual reporting.

• Any potential

emerging risks are

reviewed at each

Committeemeeting.

• Receives annual

updates on principal

risks, including

‘ESGcompliance and

climate change’.

Board responsibilities

Chief

Financial Officer

• Holds executive-level

accountability for sustainability

strategy implementation and

ownership of climate risk.

• Receives regular and

detailed updates on climate

risk management from

keystakeholders.

• Member of Sustainability

Steering Group, overseeing

senior-level integration of ESG

and climate considerations into

operational decision making.

• Responsible for Board

and senior management

teamupdates.

Senior

managementteam

• Receives regular updates on

actions and priorities from

the SSG and Prevention &

ComplianceCommittee.

• Discusses emerging risks to

determine whether to escalate to

Audit & Risk Committee.

• Reviews Group risks and

mitigations on a rolling basis.

Prevention &

ComplianceCommittee

• Forum to discuss cross-functional

issues ahead of escalation to

senior management team.

• Receives ESG compliance

andreporting updates at

least six-monthly.

Sustainability

SteeringGroup

• Includes representatives from

thebusiness.

• Meets monthly to support and

direct delivery of sustainability

strategy and climate action plan.

• Maintains and supports

thesustainability risk

sustainabilitystrategy.

• Review ESG and climate reporting

and progress to targets.

Sustainability

Leader

• Operates sustainability and

climate risk registers.

• Oversees delivery of sustainability

strategy and action plans.

• Provides bi-monthly updates

to the CFO, and quarterly to

Prevention & Compliance

Committee on risk and progress

of sustainability strategy.

Functional

leadershipteams

• Identifies and supports the

assessment of sustainability

and climate-related risks

andmitigation.

Management responsibilities

Strategic Report Governance Financial Statements

Company Information

CLIMATE CHANGE AND TCFD

This section of the Annual Report outlines

how the Group identifies, manages and

responds to climate-related risks and

opportunities to protect long-term value

and support resilient growth. It presents

our climate-related financial disclosures in

accordance with the Companies (Strategic

Report) (Climate-related Financial Disclosures)

Regulations 2022 and Listing Rule 6.6.6(8).

We consider our disclosures to be consistent

with the recommendations of the Task Force

on Climate-related Financial Disclosures

(TCFD), with the exception of (a) full Scope

3 greenhouse gas emissions and (b) the

emissions from Funky Pigeon (acquired

August 2025). Work to integrate additional

emissions sources and the re-baselining of

emissions for Funky Pigeon is underway and

expanded Scope 3 disclosures are expected

to be included in the next Annual Report

andAccounts.

The greenhouse gas emissions reported in

this disclosure, are prepared in alignment with

the requirements of the Streamlined Energy

and Carbon Reporting (SECR) framework.

Our current assessment indicates that climate

change does not pose a material threat to

the Group’s commercial viability in the short

term; however, it remains an important

strategic and operational consideration.

These disclosures outline how climate related

considerations are embedded withinour

governance and risk management processes,

and summarises the actions we are taking

to mitigate risk and support our transition

to a low carbon, climate-resilient business.

Together with the wider ESG section of this

report, these disclosures provide transparency

on the resilience of the Group’s strategy

and our approach to long-term sustainable

valuecreation.

Climate strategy

We recognise climate-related risk as both

strategic and operational in nature, with

climate considerations fully integrated into

our strategic planning processes, investment

decisions, cost management activities and

operational planning processes.

Identified climate-related

risks and opportunities

In assessing the potential impacts and

opportunities associated with climate change,

including those that influence investment

choices, cost efficiency and operational

planning, we apply the following time

horizons, aligned with our business strategy,

future planning, and (with consideration of

climate transition scenarios) when they are

expected to have the greatest impact:

Climate-related

financial disclosures

• Short term (up to 5 years, FY26–FY31):

Focuses on a short-term period relevant

tobusiness planning, investment decisions

and the long-term viability of the business

(see page 127.)

• Medium term (5–15 years; FY31–FY41):

Aforeseeable period to monitor and

address emerging risks, including the

timeframe for our science-based 2033

carbon reduction targets.

• Long term (over 15 years, to 2050 and

beyond): captures more uncertain, longer-

range risks. It aligns with our 2050 Net

Zero goal and ensures we consider how

the business might be affected by climate

change in the far future.

We identify climate-related risks and

opportunities across two primary categories:

physical and transition risks. These, along with

relevant ESG-related risks, are recorded in

our Sustainability Risk Register and assessed

based on commercial impact – the disruption

to operations and impact on finances

orreputation.

• Low: limited commercial impact.

• Medium: moderate commercial impact.

• High: significant commercial impact.

Card Factory plc Annual Report and Accounts 2026

Scenario Definition & key assumptions Primary business impacts

1. Gradual

transition

(<2°C)

Aggressive climate action: A scenario where strict global policies and carbon

pricing are introduced to limit warming, aligned with the Paris Agreement.

Key assumptions:

• Rapid decarbonisation of the global economy.

• High carbon taxes introduced in the UK and manufacturing regions

(China/Far East).

• Shift in consumer preference towards fully circular/sustainable products.

Transition risks focus:

• Legal & policy: Increased compliance costs for carbon reporting

and potential levies on imported goods (carbon border taxes).

• Market: Risk of reduced demand for non-sustainable products

(e.g.helium balloons, plastic packaging).

• Reputation: Investor and customer scrutiny on Net Zero progress

and supply chain transparency.

2. Business as

usual (>3–4°C)

Climate inaction: A scenario where no further climate policies are enacted,

leading to high global warming.

Key assumptions:

• Emissions continue to rise at current rates.

• Significant increase in frequency and severity of extreme weather events.

• No additional transition policies implemented.

Physical risks focus:

• Supply chain: Disruption to the availability of raw materials (paper/

pulp) due to droughts or forest fires in sourcing regions; disruption

to product supply due to impact of extreme weather (flooding/

heatwaves) on manufacturing facilities.

• Operations: Distribution centre or store closures due to extreme

weather (flooding/heatwaves).

• Trading: Reduced high street footfall during extreme temperature

events (e.g. heatwaves).

Scenario assessment

Having considered the climate-related risks, we conducted scenario analysis against two distinct scenarios, outlined below, to assess the resilience of our strategy. Our analysis indicates that the

Group’s strategy remains resilient to these risks under both scenarios.

In this year’s disclosure, we took the decision to reduce the assessment of the risks from three to two scenarios reflecting the UK’s commitment to a gradual transition, aligned with the Paris

Agreement. This position will be reviewed annually, based on the latest climate science findings.

Strategic Report Governance Financial Statements

Company Information

Climate-related risks

We define a climate-related risk as any risk that could materially affect, or pose a threat to, the resilience of our operational cost base or broader business model, taking into account the

assessed likelihood of occurrence. These risks are recorded in our Sustainability Risk Register, alongside the associated mitigating actions, and are summarised in the table below. They are also

reflected within our two principal risks: ’ESG & climate change‘ and ’Business continuity’.

The identified risks represent the potential negative financial and operational impacts that can result from physical climate-related risks and the transition to a low-carbon economy.

CLIMATE CHANGE AND TCFD CONTINUED

Risk

Risk description

Impact

Impact time

horizon

Impact

level

Mitigation actions

and opportunity

Impact of future scenario

Transition risks

Policy and legal

Increased climate-related

policies, regulations, taxation

and legal requirements may

lead to brand risk and higher

operational costs.

cardfactory is mandated to comply with

several regulatory regimes (e.g. SECR –

Streamlined Energy & Carbon Report,

ESOS– Energy Saving Opportunities

Scheme and EPR – Extended Producer

Responsibility). While current financial

impacts are minimal, relative to total

operating costs, the regulatory burden

willcontinue toincrease.

Failure to comply with reporting standards

could damage investor and customer

confidence and increase operational costs.

Emerging eco-design regulations may

require the substitution of existing raw

materials with lower-emission alternatives,

increasing product and production costs.

Carbon pricing and taxation will further

increase cost pressures.

Short –

medium term

Low cardfactory’s sustainability

strategy and actions to

manage transition risks

provide an opportunity to

strengthen brand reputation.

Governance and risk

processes are in place,

including the Sustainability

Risk Register, which

supportsthe identification,

assessment and review of

emerging risks.

The sustainability

team, supported by the

Sustainability Steering Group,

conducts horizon scanning to

monitor new and upcoming

regulatory developments.

Warming limited to <2

Increasing time/cost

burden but likely minimal

cost impact over time.

Card Factory plc Annual Report and Accounts 2026

Risk

Risk description

Impact

Impact time

horizon

Impact

level

Mitigation actions

and opportunity

Impact of future scenario

Transition risks continued

Market and

reputational

Changes in consumer

behaviour driven by actual

or perceived environmental

impacts of products.

Consumers are increasingly assessing

and expecting the sustainability of

products and their supply chains.

Unsustainable sourcing of raw materials

(e.g. paper, cardboard) can negatively

impact the environment and damage

brand reputation. This may lead

consumers to switch to companies and

products that better align with their

environmentalpreferences.

Short –

medium term

Low We remain committed to

reviewing and reducing

the environmental impacts

of our products, including

the active management of

waste and environmentally

sensitive product lines.

To strengthen the

identification and

management of supply

chainrisks, the Group

appointed a Head of

Technical & Sustainable

Sourcing in FY26.

Example mitigation areas

include Timber sourcing:

Ensuring responsible

sourcing standards (e.g. FSC);

Helium management: Waste

reduction strategy will be

implemented in FY27.

Warming limited to <2

Increasing time/cost

burden but likely minimal

cost impact over time.

Technology

Transitioning to a low-carbon

business model increases

costs from third-party

logistics partners as they

invest in electric vehicle

(EV) fleets. There is also a

risk of aging machinery at

Printcraft becoming energy-

inefficient, increasing our

direct carbon footprint and

manufacturingcosts.

Indirect costs will rise as partners

undertake significant capital investment

to replace ageing diesel vehicles. Direct

investment is required for older printing

equipment. There is a risk of supply chain

disruption if partners select technologies

(e.g. specific EV truck models) that prove

unsuitable for our distribution needs.

Medium – long

term

Medium We are collaborating with

logistics partners to leverage

their investments in EV

fleets for our distribution.

Internally, we are investing

in state-of-the-art energy-

efficient presses at Printcraft

and have transitioned our

small corporate fleet to

electric/hybrid vehicles. We

utilise telematics to optimise

load efficiency and reduce

total road miles.

Warming limited to <2

Risk of price shocks due

to geo-politics; mitigation

actions in place to

manage that risk and

spread the cost.

Strategic Report Governance Financial Statements

Company Information

Risk

Risk description

Impact

Impact time

horizon

Impact

level

Mitigation actions

and opportunity

Impact of future scenario

Transition risks continued

Energy market

volatility

Grid transition and price

shocks: Volatility in energy

prices affecting the cost of

operating our UK & Republic

of Ireland estate, for example

our distribution centre,

andc.1,117 stores.

Sharp increases in electricity prices

– consistent with recent market

experience – impact store profitability

and manufacturing costs. Whilst we

have managed price rises within our

operational costs, this has future potential

to increase our cost base. Potential supply

interruptions could also affect our ability

to conduct business, our store openings,

and printing and production schedules

forPrintcraft.

Medium –

longterm

Medium –

high

We have a comprehensive

energy management

programme aimed at

reducing exposure to price

volatility and improving

operational resilience.

Keymeasures include:

Smart metering: Installation

of smart meters across the

estate to monitor energy

use, supported by an AI

energy management system

to detect and prevent

energywaste.

Energy procurement

strategy: Working closely

with energy suppliers

to manage risk around

energyprocurement.

On-site renewables:

Exploring installation of

on-site solar generation at

our main manufacturing and

distribution hubs.

Commodity hedging:

Utilisinghedging

strategies for energy

and foreign exchange,

while managing raw

material volatility through

procurementagreements.

Warming limited to <2

Increasing time/cost

burden but likely minimal

cost impact over time.

CLIMATE CHANGE AND TCFD CONTINUED

Card Factory plc Annual Report and Accounts 2026

Risk

Risk description

Impact

Impact time

horizon

Impact

level

Mitigation actions

and opportunity

Impact of future scenario

Physical risks

Acute and

chronic changes

in temperature

(1)

Increased frequency and

severity of extreme weather,

resulting in disruption

to our supply chain

logistics, distribution, and

manufacturing sites.

Our global supply chain presents a risk

in the event of more frequent extreme

weather events, that could impact product

quality and availability, and result in price

volatility. This also includes potential loss

of trading days and disruption to the

logistics network affecting the ability to

deliver to shops.

Short –

longterm

Low Current impact is assessed

as low, as we deploy

logistics and route planning

technology to reduce the

impact of extreme weather.

We have robust Business

Continuity Plans in place and

have designed our supply

chain to mitigate the risk of

localised disruptions causing

single points of failure.

>4°C results in increasing

disruption over time.

Acute and

chronic changes

in temperature

(2)

Increased frequency and

severity of extreme weather

events, resulting in damage

to infrastructure and our

estate, as well as reduced

customer footfall.

Negative impact on revenue. Our two main

UK sites, Printcraft, near Bradford and the

distribution centre at Wakefield, have been

assessed as low flood risk to 2060. There

have been some flood events at a small

number of stores, the impact of which in

relation to the estate is considered low.

Short –

longterm

Low Our emergency recovery

plans mean we can recover

any affected systems such as

IT, which are incorporated in

our Business Continuity Risk

Management.

We conduct flood risk

assessments for existing

critical sites and work closely

with insurers to identify risk,

for stores we monitor flood

events, with emergency

response to reinstate the

store. The reason for the

flood is assessed and action

taken to avoid recurrence.

We have diversified our

business model with online

sales, which will help mitigate

reduced store traffic during

adverse weather conditions.

>4°C results in increasing

damage over time.

Strategic Report Governance Financial Statements

Company Information

Risk

Risk description

Impact

Impact time

horizon

Impact

level

Mitigation actions

and opportunity

Impact of future scenario

Physical risks continued

Acute and

chronic changes

in temperature

(3)

High temperatures affecting

health and wellbeing of staff.

High temperatures impacting

raw materials such as timber.

Rising temperatures increase the risk of

summer days exceeding safe working

temperatures, necessitating policy changes

or additional cooling. Global temperature

changes may impact crop yields for

ingredients and timber availability, leading to

price volatility and increased cooling costs

in our supply chain.

Medium –

longterm

Low We monitor our estate for

high temperature impacts

and review working practices.

We ensure existing cooling

systems are maintained

andtemperature

set-points managed.

In new and retrofit stores,

we implement cooling

technologies where required

and have an annual budget

for installing new air

conditioning at risk sites.

>4°C results in increasing

temperature impacts over

time.

Changing

customer

behaviour

Extreme weather alters

shopper habits: Impact

of climate change (hotter

weather, more storms/

rainfall) on shopper

behaviour, reducing

footfall to stores and

impactingrevenues.

Fewer store visits and lower in-store sales

during extreme weather events. This

results in disruption to shop operations

(loss of trading days) and significantly

increased cooling and refrigeration costs

due to higher average temperatures.

Short –

longterm

Medium We review and monitor

customer expectations and

adapt our sales channels.

We have diversified our

business model with online

sales to compensate for

fluctuations instore traffic

and have also installed air

conditioning systems to help

maintain comfortable in

store conditions year round.

>4°C results in

increasingly influencing

behaviours over time.

CLIMATE CHANGE AND TCFD CONTINUED

Card Factory plc Annual Report and Accounts 2026

Climate-related opportunities

The opportunities identified support delivery of the Group’s growth strategy: by strengthening product innovation, improving cost efficiency and enabling enhanced digital and

marketcapabilities.

The opportunities outlined represent the positive outcomes that can result from mitigation and adaptation activities. These opportunities stem from the shift towards a low-carbon economy

such as policy and regulatory changes, market shifts and reputational impacts.

Opportunity category Identified opportunities

Product & services

Increased revenue through:

• Development and expansion of new, low emissions products e.g. paper and cardboard; move to the use of recycled content in products.

• Demonstrating the sustainability credentials of our products and the Group e.g. ESG and sustainability product disclosure standards.

Markets

Enhanced market positioning and improved access to financing, driven by stronger sustainability performance:

• Increased access to markets, for example the recent acquisition of Funky Pigeon to enhance online offering.

• Access to preferential borrowing.

• Improved levels of design to meet sustainable design regulations e.g. digital product passports.

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.

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

Resilience

Improved working practice, procedure and environment:

• Adoption of mitigation and adaptative measures that improve and strengthen our operations.

• Reduction of the environmental risk of our supply chain.

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Impact of climate-related risks

andopportunities

Under a transition scenario limited to less than 2°C, the

strategic and financial impacts on our UK & Republic of Ireland

operations come largely from evolving regulations, energy

market volatility and changing consumer behaviour. These

climate-related risks and opportunities directly affect our cost

base, capital investment decisions, procurement activity and

operational planning, as well as informing the products we

selland wider commercial decision making.

In the medium term, transition risks will continue to influence

investment choices, supply chain arrangements and

operational cost forecasts. Climate risk and opportunities

could also affect procurement decisions, product development

and overall operating cost trends as regulatory and market

dynamics evolve.

Under a higher warming 4°C scenario, physical risks become

more pronounced, with greater potential for disruption to

logistics and supply chains, and for extreme weather to affect

store footfall and local infrastructure.

The risk of climate change on our international subsidiaries

has been qualitatively assessed as low, but further integration

into our risk management framework will supportdeeper

assessment of medium and long-term risksandopportunities.

CLIMATE CHANGE AND TCFD CONTINUED

Resilience of cardfactory’s strategy

Our scenario analysis indicates that cardfactory’s strategy

remains resilient for both gradual transition and high

warming climate futures. The mitigation mechanisms are

already in place; our governance processes, risk management

frameworkand operational planning provide the flexibility

needed to respond to evolving climate conditions without

fundamentally altering the viability of our business.

In the short term, under a transition limited to less than

2°C, existing strategic and financial planning help ensure

the impacts identified remain within tolerable levels and

do not materially alter the Group’s risk profile. Ongoing

risk monitoring, together with our logistics planning,

implementation of ‘Delivering a Sustainable Future’,

and thedevelopment of our Net Zero transition plan,

will furtheract tostrengthen our ability to anticipate,

manageandreduce these risks over time.

In the medium term, our financial planning processes,

supplychain strategy and ongoing investment in operational

efficiency provide further resilience by ensuring we can

continue to adapt to evolving transition risks as regulatory

andmarket conditions change.

Under a higher warming 4°C scenario, although physical

risksincrease in likelihood and intensity, our diversified

estate,business continuity arrangements, enhanced online

retail channel, and strengthened logistics and stock planning

mitigate potential disruption to stores, logistics and customer

access to our services. Forward-planning measures, such

as estate monitoring, flood risk reviews and continued

investment in operational efficiency, will provide additional

resilience and support long-term adaptability. The ongoing

integration of acquired businesses into our risk framework

further strengthens our ability to manage and adapt to

climate-related risks consistently across the Group.

Overall, the analysis shows that the Group’s long-term

strategyis robust, with the capacity to absorb and adapt

totheclimate-related risks currently identified.

Climate risk management

cardfactory’s approach to risk management is outlined on

pages 72 to 77. Climate-related risks are assessed by utilising

the Group’s risk management framework, ensuring they

are evaluated with the same rigour and consistency as all

otherrisks.

Process for identifying and assessing

climate-related risks

The Group’s established risk management framework is

used to identify and assess climate related risks, covering

both transition risks (including regulatory, technological and

reputational change) and physical risks (such as extreme

weather events and longer-term climatic shifts). Climate-

related risks are evaluated using the same structure and

criteria applied to other principal risks, ensuring consistency

inassessment.

The relative significance of climate-related risks is reflected

within the Group’s principal risks and uncertainties. Transition

and physical climate risks are captured within the strategic

principal risk ‘ESG compliance and climate change’, while

physical risks with potential operational impacts are also

considered within the operational principal risk ‘Business

continuity’. This approach recognises the potential for

climate-related risks to disrupt operations and affect

the achievement of business objectives over different

timehorizons.

In line with the Group’s risk framework, ‘ESG compliance and

climate change’ is not currently classified as a critical risk and

is therefore, subject to periodic review as part of the Group’s

established risk governance processes.

In FY26, the Group completed a double materiality

assessment, evaluating both the financial materiality of ESG

and climate-related risks. The outputs of this assessment are

presented on page 37 and will be reviewed every three years.

Card Factory plc Annual Report and Accounts 2026

Processes for managing climate-related risks

The Group’s risk management framework provides a

structured basis for mitigating, escalating and managing

principal risks, including climate-related risks. Each principal

risk defines ownership, controls, assurance, monitoring and

reporting requirements (for more information, please see

Risk Management on pages72 to 77). For climate-related risks,

these tools ensure clear accountability and alignment with the

governance structures outlined in this disclosure.

The Sustainability Leader, supported by the Sustainability

Steering Group (SSG), monitors mitigation actions, risk

indicators and emerging issues to ensure climate-related

considerations are integrated into operational and strategic

decision making. Risks are prioritised based on their

likelihood, potential impact and relevance to the Group’s

operations and strategy.

Responsibility for the ’ESG compliance and climate change‘

principal risk, including the monitoring of mitigation actions,

sits with the Chief Financial Officer (CFO). The Sustainability

Leader coordinates the delivery of the Group’s ’Delivering

a Sustainable Future‘ strategy, which guides our mitigation

actions, supported by the Sustainability Manager and

SSG, which brings together senior leaders and subject

matterexperts.

Day-to-day management of climate-related risks is embedded

across relevant business areas, including store operations,

logistics, supply chain, commercial, facilities management and

data functions. Senior management in these areas implement

controls, monitor performance and escalate risks in line with

the Group risk management framework.

To strengthen supply chain risk management, the Group

appointed a Head of Technical & Sustainable Sourcing in FY26,

enhancing cardfactory’s capability to identify and manage

climate-related risks associated with materials, sourcing

practices, product specifications and supplier resilience.

Integrating climate-related risks into overall

risk management

Climate-related risks are considered within the same cycle,

criteria and governance processes as all other Group risks.

The ‘ESG compliance and climate change’ risk is reviewed

annually with the risk owner. Any changes are presented to

the senior management team for review and then submitted

to the Audit & Risk Committee.

The CFO maintains oversight of the principal risk, ensuring

it is reflected appropriately within the Group’s risk cycle and

financial reporting.

The Audit & Risk Committee review the Group’s principal risks

quarterly. This ensures climate considerations are embedded

in overall risk governance and informs strategic planning,

capital allocation and business resilience.

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CLIMATE CHANGE AND TCFD CONTINUED

Climate-related metrics and targets

Metrics used to assess climate-related risks and opportunities

The Group has determined that carbon emissions are the most appropriate metric to evaluate its impact on, and exposure to, climate-related risks and opportunities, and to inform strategic

and operational decision making. Monitoring emissions also supports the Group’s wider approach to improving operational efficiency and managing transition-related climate risks as part of its

long-term sustainability strategy.

The below table summarises the Group’s energy consumption, carbon emissions and emissions intensity, and constitutes the Group’s Streamlined Energy and Carbon Reporting (SECR)

disclosure for the reporting period.

Group GHG emissions and energy consumption by Scope

Activity category

FY26

FY25

Baseline year:

FY22

Percentage change

FY22–FY26

Percentage change

FY25–FY26

Scope 1: Direct emissions from the combustion of fuel in operation of owned and controlled facilities and equipment

Stationary combustion 77.3 101.7 102.8 -25% -24%

Fugitive emissions 94.7 144.7 157.9 -40% -35%

Mobile combustion 724.5 893.4 414.6 75% -19%

Scope 1 Total Group (tCO

e) 896.5 1,139.8 675.2 33% -21%

Scope 1 Total UK (tCO

e) 537.2 716.1 671.8 -20% -25%

Scope 1 Total Rest of World (RoW) (tCO

e) 359.3 423.7 3.4 >100% -15%

Scope 2: Indirect emissions from the production of purchased energy

Scope 2 Location-Based Total (tCO

e) 4,501.5 5,809.2 4,283.0 5% -23%

Scope 2 Location-Based Total UK (tCO

e) 3,764.5 4,738.0 4,238.0 -11% -21%

Scope 2 Location-Based Total RoW (tCO

e) 737.0 1,071.2 45.0 >100% -31%

Scope 3: Indirect emissions from the value chain

Scope 3: Fuel and energy-related activities (tCO

e) 1,880.5 1,907.1 1,713.0 10% -1%

Total Gross Emissions – Location-Based (tCO

e) 7,278.5 8,856.0 6,671.3 9% -18%

Revenue (£m) 582.7 542.5 364.4 60% 7%

Intensity Ratio tCO

e per £m 12.5 16.3 18.3 -32% -23%

Activity category

FY26

FY25

Baseline year:

FY22

Percentage change

FY22–FY26

Percentage change

FY25–FY26

Total energy use UK (kWh) 23,926,787 25,240,574 22,269,614 7% -5%

Total energy use RoW (kWh) 2,413,021 3,656,657 225,256 >100% -34%

Group energy use (kWh) 26,339,808 28,897,231 22,494,870 17% -9%

Revenue (£m) 582.7 542.5 364.4 60% 7%

Intensity Ratio kWh per £m 45,203 53,267 61,731 -27% -15%

Card Factory plc Annual Report and Accounts 2026

Climate-related targets

The Group has set a Net Zero target for 2050, supported

bynear-term science-aligned carbon reduction targets

measured against a FY22 baseline:

• Reduce absolute Scope 1 and 2 greenhouse gas (GHG)

emissions by 54.6% by 2033.

• Reduce Scope 3 emissions by 61.1% by 2033 on an

economic intensity basis.

Energy and carbon performance

Between FY25 and FY26, the Group delivered reductions

across all reported emissions scopes, with total operational

emissions reducing by 18%. These reductions reflect the

impact of operational efficiency measures, includingthe

transition away from fossil fuel company vehiclesand the

implementation of wider energy-efficiencyinitiatives.

Similarly, when FY26 performance is compared with the

FY22 baseline year for UK operations, emissions have

reduced by 20%. However, at Group level, cardfactory’s

total carbon emissions are 33% higher than the baseline

level. This increasereflects the growth of the Group through

acquisitionsand the subsequent incorporation of emissions

from acquired businesses into the Group’s GHG inventory.

As a result, we no longer believe that the FY22 baseline

provides a meaningful direct comparison with current

emissions performance. The scale of change has

exceededthethresholds that trigger a re-baselining

ofemissions, requiring the establishment of a new

baselinethatmore accurately reflects the Group’s

current operationalboundaries.

The acquisition of Funky Pigeon and the requirement to

incorporate emissions from this business into the GHG

inventory will further impact reported Group emissions,

aswillongoing work to improve understanding and

coverageofthe Group’s full Scope 3 emissions.

Considering these developments, it is our intention to reset

theemissions baseline to better reflect current operations

andto assess the implications for the Group’s emissions

reduction targets and pathway.

Methodology

The carbon emission metrics have been calculated following

the guidance in the UK Government’s Environmental Reporting

Guidelines (2019), and the methodology set out in The GHG

Protocol Corporate Accounting and Reporting Standard

(revised edition). The applied energy and carbon emission

factors are those published in the UK Government’s GHG

Conversion Factors for Company Reporting 2025, alongside

factors from the International Energy Agency forsubsidiaries

outside the UK.

An operational control approach has been used to define

the organisational boundary for emissions reporting. The

reported emissions cover cardfactory’s operations for the

period from1February 2025 to 31 January 2026, aligned

withthe Group’s fiscal year.

The Group delivered reductions across

all reported emissions scopes, with total

operational emissions reducing by 18%.”

The GHG emissions and energy consumption included in

this Disclosure include all materialemissions, inline with

the requirements of SECR. It incorporates cardfactory’s UK

and international operations (including acquisitions) with the

exception of the recent acquisition of Funky Pigeon, which

willbe incorporated into GHG reporting once full operational

data becomes available.

Strategic Report Governance Financial Statements

Company Information

OUR STAKEHOLDERS/S172 STATEMENT

This section summarises how the Board engages with the key

stakeholder groups: customers, colleagues, shareholders,

suppliers and communities; the key issues identified from

this engagement and the actions taken in response to that

engagement. The Board is provided with updates from all key

stakeholder engagement at Board meetings, with cascades

of relevant information via members of the senior leadership

team. The Board recognises a wider range of stakeholders

who support the business, including landlords, wholesale

customers, debt funders, tax authorities, regulators, insurers,

advisers, and takes account of the interests and expectations

of these wider stakeholder groups in its decision making.

Key aspects of engagement with colleagues, our communities

and environment are also reflected in the ESG section of

this Annual Report (see pages 36 to 43), with consideration

of matters affecting our suppliers also reflected in our risk

reporting (see pages 72 to 77).

Our

stakeholders

Our customers

How we engaged

cardfactory’s insight and customer experience

team prioritise the understanding of our

customers’ needs and preferences through

a robust programme shared monthly to the

Board and senior leadership, including:

• Market and category context: Numerator

Worldpanel tracking of category and

market performance, annual market

and category understanding via Dynata

and GlobalData across cards, gifting and

celebration essentials and broad market

and macro analysis fromGlobalData.

• Customer voice: more than 20,000

monthly pieces of customer feedback via

tellcardfactory, ad-hoc ‘OnePulse’ polling to

gain fast customer and consumer feedback

and ad-hoc segmentation analysis,

bespoke surveys and analytics to

helpinform.

• Trend forecasting: WGSN trend

forecasting.

• Brand insight: Savanta BrandVue

tracking of brand health, consideration

andsentiment.

• Complaints and compliments: sourced

from the customer service team.

• Transactional data: sales, basket analysis.

• Frontline insight: colleague feedback.

As custodians of the cardfactory

business, the Board continues to

engage with a range of stakeholders

and to consider their preferences in

its decision making, to ensure the

business is sustainable and grows

over the long term.

Section 172(1) Statement on

stakeholder engagement

The Board recognises the Group’s long-term future

is reliant on a range of stakeholders who enable the

business to flourish and grow, including those who

fund the Group, the teams and businesses that design,

manufacture, distribute and sell its products, the

customers and the communities it works with.

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 to have full

regard to their duties to promote the success of the

Company pursuant to section 172(1)(a) to (f). This includes

engagement with key stakeholder groups (customers,

colleagues, shareholders, suppliers and communities),

understanding their priorities and balancing these (often

conflicting) priorities in decision making for the long-

term benefit of all stakeholder groups, whilst protecting

the cardfactory brand and the business’ reputation and

minimising the businesses impact on the environment.

Card Factory plc Annual Report and Accounts 2026

Discussions, topics and actions

• Declining footfall, frequency and basket

size due to macroeconomic pressures and

rising postage costs.

• Erosion of value perception and

consideration in some customer

segments, prompting targeted

price- pointinvestment.

• Opportunities to grow gifting and

celebration essentials, with lower

awareness of certain gift offerings.

• Stronger understanding of lapsed and

lapsing customers, helping prioritise

retention strategies.

These insights guided Board discussions

on pricing, proposition focus and

customer experience and actions

required in an increasingly challenging

consumerenvironment.

Outcomes

• Reinforced value leadership, with

price point experimentation and clearer

communication strengthening value for

money perception (+8 percentage points

(ppts) in value perception during trial

; a

stabilising of year-on-year (YoY) customer

value perception thereafter).

• More targeted pricing, balancing

customer expectations with the need to

protect margin, informed by category and

mission-based sensitivity analysis.

• Range and space optimisation trials,

improving customer satisfaction (+1.5ppts)

among customers in trial stores.

• Online journey improvements

including work undertaken on the mobile

navigation experience, SEO strategy,

upsell experience, and a simplified user

experience at large – resulting in -5%

abandonment rate upper funnel, +4.6%

average order value and 21% uplift in

organic traffic.

• Investment to strengthen customer

listening capability, introducing enhanced

feedback channels and improved data

capture to ensure broader, richer and

more timely insight for management and

the Board.

• While we have seen a decline in

Net Promoter Score YoY (-3.1 points),

this is reflective of both brand-level

sentiment and a broader softening in

consideration of card. However, in the

main, we see a stable state in most

customer outcomes (value for money,

customer satisfaction, trust) and improved

customer outcomes in quality (+6ppts).

1. Indicative data based on N=56 cardfactory customers

in May 2025.

Strategic Report Governance Financial Statements

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OUR STAKEHOLDERS/S172 STATEMENT CONTINUED

Our shareholders

How we engaged

The Board support engagement from

all shareholders, with more regular

engagement with the largest shareholders.

Engagementincludes:

• Ongoing two-way shareholder engagement

by the Board, including Q&A opportunities

for all shareholders to engage with the

Board at the AGM and with the CEO and

CFO following the preliminary results and

interim results presentations.

• Regular meetings and calls between the

CEO and CFO with material shareholders

(and prospective shareholders), including

investor roadshow meetings. Targeted

engagement by the Chair and Non-

Executive Directors, including ad-hoc

meetings with shareholders.

• Shareholder consultation with the Chair

with invitations issued to the largest

13shareholders (58% of shares) following

the 2025 AGM (see details on page 80).

• Site visits, including meetings (including

Q&A sessions) with the senior

management team.

Discussions, topics and action

Specific issues arising from the various

engagement channels included:

• Concerns regarding shareholder dilution

arising from issue of shares to satisfy

employee share awards.

• Focus on understanding greater clarity on

our digital strategy and US growth plans.

• A range of views on areas of strategic

focus and investment between the

three sales channels: stores, digital

andwholesalepartnerships.

• Preferences regarding the development

of the capital allocation policy, including

views ranging from returning all capital

generated as dividends or buyback of

capital and the role of acquisitions to

support realising the strategic growth.

• Board composition and diversity, with

shareholders generally supportive of

the Board’s approach to maintaining

gender diversity at 33%, below the

40%recommendation.

Outcomes

• Share buyback launched in October

2025 to acquire shares into treasury to

satisfy employee share awards (buyback

completed by 19 December 2025 with a

total of 5,795,564 shares acquired).

• Announcement of additional share

buyback using free cash from FY26

(following the period-end).

• Additional clarity on our digital strategy

and US growth strategy was provided in

the FY26 Preliminary Results presentation.

• Following review, the Board substantially

retained the existing structure of the

capital allocation policy, reflecting its

view that returning surplus cash while

maintaining prudent leverage best

supports long-term shareholder value

andresilience.

Card Factory plc Annual Report and Accounts 2026

Communities and environment

How we engaged

• As part of our 2025 materiality

assessment, we engaged with more

than1,300stakeholders, including

colleagues, customers and suppliers,

toidentify the environmental and

community issues they felt were most

important to cardfactory (see page 37).

• We gathered input from colleagues both

directly and through our Sustainability

Steering Group to identify and progress

opportunities to reduce waste and

emissions within our business and

supplychain.

• Our colleagues represent our communities

across the UK & Republic of Ireland,

identifying opportunities where cardfactory

and The cardfactory Foundation can

support our local communities and

theenvironment.

Discussions, topics and actions

• Materiality assessment stakeholder

feedback prioritised environmental

issues including protecting nature and

wildlife, and reducing our greenhouse

gas emissions and waste. While these

are already included in our sustainability

strategy, we have amended our focus

areas to ensure they reflect this feedback.

• Other issues raised by our stakeholders,

including impact of climate change on

colleague wellbeing and responsible use of

artificial intelligence, have been raised with

our senior leadership team for monitoring

across the business.

• We continue our ongoing commitment to

progress our ESG programmes (see pages

36 to 43).

Outcomes

We have updated our sustainability strategy

and supporting plans to ensure they reflect

the issues prioritised by our stakeholders.

Examples include implementing new helium

and shipping waste reduction strategies to

reduce waste, emissions and cost, and new

policies and procedures to increase the

transparency of our product supply chain.

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Our colleagues

How we engaged

Throughout FY26, we engaged with colleagues

through a range of formal and informal

channels, including:

• Colleague forums and engagement

surveys, providing insight into colleague

sentiment, priorities and areas for

improvement, with results and themes

reported to the Board, including through

the colleague listeninggroup.

• Consistent communications, including

monthly business updates, leadership

briefings and revived colleague

connectiondays, creating opportunities

for two-way dialogue across stores,

supplychain, support centre and

international teams.

• Direct engagement by Board members

andsenior leaders, including store,

distribution centre and support

centre visits, supporting visibility and

opendiscussion.

• Community and colleague network

groups, supporting dialogue, education

and awareness across key areas including

wellbeing, inclusion and diversity.

These mechanisms ensure colleague

viewsare visible at Board level and

informdecision making.

Discussions, topics and actions

• Feedback from forums and the materiality

assessment highlighted the importance of

colleague wellbeing.

• Reward and fairness, with emphasis

oncompetitive pay and recognition.

This informed continued commitment to

paying at median market levels alongside

targeted recognition activity.

• Inclusion, diversity and belonging,

including the need for improved diversity

data and representation to better reflect

the communities served by the business.

• Feedback from the engagement

survey highlighted the value to our

colleagues of ‘Giving Something Back’

toourcommunities.

OUR STAKEHOLDERS/S172 STATEMENT CONTINUED

Outcomes

As a result of our colleague-centred approach

and Board consideration during FY26,

we delivered meaningful operational and

culturalbenefits.

• Improved colleague retention, with overall

turnover (the number of colleagues

leaving the business in a 12-month rolling

period) reducing from 38.6% to 29.1%,

surpassing our target (35%) and supporting

productivity, capability and service quality.

• Launched our wellbeing brochure to

simplify access to support via our internal

benefits portal, myCardfactory.

75%

participation in colleague

engagement survey

900

nominations received through

‘Colleague Moment Awards’

• Transitioned our employee assistance

programme to the Retail Trust (delivering

strengthened sector-specific support),

continued development of mental

healthfirst aiders, and introduced

wellbeing leadership for our senior

leadership team toembed local

wellbeingactions.

• Supported the nationwide ’Respect In

Retail’campaign.

• Continued recognising colleagues

through ‘Colleague Moment Awards’,

with over 900 nominations received.

• Colleague fundraising was doubled

through the cardfactory foundation

‘Matched Giving Fund’ to £59,000.

• Through the ‘Local Community Fund’,

91 x £5,000 grants were awarded to

charities nominated and chosen by

our colleagues.

Card Factory plc Annual Report and Accounts 2026

Values-led leadership,

inclusiveperformance

Our relationships with stakeholders are

underpinned by a clear set of values (see

below) that shape how we lead, how we make

decisions and how we drive performance. At

cardfactory, our purpose – to make sharing

in, and celebrating, life’s moments special and

accessible for everyone – unites colleagues

across our business and markets, providing

a consistent lens through which we consider

impact, accountability and long-term value.

Diversity, Equity and Inclusion (DE&I) is

integral to delivering this purpose and to

building a culture where everyone feels

included, inspired and able to perform at

their best. As we continue our strategic pivot

towards celebrations and expand into more

global markets, our success increasingly

depends on our collective understanding

of, and accountability for, inclusive decision

making. DE&I considerations are not viewed

as standalone activity, but as a core enabler

of effective leadership, better decisions and

sustainable performance.

See our workforce diversity data on

pages 122–123.

Our values guide how we work together

every day, shaping an inclusive culture

where colleagues feel supported, trusted and

empowered. This culture is foundational to

our internal high-performance development

programme, which focuses on building

capability, consistency and confidence at every

level of the organisation. By aligning our values

with clear expectations of performance and

leadership behaviours, we enable colleagues

to take ownership of outcomes and deliver

forcustomers and stakeholders alike.

Our engagement survey in March 2025

demonstrated strong levels of colleague

commitment, with a 75% completion rate and

retention of our two-star company rating.

While this represented a slight decrease

compared to the prior year, results remained

robust – particularly across management

effectiveness and team connection – while

clearly highlighting opportunities to further

strengthen our colleague proposition. These

insights are being actively used within our

high-performance development programme

to sharpen accountability, capability and

engagement at all levels.

We stay curious, agile

and strive for better

We lead

the way

We celebrate

our differences

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 nurture

our communities

Our

purpose

We are united

by this purpose

care

Strategic Report Governance Financial Statements

Company Information

OUR STAKEHOLDERS/S172 STATEMENT CONTINUED

CASE STUDY

Accelerate: Building a capable,

engaged and scalable organisation

To enable disciplined execution and

scalable growth in a challenging

retail environment, cardfactory must

develop leaders who can confidently

handle increasing complexity and drive

performance through their people. Our

Accelerate High Potential Programme

was launched to build this capability,

strengthening our succession pipeline

and supporting colleagues identified as

having the greatest potential to grow into

future leadership roles. The programme

focuses on confidence, enterprise mindset,

storytelling, critical thinking and the

leadership behaviours needed to deliver

disciplined growth.

Accelerate blends reflective practice,

action learning, coaching fundamentals,

storytelling and cross-functional

collaboration to build self-awareness,

strategic thinking and impactful

communication. Participants consistently

describe the experience as stretching,

energising and transformative – helping

them become more confident, reflective

and ready for increased responsibility.

One colleague was described as “always

learning, always growing – already onto the

next goal before the rest of us catch up,”

reflecting the heightened learning agility

weaim to cultivate.

The programme is also strengthening

behaviours essential for scalable growth.

Participants were recognised as active

listeners, knowledge sharers, stand-out

coaches and engaging storytellers,

demonstrating increased capability in

collaboration, feedback, influencing and

coaching – all foundational to building

high-performing teams. Colleagues showed

greater openness, curiosity and constructive

challenge, with peers highlighting how their

proactive sharing of techniques, insights

and alternatives directly strengthened

teamperformance.

Accelerate is already delivering impact:

colleagues are applying learning directly

in their roles, building stronger internal

networks, challenging the norm and

increasing their readiness for future

leadership opportunities. In doing so, the

programme is helping us build a capable,

engaged and scalable organisation equipped

to deliver disciplined growth in FY26

andbeyond.

50% of the cohort have had a promotion

or an increase in responsibility while on

thecourse.

Card Factory plc Annual Report and Accounts 2026

Our suppliers

How we engaged

Strong, long-term supplier relationships

support value leadership, quality and

product availability.

Oversight is maintained through regular

reporting to senior leadership and the Board.

During FY26, engagement with suppliers took

place through:

• Regular in-person supplier meetings and

negotiations, supporting collaboration

on pricing, quality, availability

andsustainability.

• Ongoing supplier visits and quality reviews,

assessing capability, compliance and

alignment with cardfactory standards,

including ethical sourcing and supply chain

policies, which include modern slavery and

‘no audit, no order’ requirements.

• Cross-functional engagement across

buying, quality assurance, sustainability,

supply chain and technology.

• Data-led collaboration, including the rollout

of a product information management

(PIM) programme to improve product

dataaccuracy and transparency.

Discussions, topics and actions

• Maintaining value leadership and margin

resilience amid inflationary pressures.

• Quality and delivery assurance, including

adherence to critical path timelines, to

ensure the right product is delivered at

theright quality and on time.

• Long-term supplier partnerships to support

range expansion, faster availability of new

products, and greater control over cost

and quality.

• Sustainability and regulatory compliance

including supplier readiness for Extended

Producer Responsibility (EPR), EU

Deforestation Regulation (EUDR) and

continued FSC commitments.

• Improving data accuracy and scalability

with discussion on the role of PIM in

supporting efficiency, compliance and

growth across wholesale partnerships.

Outcomes

• Continued structured monitoring of ethical

audit compliance, supplier onboarding

standards and on-time shipment

performance, with plans to broaden KPI

coverage through enhanced quarterly

supplier reviews.

• Strengthened collaboration with key

suppliers to support cost control and

margin resilience, while maintaining

qualityand availability.

• Advanced supplier readiness for EPR, EUDR

and FSC requirements, with progress on

packaging reduction initiatives detailed in

the Sustainability section.

• Launched the PIM programme to improve

product data accuracy, transparency and

scalability across channels.

Progress on packaging reduction initiatives is

detailed in the ESG section on page40.

Strategic Report Governance Financial Statements

Company Information

Financial highlights

The Group delivered sales growth of 7.4% in FY26, which

reflects contributions from acquired businesses and the

benefit of new stores.

Profitability was impacted by consumer confidence in the UK,

which led to lower footfall and transactions in our UK stores

through the important Christmas season. Cash performance

significantly improved year on year and we maintain our

progressive regular dividend.

• Total Group revenue of £582.7 million increased by

+£40.2million (+7.4%) year on year.

• Completed the acquisition of Funky Pigeon for total cash

consideration of £25.7 million (plus transaction costs) in

August 2025, accelerating delivery of our digital strategy.

• Previous acquisitions of Garven in the US and Garlanna

in Republic of Ireland performed well, contributing to

£25.0million growth in sales from wholesale partnerships.

• Adjusted PBT of £56.0 million declined year on year due

to impact of low consumer confidence and high-street

footfallin the UK on our UK stores. Our store estate

remains highly profitable and cash generative with low

levels of loss-making stores.

• Free cash generation of £40.7 million, representing 98.9%

of Adjusted earnings.

• Strong balance sheet, with net debt of £67.9 million and

adjusted leverage of 1.0x.

• Store portfolio in UK & Republic of Ireland stands at 1,117

stores at 31January 2026, up by +27 from 1,090 stores on

31January2025.

• Final dividend of 3.7 pence, bringing progressive total

dividend to 5.0 pence per share (approximately

£17.5 million), 4.2% increase compared to FY25.

• Surplus cash to be returned to shareholders via £15 million

share buyback.

Strong cash

generation

Matthias Seeger

Chief Financial Officer

In FY26 we grew our

store estate, expanded

celebration sales and

acquired Funky Pigeon.”

CFO’S REVIEW

Store revenue

£514.6m (+1.5%)

Total sales

£582.7m (+7.4%)

Adjusted PBT

£56.0m (-15.2%)

Store portfolio

+27

net new stores

Available financing

£160m

Committed facilities

Card Factory plc Annual Report and Accounts 2026

Financial performance

Introduction

FY26 FY25

Revenue £582.7m £542.5m

EBITDA £116.8m £127. 5m

Adjusted Profit Before Tax £56.0m £66.0m

Profit Before Tax £43.9m £64.1m

Adjusted earnings per share 11.8 pence 14.3 pence

Basic earnings per share 9.0 pence 13.8 pence

Dividend per share 5.0 pence 4.8 pence

Net Debt (excluding leases) £67.9m £58.9m

Adjusted free cash flow £40.7m £28.8m

Cash from operations £122.3m £105.6m

Free cash conversion 98.9% 58.2%

Adjusted Leverage (excluding leases) 1.0x 0.7x

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

trading performance. In FY26, this includes one-off restructuring/transformation costs (£0.4 million), acquisition-related

costs (£3.8 million), intangible asset write-off (£3.2 million) and unrealised losses on derivative contracts (£4.7 million).

Alternative performance measures are defined, calculated and reconciled to relevant IFRS measures in the glossary on

pages 178 to 181.

FY26 was a year of further strategic progress. We continued to expand our store estate,

celebration and party products continued to grow as a proportion of our overall sales,

our recent international wholesale acquisitions performed in line with our expectations

and contributed positively to the bottom line, and we acquired Funky Pigeon, a key step in

accelerating our digital strategy.

However, financial performance in our UK stores was impacted by a challenging consumer

environment, particularly in the important final quarter, which impacted our overall profitability

due to lower footfall and consequently fewer transactions. This meant we were unable to leverage

the benefit of operational gearing over Christmas to offset inflationary impacts to the extent

previously expected, and profitability was further impacted by associatedinventory provisions

and impairment charges related to stores.

cardfactory remains a highly profitable, cash-generative business and we remain committed to

our policy to deliver a sustainable and progressive dividend to shareholders. Since reinstating

dividends in FY24, we have returned 73% of the free cash we have generated, to shareholders,

whilst making strategic acquisitions and maintaining a strong balance sheet.

Strategic Report Governance Financial Statements

Company Information

All this, despite absorbing an estimated £60 million+ of inflation headwinds over the same

three year period.

The environment in which we operate, like many businesses, remains uncertain driven by

external factors and we are not immune to the broader effects of the current conflict in the

Middle East. However, the steps we have taken over the last three years to make our business

more efficient and more resilient put us in a better position to navigate the current period of

macroeconomic and geopolitical instability.

In this context, our value credentials across cards, gifts and celebration essentials have never

been more important and we remain focused on helping our customers celebrate all of

life’smoments.

We remain confident in our strategy to reach more customers in more locations across all of

our channels and growing our share of their overall celebration spend as we continue to target

mid-to-high single-digit percentage Adjusted PBT growth per annum across the medium term.

Sales

Total sales

Change

FY26

£m

FY25

£m

Stores 514.6 506.8 +1.5%

Digital 20.6 13.2 +56.8%

Wholesale partnerships 47.2 22.2 +113.4%

Other 0.3 0.3 -15.5%

Group 582.7 542.5 +7.4%

LFL sales

FY26 FY25

cardfactory stores -0.2% +3.4%

cardfactory online -19.9% +0.1%

cardfactory LFL -0.5% +3.3%

Total Group revenue for FY26 was £582.7 million, an increase of £40.2 million or +7.4%

compared to FY25. Despite the impact of lower footfall and fewer transactions in UK stores,

Group revenue growth remained in line with our medium-term guidance for mid-to-high

single-digit percentage sales growth each year, with sales growth delivered across all channels.

Growth was underpinned by our recent acquisitions, including the contribution of Funky

Pigeon since acquisition in August 2025, plus annualisation of Garven and Garlanna acquired

during the second half of the previous financial year.

Our UK & Republic of Ireland store estate remains the core of our business, and we continue

to grow our store footprint. We opened +27 net new stores in FY26, bringing the total store

portfolio to 1,117 stores (1,069 in the UK and 48 in the Republic of Ireland). We continue to see

opportunities to grow the estate and expect to deliver net new stores at a similar rate for the

foreseeablefuture.

This expansion underpinned total revenue growth in stores of +1.5%, although Like-for-like

store sales declined slightly (-0.2%) as we saw low footfall and, as a result, fewer transactions

in the final quarter of the year due to low consumer confidence in the UK as a result of

challenging macro conditions for consumers and a perceived decline in disposable incomes,

particularly among lower-income demographics.

In this context, we continued to perform broadly in line with the wider non-food market and

increased our share of physical UK card market sales in Q4. However, the lower-than-expected

sales has a disproportionate impact on our profitability, limiting our ability to leverage

operational gearing to offset cost base inflation in the final quarter of the year, resulting in a

net impact of approximately £4 million on our PBT performance in the period.

Total digital sales increased by +56.8% to £20.6 million. This reflects the closure of Getting

Personal from 31 January 2025 and the acquisition of Funky Pigeon from August 2025. LFL

sales from the cardfactory.co.uk platform declined year on year as we continued to focus on

developing a more profitable range and offer.

Our priority for digital now lies in integrating Funky Pigeon and moving both brands on to one

technology platform which supports a lower cost to operate and delivery of synergies from

theacquisition.

We expect sales from digital to grow in FY27 due to the annualisation of the Funky Pigeon

acquisition and are focused on delivering growth in our share of online card plus attached

giftsales from FY28 when we are scheduled to accelerate the omnichannel proposition.

Sales from our wholesale partnerships business increased significantly (+113.4%) compared to

FY25, largely due to annualisation of the Garven and Garlanna acquisitions. Both businesses

performed well in FY26, in line with the anticipated acquisition economics, adding top-line sales

with PBT margins favourable to the wider Group.

Gross profit

FY26

£m

FY26

% Sales

FY25

£m

FY25

% Sales

Group sales 582.7 542.5

COGs (189.0) (32.4%) (164.4) (30.3%)

Product margin – constant currency 393.7 67.6% 378.1 69.7%

FX (losses)/gains (5.5) (0.9%) (0.8) (0.1%)

Product margin 388.2 66.6% 377.3 69.5%

Store and warehouse wages (143.3) (24.6%) (134.4) (24.8%)

Property costs (27.4) (4.7%) (25.0) (4.6%)

Other direct costs (28.8) (4.9%) (24.1) (4.4%)

Gross profit 188.7 32.4% 193.8 35.7%

Adjusted gross profit 193.2 33.1% 192.9 35.6%

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.

CFO’S REVIEW CONTINUED

Card Factory plc Annual Report and Accounts 2026

Product margin, which includes the purchase price of goods along with inbound freight,

carriage and packing, increased, when calculated using a constant rate of currency exchange,

by £15.6 million to £393.7 million.

However, product margin rate on a constant currency basis fell by 2.1 percentage points

to 67.6%. As we execute our strategy, we expect product margin rates to gradually reduce.

This reflects our objective to grow our share of the celebrations market in which we operate,

with non-card products attracting a lower rate, but higher absolute value of product margin,

than cards. In addition, the growth of our wholesale business has a similar impact with lower

product margins but, on average, higher PBT margins than other channels.

In FY26, we also saw some one-time impact from range-change and promotional activity in the first

half of the year as we positioned ourselves for the key Christmas season. For the full year, COGs

includes a charge of £2.1 million related to inventory provisions, due to slower than expected sell-

through rates linked to the impact of fewer transactions on UK stores sales in the year.

The Group purchases approximately half of its goods for resale in US Dollars (USD) from

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

us from short-term volatility in currency rates. Foreign exchange (FX) losses includes two

components, the underlying exchange differences to convert purchases in the year from the

constant currency rate to the actual exchange rate achieved in the period, plus the

non-underlying valuation movements that relate to the components of our FX hedging

portfolio that do not qualify for hedge accounting under the applicable accounting standards.

Underlying FX losses reduced year on year, from £2.3 million in FY25 to £0.8 million in FY26,

principally reflecting an improved effective rate on USD deliveries in the year. Our average USD

delivered rate in FY26 was 1.2842, compared to 1.2589 in FY25.

Non-underlying FX losses increased significantly, reflecting volatility in market FX rates between

31 January 2025 and 31 January 2026, and the resulting impact on the balance sheet valuation

of our portfolio of FX derivatives for delivery in future periods. These non-cash, non-trading

losses amounted to £4.7 million in FY26.

Looking forward, if current market GBP/USD rates are maintained, we would expect delivered

rates to trend gradually higher over the next two to three years.

Store and warehouse wages increased by £8.9 million, or approximately 6.6%. The impact of

living wage and national insurance changes from April 2025 was estimated to be £15 million,

with a further increase in the size of the store estate of approximately 2.7%. These inflationary

impacts were offset by a continued focus on store productivity, which resulted in a 9%

reduction in store hours and lower levels of temporary and seasonal staff recruitment.

Property costs include business rates, service charges and insurance, and have increased

year on year due to the increase in size of the store estate and business rates increases from

April 2025. Other direct costs include direct insurance premiums, utilities, maintenance and

marketing costs. The increase from FY25 is predominantly due to the Funky Pigeon acquisition

and associated direct marketing costs, which are highest in the period immediately prior to the

Christmas season.

As a result, total gross profit for the Group was £188.7 million, a year-on-year reduction of

£5.1million. However, when non-underlying FX and other transactions are excluded, adjusted

gross profit increased slightly to £193.2 million, as calculated in the glossary on pages 178 to 181.

EBITDA & operating profit

FY26

£m

FY26

% Sales

FY25

£m

FY25

% Sales

Group sales 582.7 542.5

Gross profit 188.7 32.4% 193.8 35.7%

Operating expenses (71.9) (12.3%) (66.3) (12.3%)

EBITDA 116.8 20.0% 127.5 23.4%

Adjusted EBITDA 123.6 21.2% 128.6 23.7%

Depreciation & amortisation (16.2) (2.8%) (12.2) (2.2%)

Right-of-use asset depreciation (36.6) (6.3%) (36.4) (6.7%)

Impairment reversals/(charges) (4.6) (0.8%) 0.4 0.1%

Operating profit 59.4 10.2% 79.3 14.6%

Adjusted operating profit 71.5 12.3% 80.7 14.9%

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 £5.6 million compared to the prior year, to

£71.9 million, £7.1 million of which is attributable to new and annualised acquisitions.

Onan organic basis, operating costs have reduced year on year due to savings as a result

of restructuring activities activated at the end of FY25 and reductions in indirect marketing

expenditure. In addition, we incurred £1.7 million of one-off transaction costs associated

withthe Funky Pigeon acquisition, which have been excluded from Adjusted results as a

non-underlying item.

EBITDA was, therefore, £116.8 million in FY26, compared to £127.5 million for the prior year.

Right-of-use asset depreciation has increased modestly in FY26, as increases resulting from

new stores were offset by savings on renewals, including reallocation of renewal costs between

depreciation and interest charges as a result of changes in the underlying interest rate implicit

in the lease. 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 negotiate reductions in market rents where available.

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

£70.4 million (a margin of 12.1%) in FY26 compared to £83.5 million in FY25 (a margin

of15.4%).

Strategic Report Governance Financial Statements

Company Information

Depreciation and amortisation increased £3.9 million to £16.1 million in FY26. Of the increase,

£1.3 million relates to acquisitions and a further £1.8 million comes from amortisation of

acquired intangibles. There was a small increase as a result of continued capital investment,

with total capital expenditure of £19.4 million in FY26.

Impairment charges include a net charge of £1.5 million associated with store lease assets,

reflecting the deterioration in performance of certain stores year-on-year and anticipated

impact on earnings over the remaining lease term. Less than 2% of the total store estate makes a

negative contribution, despite the reduction in footfall and transactions in the year.

Following the acquisition of Funky Pigeon, we have worked to integrate a number of core

business systems quickly, which was successfully concluded around the end of the financial

year. Simultaneously, we have validated the plan to integrate and combine Funky Pigeon with

our existing digital business, which will drive future revenue and annualised cost synergies of

at least £5 million per annum from FY28.

As a result of this work, assets associated with the existing cardfactory digital platform and

technology stack will become obsolete in the next 12 months and, accordingly, these assets

have been fully written down in FY26 as a one-off, non-cash, non-underlying item. Total digital

impairment charges in the period were £3.2 million.

Profit Before Tax

FY26

£m

FY26

% sales

FY25

£m

FY25

% sales

Group sales 582.7 542.5

Operating profit 59.4 10.2% 79.3 14.6%

Net finance costs (15.5) (2.7%) (15.2) (2.8%)

Profit Before Tax 43.9 7.5% 64.1 11.8%

Non-underlying transactions 12.1 2.1% 1.9 0.4%

Adjusted Profit Before Tax 56.0 9.6% 66.0 12.2%

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

FY26

£m

FY25

£m

Interest on bank loans and overdrafts 6.5 6.4

Interest received on deposits (0.3) (0.2)

Other finance costs

0.6 1.0

IFRS 16 leases interest 8.7 8.0

Total finance expenses 15.5 15.2

1. Other finance costs includes loan issue cost amortisation and other financing costs.

Net finance costs increased by £0.3 million to £15.5 million, which includes interest paid on

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

earned on cash investments.

The average cost of our senior group facilities in FY26, taking into account margin,

indexationand the impact of hedging activity, was 6.5% (FY25: 7.1%). The decrease

principallyreflects thegradual reduction in market rates of interest during the year.

Other finance costs in FY25 included a £0.5 million one-off charge as a result of the

April2024refinancing.

FY26

£m

FY25

£m

IFRS 16 depreciation 37.7 36.0

IFRS 16 leases interest 8.7 8.0

Total IFRS 16 46.4 44.0

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.

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 (PBT), which excludes the impact of one-off transactions in the

period that are not reflective of the Group’s underlying trading performance, was

£56.0 million compared to £66.0 million in FY25, a reduction of 15.2%, which principally reflects

the challenging trading conditions for UK stores in the final quarter of the year.

Adjusted PBT margin has reduced as a result to 9.6%.

Reported Profit Before Tax for the year was £43.9 million, down from £64.1 million for the

previous year.

The total reported Profit Before Tax for the year includes non-cash unrealised losses on

derivative contracts of £4.7 million, impairment charges in relation to digital assets of

£3.2million, plus amortisation of acquired intangible assets of £2.1 million in addition to

cash charges relating to transaction and integration costs of £2.1 million. These items are

notreflective of the underlying trading performance of the Group and/or are one-off in

natureand, as such, have been excluded from Adjusted PBT.

Taxation

The majority of the Group’s profits are made and, therefore, subject to taxation, in the UK.

Thetax charge for FY26 of £12.7 million (FY25: £16.7 million) reflects an effective tax rate of

28.9% (FY25: 25.4%).

CFO’S REVIEW CONTINUED

Card Factory plc Annual Report and Accounts 2026

The reduction in the tax charge in part reflects lower profitability, with the higher effective rate

principally due to the impact of adjustments related to the effect of expenses not deductible

for tax purposes which increased in FY26 due to the one-time effect of transaction costs

related to the Funky Pigeon acquisition. On an Adjusted basis, excluding the tax impact on

non-underlying transactions, the effective tax rate was 26%.

Going forward, we expect the effective tax rate to continue to be similar to the headline rate

ofcorporate tax in the UK (currently 25%) in future periods.

The Group makes UK corporate tax payments under the ‘Very Large Companies’ regime and

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

Total net corporation tax payments for the Group in FY26 totalled £12.0 million (FY25: £16.7

million), the reduction reflecting the reduction in expected taxable profits, which was known

before the final UK instalment became payable in January 2026.

Earnings per share

The net result for the year was a profit after tax of £31.2 million (FY25: £47.8 million). As a

result, basic earnings per share (EPS) for the year was 9.0 pence, with diluted EPS of 8.9 pence.

FY26 FY25

Profit after tax (£m) 31.2 47.8

Adjusted EPS (pence) 11.8 pence 14.3 pence

Basic EPS (pence) 9.0 pence 13.8 pence

Diluted EPS (pence) 8.9 pence 13.7 pence

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

11.8 pence compared to 14.3 pence in FY25. A reconciliation of all Alternative Performance

Measures is set out on pages 178 to 181.

Cash flows

FY26

£m

FY25

£m

Cash from Operating Activities (after tax) 110.3 88.9

Cash used in Investing Activities (44.8) (40.5)

Cash used in Financing Activities (64.2) (42.9)

Impact of foreign currency exchange rates (0.4) (0.1)

Net cash flow for the year 0.9 5.4

Operating cash flows less lease repayments 64.6 43.3

Free Cash Flow 40.7 17. 2

Adjusted Free Cash Flow 40.7 28.8

Free cash conversion (%) 98.9% 58.2%

Cash performance in FY26 was strong, underpinned by disciplined investment in working capital,

particularly through careful inventory management as stores sales didn’t meet our expectations

towards the end of the year. This enabled us to maintain a broadly flat working capital position,

compared to a £22.1 million outflow in FY25, supporting an increase in operating cash flows.

Going forward, we expect working capital cash flows to be broadly matched to revenue growth,

with a small level of investment as our business grows.

Capital expenditure was £19.4 million, compared to £18.4 million in FY25 as we continue to

invest in new stores and infrastructure, and growth projects to support our strategy.

Free Cash Flow in FY26 was £40.7 million, reflecting a conversion rate compared to adjusted

earnings of 98.9%, above our target range of 70–80%. We define free cash as cash flow before

M&A activity, distributions and changes in debt drawn.

This level of free cash generation enables us to maintain a progressive regular dividend despite

the reduction in earnings year on year.

We invested £27.4 million (inclusive of transaction costs) in the acquisition of Funky Pigeon and

made distributions totalling £22.2 million.

The Funky Pigeon acquisition was funded by an incremental drawdown on our Group RCFfacility.

Balance sheet

Acquisition of Funky Pigeon

On 14 August 2025, the Group completed the acquisition of 100% of the issued share capital of

funkypigeon.com Limited (‘Funky Pigeon’) from WH Smith Group for total cash consideration

of £25.7 million (after customary completion adjustments for cash, debt and working capital).

The acquired business operates funkypigeon.com, an established online personalised card and

attached gifting business, which is supported by its standalone teams in Bristol and Guernsey.

The acquisition strengthens the Group’s position within the online card and attached gifting

market in the UK and accelerates cardfactory’s digital strategy, providing a platform for

online growth, particularly in the direct-to-recipient card and attached-gifting market. Further

operational synergies will be unlocked by utilising both Funky Pigeon’s existing order fulfilment

capability in Guernsey for personalised cards and cardfactory’s in-house manufacturing and

fulfilment facility in Baildon, West Yorkshire for card and attached-gifting orders.

The acquisition was funded by the Group’s existing debt facilities, as we extended the facility

size by £35 million (to £160 million total) using the accordion option in the facility agreement.

A further £40 million of accordion remains available to the Group in future if required. The

additional facility draw over and above the initial acquisition cost and provides the Group with

flexibility to provide targeted investment into the acquired business as we aim to grow our

overall online presence and manage short-term working capital flows.

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

intangible assets of £19.7 million and £7.4 million of goodwill. See note 29 in the consolidated

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

intangibles from our adjusted PBT going forward.

Strategic Report Governance Financial Statements

Company Information

Capital expenditure

Total capital expenditure in FY26 was £19.4 million, increased from £18.4 million in FY25.

Our investment programme continues to include the rollout of new stores and refresh and

renewal of the store estate, as well as targeted investments in infrastructure and growth

projects to deliver our strategy.

Key investments in FY26 included a system upgrade to our store till systems (PoS), further

enhancements of our SAP-based ERP system and store fit outs for new stores opened in FY26.

We continue to expect that capital expenditure will be in the range of £20–25 million per

annum going forward. In FY27, we anticipate capital expenditure will be at the upper end

of this range reflecting the investment needed to deliver the target operating model for

digital and development of our manufacturing capabilities. Consequently, free cash and

cashconversion are likely to be towards the lower end of our target range in FY27.

Net Debt

FY26

£m

FY26

Leverage

FY25

£m

FY25

Leverage

Current borrowings 1.5 –

Non-current borrowings 83.8 74.0

Total borrowings 85.3 74.0

Add back capitalised debt costs 1.4 1.4

Gross bank debt 86.7 75.4

Less cash (18.8) (16.5)

Net Debt (excluding leases) 67.9 58.9

Leverage (excluding leases) 0.6x 0.5x

Adjusted Leverage (excluding leases) 1.0x 0.7x

Lease liabilities 123.2 110.4

Net Debt (including leases) 191.1 169.3

Leverage (including leases) 1.6x 1.3x

Our balance sheet remains strong. The Group’s cash generative profile enables us to maintain

low levels of Net Debt and leverage, whilst continuing to make disciplined investments to grow

the business and accelerate delivery of our strategy.

Net Debt increased by £9.0 million in FY26, closing the year at £67.9 million, resulting in an

adjusted Leverage ratio just below 1.0x, comfortably within our longer-term target to keep this

measure below 1.5x.

This represents a strong cash generation performance, while investing in the acquisition of

Funky Pigeon and making cash returns to shareholders totalling £22.2 million during the

financial year.

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, 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 glossary on

pages178to181.

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

summarised in the table below:

Facility

31 January

2026

£m

31 January

2025

£m

£160m Revolving Credit Facility (FY25: £125m) 85.0 75.0

Other facilities 1.7 0.4

Gross Bank Debt 86.7 75.4

The Group’s primary financing facilities are comprised of a £160 million revolving credit facility

(RCF), provided by a syndicate of banks, which meets the investment and working capital needs

of the Group. Other facilities are primarily comprised of local overdrafts used for day-to-day

cash management purposes.

The RCF was extended from £125 million to £160 million on 13 August 2025 in order to fund

the acquisition of Funky Pigeon.

Further, on 31 October 2025, the Group exercised and had approved the first option to extend

the RCF, which will now mature in November 2028. The Group has a further extension window

during FY27, which if exercised and approved, would extend the maturity to November 2029.

The RCF includes a further accordion of up to £40 million, which can be drawn subject to

lender approval. The interest margin on the facilities is dependent upon the Group’s Adjusted

Leverage position, with margins between 1.9% and 2.8%. The facility includes 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 (calculated

as the ratio of EBITDA plus IFRS 16 interest and depreciation to net finance charges plus IFRS

16 interest and depreciation). 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.

At 31 January 2026 the Group had undrawn committed facilities of £73.7 million

(FY25:£48.8million), resulting in total cash and committed facilities of £92.5 million

(FY25:£65.3 million).

CFO’S REVIEW CONTINUED

Card Factory plc Annual Report and Accounts 2026

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.

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. However, our near-term focus is on integration of Funky Pigeon and

delivering the anticipated synergies.

On 30 September 2025, the Board declared an interim dividend for FY26 of 1.3 pence

per share, which was paid on 12 December 2025 to shareholders on the register on

7 November 2025.

On 30 October 2025, we commenced a share buyback programme with the intention to

acquire shares to settle future employee share scheme issuances. The programme concluded

on19 December 2025 at a total cost of £5.0 million. In aggregate, 5,795,564 shares were

acquired and transferred to treasury.

Following a review of the Group’s financial performance, prospects, Net Debt and Leverage

position, as well as available investment opportunities, the Board has concluded that the

Group has excess cash at the end of FY26, supported by the strong free cash generation in the

period. As a result, we will shortly commence a share buyback programme with the intention

to repurchase up to £15.0 million of shares during FY27, subject to the normal authority to

repurchase shares being renewed at the upcoming AGM. All shares purchased under this

programme will be cancelled.

The Board remains committed to further share purchases, where required, to settle future

employee share scheme issuances and avoid dilution of existing shareholdings, subject to

relevant approvals being in place. Any requirement for such purchases will be considered

laterin FY27.

At the Annual General Meeting to be held on 25 June 2026, the Board will recommend to

shareholders a resolution to pay a final dividend of 3.7 pence per share for the year. If

approved, the dividend will be paid on 3 July 2026, with a record date of 29 May 2026.

Outlook

Despite the macroeconomic and consumer challenges experienced in FY26, the Board remains

confident in the medium-term growth opportunity for cardfactory, and we continue to believe

in our ability to generate substantial free cash flows to support sustainable, progressive regular

dividends to shareholders, balanced with continued investment to deliver future growth.

Our mid-term target to deliver mid-single-digit percentage growth in sales and mid-to-high

single-digit percentage growth in Adjusted PBT is unchanged.

Group sales, excluding the incremental benefit of Funky Pigeon, through the first three months

of the financial year have been in line with the same period last year.

We are cognisant of the situation in the Middle East, the potential for impact on direct

input costs and the forward-looking uncertainty this creates in relation to inflation and

consumersentiment.

While we remain mindful of this external backdrop, we expect to deliver Adjusted PBT in FY27

in line with the current market consensus.

As in recent years, delivery of Adjusted PBT will be weighted to the second half of the year.

Matthias Seeger

Chief Financial Officer

28 April 2026

1. According to company compiled consensus estimates as at 27 April 2026, the current range of market expectations

for FY27 adjusted PBT is £54.8 million to £60.5 million, with an average of £58.2 million, excluding a statistical outlier

significantly in excess of company guidance.

Strategic Report Governance Financial Statements

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. It is

also a key driver in highlighting how our

principal risks affect our capacity to deliver

strategicobjectives.

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 member of senior

management. Critical net rated risks are

examined and updated four times a year, while

all others undergo at least an annual review.

Risks are discussed at the senior management

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 management team

are responsible for identifying emerging risks,

any risks and opportunities to the future

success of the business in meeting its strategic

objectives and executing appropriate 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 90 to 95.

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.”

Risk management process

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.

Prevention & Compliance Committee

Monitors compliance with applicable laws and regulations and assesses the

risk impact of any new or changing laws and regulations to cardfactory.

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 respective senior management team members.

Senior management 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

Card Factory plc Annual Report and Accounts 2026

Principal risks and uncertainties

Over the last two years updates have been

made to the risk management framework,

and this year has seen a key development in

that the approach to risk appetite has been

updated with appetite levels being set at a

Group, risk category and individual risk level.

The senior management team assigned risk

appetite levels and these were approved by

the Audit & Risk Committee in January 2026.

The overall Group risk appetite level has been

set as “Balanced; we pursue opportunities

allowing measured risk-taking consistent

withstrategy.”

The Audit & Risk Committee performs a

thorough review of the principal risks facing

the Group at each meeting. These reviews

take into account how risks and impacts

arising from business relationships, products

and services affect the Group risks and

principal risks and uncertainties including

reputational risks.

In March 2025, at the approval of the senior

management team and the Audit & Risk

Committee, the buying element of the ‘supply

chain risk’ was separated to create its own

risk on the Group risk register as this is crucial

to the success of the Group. The remaining

elements of this risk were re-titled ‘supply

chain logistics’. For the purposes of Principal

Risks and Uncertainties this risk has remained

as ‘supply chain’.

Three other risks have seen a change in their

risk descriptions in the year, these being

‘geopolitical risk’, ‘strategy’ and ‘ESG’ to ensure

that these are representative of our business.

No risks have seen an increase or decrease in

their net risk score in the year.

1. IT infrastructure

&security

2. Business continuity

3. Cyber security

4. Supply chain

5. Regulatory compliance

6. Geopolitical instability

7. Loss of position as

leading value specialty

retailer for card

8. Cost price inflation

9. ESG compliance &

climate change risks

Impact

The risks noted above are shown on a net basis.

Likelihood

9 8

On a quarterly basis, emerging risks to

the Group are discussed by the senior

management team and are presented to the

Audit & Risk Committee for consideration.

Following these discussions, emerging risks

are either added to the Group risk register,

retained on the emerging risk list or are

discounted. There is one risk on the emerging

risk list, this being ‘AI – disruption to market’.

Funky Pigeon has a detailed risk register in

place, and these risks are reviewed by their

senior leadership periodically. A separate

review of these risks has been performed,

and with the exception of the Funky Pigeon

cyber risk, the other risks in the register do

not meet the criteria for inclusion on the

Group risk register. In FY27, Funky Pigeon will

be fully integrated into the cardfactory risk

management framework, and any updates

that are required to the Group risk register

and/or principal risks and uncertainties will

bemade at that time.

The principal risks on pages 74 to 77

represent the most material uncertainties

that could affect performance and strategic

delivery. Each is actively monitored, with

mitigations in place and clear ownership

across the business.

See pages

74 to 77 for

a detailed review

of our principal

risks and

uncertainties

Principal risks impact and likelihood matrix

1 2 3 4 5

Strategic Report Governance Financial Statements

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.

• IT specialists support out-of-date/legacy systems with network detection and response software operational

and back-up arrangements tested routinely and IT disaster recovery processes in place.

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 wholesale

partners or fulfil online sales resulting in

financial loss, fines, loss of sales and/or

reputational damage.

• The business continuity management framework and policy are reviewed annually and are approved by the

senior management 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.

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

produced and plans updated accordingly.

Cyber security

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.

• Cyber security plans are operational with multiple cyber security and physical security controls either

enhanced or implemented in 2025 including:

– Phishing email spam filter protection level increased; colleague phishing tests in place with results

reportedto the senior management team.

– Store access controls updated.

– Updated service desk verification process for colleague passwords changes.

– Patch management, firewall, back-up and password policies in place.

– Annual penetration tests performed.

– Point of sale (tills) meets all payment card industry (PCI) compliance requirements.

• In addition, we have dedicated cyber expertise to manage our cyber security processes.

Risk trend

Stable Increasing Decreasing

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

RISK MANAGEMENT CONTINUED

Card Factory plc Annual Report and Accounts 2026

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, suppliers failing to act or operate

ethically and disruption at various stages of

the supply chain including transportation and

importing which could result in unavailability

of stock leading to reduced sales.

• Partnership with a specialist third party consultant to manage the supply chain risks, and systems are integrated

to monitor routes and multiple shipping agents and lines.

• Active monitoring of shipping channels and any issues are reviewed and discussed at a senior management

team level as to any potential impact as they arise.

• Any increase in shipping costs is reviewed and factored into the budget and considerations to price

increases made.

• A commercial strategy is in place, which incorporates sourcing and category plans along with quarterly reviews

of supplier performance including quality, on time delivery, technical requirements, etc.

• All overseas suppliers sign up to the Trade Interchange platform providing all necessary documentation relating

to auditing including adherence to the Modern Slavery Act.

• External and ethical audits and Sedex membership performed with a ‘No audit, No order’ approach adopted

requiring inspection of factories by cardfactory teams together with testing, and pre-shipment sampling of

production models mitigate this risk.

• All product testing and quality assurance inspection controls undertaken by authorised accredited providers.

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.

• Prevention & Compliance Committee established to review all matters of compliance with monthly reporting to the

senior management team.

• Compliance responsibilities matrix in place detailing all compliance-related matters across the organisation

with assigned owners.

• External advisers who provide ad hoc information updates or highlight changes to existing legislation or new

regulations that may impact the organisation.

• 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.

Risk trend

Stable Increasing Decreasing

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

Strategic Report Governance Financial Statements

Company Information

Strategic risks

Risk Trend Description Mitigation

ESG compliance

and climate

change risks

Link to strategy

Failure to align with evolving Environmental,

Social, and Governance (ESG) standards

and stakeholder expectations including

sustainable sourcing, ethical labour practices,

and transparent governance may result in

reputational damage, regulatory penalties,

and loss of colleague and customer trust,

leading to a decline in Group revenue,

profitability, and market share.

• Monthly Sustainability Steering Group (SSG) reviews progress against the overall strategy, drives sustainability

commitments and manages the sustainability risk register. This SSG is supported by topic-specific working

groups where needed to drive forward specific operational initiatives e.g. waste reduction.

• Various other actions in relation to ESG can be found on pages 36 to 55.

Loss of position

as leading

value specialty

retailer

forcards

Link to strategy

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.

• A ‘Pricing Framework’ is in place which sets out cardfactory’s approach and is supported by a price modelling

tool, which is used to model price/volume scenarios and support the business to make informed pricing

decisions both online and in stores.

• We gather value perception data monthly to understand the impact on our performance in the market relative

to our competition. This data is summarised and is fed into our activity plans, in particular our trading plans,

and annual strategy review.

• The annual card market study gives us a very detailed understanding of the card market, and this is used to

inform our business strategy, particularly the commercial strategy.

• See Our Strategy in Action on pages 20 to 35 for additional actions.

RISK MANAGEMENT CONTINUED

Risk trend

Stable Increasing Decreasing

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

Card Factory plc Annual Report and Accounts 2026

Financial risks

Risk Trend Description Mitigation

Geopolitical

instability and

other global

events

Link to strategy

Failure to address geopolitical uncertainties,

e.g. wars, civil unrest, terrorism, elections,

government restrictions, geopolitical

competition, fractured international

relations, the impact of increased

tariffs, and potential future pandemics,

could significantly disrupt our business.

This may result in restricted access to

products, threats to our colleagues,

operational challenges, and broader

globaleconomicimpacts.

• We monitor the external environment for emerging risks that could disrupt our business, creating/updating

plans with specific milestones and dedicated oversight to ensure resilience.

• We closely track global developments and government guidelines. This includes engagement with trade,

government, industry and ongoing monitoring of potential changes to the future political landscape.

• The safety and wellbeing of our colleagues and customers remain our highest priority. Management monitors

events, including the spread of highly infectious diseases, evaluates their impacts, and formulates appropriate

response strategies.

Cost price

inflation

Link to strategy

Increasing input costs without mitigating

actions will either result in lower level of

profitability/generation of cash or forces

into higher pricing resulting in cardfactory

possible impact on value perception and

customers choosing to buy elsewhere.

• We monitor the markets with a specific focus on labour, energy and freight costs to identify any potential

increases and lock in future rates where applicable.

• Hedging in place for FX, interest and energy as per the Board-approved policies to provide certainty for the

near, and mid-term; and the hedging position is reviewed monthly.

• Pro-active plans are developed as part of the annual planning and monthly review process to mitigate cost

price inflation.

• ‘Simplify & Scale’ is a multi-year programme to pro-actively identify plans and actions to mitigate future cost prices.

Risk trend

Stable Increasing Decreasing

Link to strategy:

Increasing breadth of product offering

Create a full omnichannel offer

A robust and scalable central model

Strategic Report Governance Financial Statements

Company Information

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 76

2. The Company’s employees. Pages 60 to 62 Page 125 and 126

3. Social matters. Pages 41 and 59 Pages 39 to 41

4. Respect for human rights. Pages 63 and 75 Page 75

5. Anti-corruption and anti-bribery matters. Pages 75 and 89 Pages 75 and 89

Required information

6. Description of the Company’s business model. Pages 12 and 13

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 72 to 77

10. Description of the non-financial key performance indicators relevant to the Company’s business. Pages 3, 15, 39 to 41, 54 and 56 to 63

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 178 to 181 for Alternative Performance Measures.

The Strategic Report, which was approved by the Board on 27 April 2026 and is set out on pages 1 to 78.

Darcy Willson-Rymer

Chief Executive Officer

28 April 2026

Card Factory plc Annual Report and Accounts 2026

Governance

80 Chair’s letter

81 Governance at a glance

82 Board of Directors

84 Corporate Governance Report

90 Audit & Risk Committee Report

96 Remuneration Committee Report

100 Directors’ Remuneration Report – Remuneration Policy

108 Annual Report on Remuneration

122 Nomination Committee Report

124 Directors’ Report

129 Statement of Directors’ responsibilities

Strategic Report Governance Financial Statements

Company Information

Governance

Governance supporting

strategic growth

Paul Moody

Non-Executive Chair

I am pleased the previously announced buyback of shares

into treasury for use to satisfy employee share awards has

addressed this concern.”

Dear shareholder

The Board’s continued focus on governance

enhancements to support the cardfactory

Group realise sustained strategic growth

has informed key governance activity during

FY26, which included support of the refreshed

digital strategy, to be rebased on the Funky

Pigeon technology platform; focus on

continual enhancement to support the store

estate; and focus on growth of our wholesale

and international business.

Operational efficiency and investment to

facilitate year-on-year growth remain a key

focus as we mitigate the impact of cost and

wage inflation.

The Board has invested time during the

year in addressing the updated governance

framework included in the FRC Corporate

Governance Code 2024 and in planning for

the additional requirements from Provision 29

that took effect from 1 February 2026 and will

be included in our FY27 governance reporting.

The Board was unchanged during the year,

comprising six members. The Committee

reviewed skills and experience of the Board

(including the data on page 81) and continues

to consider it is appropriate for the Company,

given the nature of its business, which

also meets the FRC Corporate Governance

Code’srequirements.

The Board have again concluded that it 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 internally conducted evaluation of the

Board also identified no material issues of

concern, with new objectives being adopted to

support the strategic growth of the business

for the long-term benefit of all stakeholders.

CHAIR’S LETTER

I enjoyed the opportunity to speak to many of

our largest shareholders to understand their

priorities and preferences for the direction

of the cardfactory Group and to understand

reasons for just over 20% of voters not

supporting share capital management

resolutions at our 2025 Annual General

Meeting (AGM). Although the resolutions

opposed the grant of authority to allot shares

and disapplication of pre-emption rights

(which were passed), feedback indicated the

21.5% votes against these resolutions were

due to concerns on equity dilution from

employee share awards. I am pleased the

previously announced buyback of shares into

treasury for use to satisfy employee share

awards has addressed this concern.

We look forward to welcoming shareholders

to our AGM on 25 June 2026.

Paul Moody

Chair

28 April 2026

Card Factory plc Annual Report and Accounts 2026

Chair’s Letter – Corporate Governance

GOVERNANCE AT A GLANCE

Board member experience

Design/

manufacturing Retail

Online/

digital 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

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:

Code compliance

The Company fully complied with the

principles and all relevant provisions of the UK

Corporate Governance Code (2024) published

by the Financial Reporting Council (the ‘Code’)

throughout the financial year. 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. Compliance with the

Code is realised through the governance

structures adopted by the Board, including

adoption and application of terms of

references for each Committee of the Board.

This includes a schedule of activity for the

Board and its Committees that ensures the

Board considers all governance requirements,

including annual strategy reviews, annual

succession planning assessment, annual

board performance reviews and regular

updates on stakeholder feedback. As part

of the Board succession planning, and when

any changes to the Board or its Committees

are considered, the Code requirements on

composition and membership are assessed.

Board gender

Board ethnicity

See the Board of Directors onpages 82–83.

Board tenure

Female

Male

Jan 2026

0–2 years

5–8 years

2–5 years

Jan 2026

Ethnic minority

White

Jan 2026

Page

Board leadership and

companypurpose

Promoting long-term value. 10–11

Ensure resources, policies and

practices to meet objectives

and measure performance.

10, 12–13,

Purpose, values, strategy

and culture.

16, 20–34,

Board engagement with

shareholders and stakeholders

(including s.172 statement).

56–63

Managing Director conflicts

ofinterests.

Workforce policies

andpractices.

125–126

Division of responsibilities

Board structure

andindependence.

Board responsibilities. 85

Page

Composition, succession

andevaluation

Board experience. 81

Nomination Committee Report. 122–123

Board succession planning. 87

Board performance review. 87

Audit, risk and internal control

Audit & Risk Committee Report. 90–95

Independence and

effectiveness of external

auditor and internal audit.

94–95

Fair, balanced

andunderstandable.

94–95

Risk management and internal

control framework.

72–77

Remuneration

Remuneration Committee

Report (including Policy).

96–121

Strategic Report Governance Financial Statements

Company Information

Governance at a glance

BOARD OF DIRECTORS

Paul Moody

Non-Executive Chair

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 was Chair of 4Imprint Group

plc from February 2016 to March 2026

and was Chair of Johnson Service Group

plc between May 2014 and August 2018.

He 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.

Darcy Willson-Rymer

Chief Executive Officer

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.

Committee membership:

Audit & Risk

Remuneration

Nomination

Chair

R N

The Board recognises the

vital role its leadership plays

in setting culture and values

and in supporting long-term

sustainable success.”

Card Factory plc Annual Report and Accounts 2026

Board of Directors

Matthias Seeger

Chief Financial Officer

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.

Pam Powell

Senior 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

the ESG Committee and the Audit and

Risk Committee of Origin Enterprises

plc (AIM: OGN).

Robert (Rob) McWilliam

Independent

Non-Executive Director

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

• Non-Executive Director and Audit

Committee Chair of the Solicitors

Regulation Authority.

• Non-Executive Director of Venture

Simulations Limited.

• Non-Executive Director of Fruugo plc

(unlisted).

Indira Thambiah

Independent

Non-Executive Director

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

• Senior Independent Non-Executive

Director and Audit Committee Chair

ofVivobarefoot Limited.

• Non-Executive Director of Verlinvest

S.A. (Belgium).

• Senior Independent Director and

Remuneration Committee Chair of

Warpaint London plc (AIM: W7L).

R R RN N NAR AR AR

Strategic Report Governance Financial Statements

Company Information

Committed to the highest

governance standards

CORPORATE GOVERNANCE REPORT

Leadership and approach

The Board is committed to achieving and

maintaining the highest standards of

corporate governance. The Board recognises

the vital role its leadership plays in setting

culture and values, and in supporting

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 beyond FY30.

• Review of the FY27 budget and annual

operating plan, including prioritising

strategic projects and investments to

support long-term growth.

• Assessment of acquisition opportunities

(including the acquisition of Funky Pigeon)

and the alignment with strategic priorities.

Post acquisition reviews of Garven and

Garlanna and assessment of performance

compared to the acquisition case.

• Organisational design, including

identification of target operating model

toaccount for international expansion

andacquisitions.

• Internally conducted Board performance

review, and review of size, composition,

skills, experience and diversity of the Board.

• Shareholder consultation following the

2025 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 and Committee

composition, balance

andindependence

The Board comprises (and during FY26,

comprised) six members, all of whom are

setout on pages 82 and 83.

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 that 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 (excluding the

Chair) and the two Executive Directors being

non-independent.

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 Committee’s are constituted in

accordance with the Code. Rob McWilliam,

Chair of the Audit & Risk Committee, is

considered by the Board to have recent

and relevant financial experience, and the

members of this Committee have competence

in the sectors in which the Group operates,

for the purpose of the Code.

Card Factory plc Annual Report and Accounts 2026

Corporate Governance Report

Board responsibility

The Company has a clear division of responsibilities between the Non-Executive Chair and the Chief Executive Officer. In

general terms, the 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).

Board attendance

During the year, the Board held nine scheduled meetings and 19 other ad-hoc Board or sub-Committee meetings.

TheCommittees of the Board also convened meetings during the year, with attendance set out below. Non-attendance at the

ad-hoc meetings arose where the Directors had prior commitments, and were unable to attend the meetings called at short

notice, but views on the matters to be considered were obtained, where possible.

Director Role

Scheduled

Board

meetings

Other Board

or Committee

meetings

Remuneration

Committee

Audit & Risk

Committee

Nomination

Committee

Paul Moody Non-Executive Chair &

Chair of Nomination Committee

9 of 9 6 of 7 3 of 3 – 1 of 1

Pam Powell Senior Independent Non-Executive Director 9 of 9 4 of 6 3 of 3 3 of 3 1 of 1

Rob McWilliam Independent Non-Executive Director 9 of 9 6 of 6 3 of 3 3 of 3 1 of 1

Indira Thambiah Independent Non-Executive Director 9 of 9 6 of 6 3 of 3 3 of 3 1 of 1

Darcy Willson-Rymer Chief Executive Officer 9 of 9 18 of 18 – – –

Matthias Seeger Chief Financial Officer 9 of 9 17 of 17 – – –

See the Committee Reports onpages 90–123.

Strategic Report Governance Financial Statements Company Information

CORPORATE GOVERNANCE REPORT CONTINUED

Board activities and effectiveness

Board meetings are structured to ensure they focus on key strategic matters that affect the business. Examples of topics reviewed during the

year are set out below. The Board also considers any decisions that are within the matters reserved for the Board.

The Board had in place a schedule of matters that were to be discussed during scheduled Board meetings 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, with flexibility to add other topics to reflect performance and priorities, as the year progresses.

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 FY26 were:

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.

Board strategy review

The Board held its annual strategy review with

the senior management team in July 2025.

This focused primarily on strategic priorities

to develop the business to a celebration

business, using market and internal

data to focus on relevant occasions and

opportunities. The strategy review included

engagement with analyst, brokers and

shareholders to also identify the opportunities

to understand concerns, priorities and inform

further development of the strategy and

how it is effectively communicated to these

stakeholder groups.

Non-Executive Director meetings

The Chair and the other Non-Executive

Directors met on four separate occasions 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 Non-Executive Directors

(excluding the Chair) met once during the

year to review the Chair’s performance, with

feedback being provided to the Chair by the

Senior Independent Director. 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.

Strategy Performance Governance

• Group strategy development and

focus on plans to progress growth

of celebration and evolution of the

digital strategy.

• Annual operating plan and projects

and investments to align with the

strategic plan.

• Group budget and

investmentpriorities.

• IT strategy, including cyber security.

• Assessment of organic and

inorganic growth opportunities and

risks for online, culminating in the

Funky Pigeon acquisition.

• Key investment project reviews.

• Capital allocation policy.

• ESG strategy.

• Trading performance including

annual and interim results.

• Key project updates.

• KPIs and balanced

scorecardperformance.

• Seasonal, divisional and strategic

initiatives and trading reviews.

• Market performance including

customer data and insights.

• Review of acquisitions,

synergyrealisation and

reviewofperformance.

• Application of capital allocation

policy, including dividends and

sharebuyback.

• 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 2025 AGM.

• Internally conducted Board performance review

and Committee performance reviews.

• Reviews of performance against Board objectives.

• Board structure, experience, and diversity, review.

• Colleague engagement, policies and

remuneration, including diversity, equality and

inclusion, and quarterly colleague listening

groupconsultations.

• ESG strategy, engagement, including support of

The cardfactory Foundation.

• Succession planning.

• Governance and legal updates and approvals for

matters reserved for the Board.

• Risk, internal audit and controls.

• Organisational design, including updates to the

operating model to take account of acquisitions.

• Committee reviews as required by applicable

terms of reference and updates to Committee

terms of reference.

Card Factory plc Annual Report and Accounts 2026

cardfactory culture

The Board relies on a range of indicators

to assess the culture at cardfactory. These

include regular presentations from the

management team, the results of colleague

engagement surveys, and feedback from the

colleague listening group (CLG), which the

Chair attends in their capacity as Designated

Director for workforce engagement. The Board

also benefits from ad-hoc discussions with

colleagues during Director store and site visits.

The Board recognises the ongoing focus on

cultivating a supportive, inclusive and

values-led culture, including providing

opportunities for colleagues’ personal

and professional development. Colleague

engagement, and levels of engagement,

remain key performance indicators.

In FY26, a renewed focus on data-driven

insights further enhanced opportunities for

colleagues to share their diversity information

through the ‘Count Me In’ campaign. This has

supported more informed decision making and

has helped to identify Disability and Wellbeing

as key areas of focus.

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.

A summary of the Committees of

the Board, their terms of reference

and their responsibilities can be

found at cardfactoryinvestors.com/

investors/corporate-governance/

with further information contained

in each Committee Report from page

90 (Audit & Risk Committee), page 96

(Remuneration Committee), and page 122

(NominationCommittee).

Board performance review

An internally conducted Board performance

review was performed during 2025

by the General Counsel & Company

Secretary and overseen by the Chair, with

separate internally conducted Committee

performance reviews, adopted for each

of the Remuneration Committee and the

Audit & Risk Committee, each overseen by

the respective Committee Chairs. Board

members completed anonymous surveys

by scoring over 40 statements from 1 to 5

out of 5 in respect of the Board and c.20

questions for each Committee. Views on

performance, effectiveness, composition,

across a comprehensive range of aspects of

its duties, were raised, with the opportunity to

provide specific comments in respect of each

question. Average scores were compared to

average scores provided in response to the

equivalent questions (where raised) in 2023,

with further review and action identified from

low-scoring questions and questions that

realised a lower average score compared

to the prior review. Actionable comments

provided where also highlighted to identify

other specific areas for improvement, which

were considered in developing new annual

Board objectives.

The results of the Board and Committee

performance reviews were considered by:

• the Chair as part of one-to-one

performance reviews with each of the

Non-Executive Directors; and

• the Non-Executive Directors, who

reviewed the findings, without the Chair

present, to provide feedback to the Senior

Independent Director, who provided

feedback to the Chair.

The Board then considered the conclusions

and recommendations from these reviews

and applied the findings in setting new

Boardobjectives for the subsequent

12-month period.

The Board set the following collective objectives

in November 2025, which are to be progressed

during the subsequent 12-month period, and

are subject to regular scheduled reviews:

• Long-term Strategic Growth: Ensure a clear

focus by management on change to realise

long-term sustainable sales and profit

growth for the Group for each key sales

channel (UK & Republic of Ireland stores,

digital and wholesale partnerships) including

addressing the decline in card-led missions;

use of technology and data; the role of

marketing; and focus on customer missions,

to support the Group to be recognised as a

celebration destination in the mediumterm.

• Shareholder Value: Provide clarity

on the Company’s strategy to deliver

sustainable growth (including growth

plans in US and digital) through effective

investorcommunications.

• Succession Planning: Focus on agreed

actions to facilitate shorter-term

succession gaps for identified senior roles.

Support and challenge senior leadership

to address development gaps on medium-

term internal potential successors.

As a result of other feedback and comments,

the Board meeting schedule for the next

financial year includes specific reviews, with

some changes being adopted to encourage

all Non-Executive Directors to participate in

stakeholder engagement (in particular with

the colleague listening group). No changes

are proposed to the Board, its composition

ormembership following thisreview.

In addition to the Board performance review,

the Board reflected on the achievement of

the objectives adopted in October 2024. It

was agreed that good progress was made in

meeting these objectives, including refining

the strategic plan, to reflect acquisitions and

macroeconomic environment, with clarity on

investment priorities for the Group, including

development of data and digital capabilities

and development of wider gift and celebration

solutions to customers.

Although progress had been made in

succession planning for the Board, gaps remain

in respect of the senior leadership team, with

plans now in place to seek to close these gaps.

A Board performance review will continue

to be conducted on an annual basis with an

internally conducted performance review

scheduled to be conducted during 2026 and

the next externally conducted performance

review to be undertaken in 2027 (following the

last external review being performed in 2024).

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 (Articles)

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.

Strategic Report Governance Financial Statements

Company Information

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 Remuneration Policy on pages 100 to 107.

The Articles 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

also provide that the office of a Director shall be vacated if they are is prohibited by law from

being a Director or are bankrupt; and that the Board may resolve that their office be vacated if

they are of unsound mind or are 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 and any

special resolution of the Company.

The Board has adopted internal delegations of authority in accordance with the Code,

whichincorporate matters that are reserved to the Board or in the terms of reference for

theBoard’s 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 subsidiary) has (and had, during the financial year

to 31 January 2026) the benefit of a qualifying third-party indemnity provision, as defined by

section 236 of the Companies Act 2006, as permitted by the Articles. 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 72 and 73 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 2026 and up

to the date of approving the Annual Report & 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 co-ordinates the Group’s programme of internal audit activity, supported by

twoindependent accounting firms.

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

Board Audit & Risk Committee Senior management team

• Takes collective

responsibility for

internalcontrol.

• Reserves certain

decisions for the Board.

• Oversees the control

framework and

responsibility for it.

• Approves key policies

and procedures.

• Monitors development

of performance.

• Oversees effectiveness

of the internal

control framework

including the financial

reportingprocess.

• 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.

CORPORATE GOVERNANCE REPORT CONTINUED

Card Factory plc Annual Report and Accounts 2026

Prevention & Compliance

Committee (PCC) Internal Audit

Compliance and

safety riskassessors

• The PCC monitors

compliance with applicable

laws and regulations,

including reporting

requirements and reports

to the senior management

team on this matter

providing reassurance that

compliance and regulations

matters are being managed.

• Provides independent,

objective assurance

to the Board, Audit &

Risk Committee and

senior management

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.

Loss prevention team

• 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;

• the PCC’s members include representatives from all key business and compliance areas and

that the PCC monitors compliance on behalf of the senior management team; 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 pages 90 and 91.

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 2026 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 124 to 128.

Anti-bribery

The Group has implemented internal procedures, and the anti-corruption & bribery policy

has been reviewed, updated and issued to all colleagues along with a refreshed training

programme in 2025 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 to prevent such

situations occurring or to address them when they do occur. By having early knowledge of any

wrongdoing or illegal or unethical behaviour, we improve our ability to intervene and stop it.

We provide a whistleblowing line, which is managed by Group Internal Audit. A whistleblowing

policy is in place, which is designed to encourage colleagues to report such situations without

fear of repercussions or recriminations provided that they are acting in good faith. 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. In FY26

a detailed review of both the whistleblowing policy and procedures have been performed and

enhancements to the policy and procedures were launched in Q1, 2026.

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 27 April 2026.

Paul Moody

Chair

28 April 2026

Strategic Report Governance Financial Statements

Company Information

Composition of Committee,

role and main activities

The Committee’s members, role and main

activities are detailed below. There has

been no change to the composition of the

Committee during the year, and the Board

is satisfied that the Committee composition

is such that it understands the risks facing

the business and is able to be robust and

challenging in its review of the Company’s

financial position and performance.

Activity during the year

The Committee met on three occasions during

the year and twice post-year-end with all

meetings being attended by all members of

the Committee as set out in the Corporate

Governance Report on page 85.

The CEO, the CFO, the Chair, 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 Committee

where required.

Rob McWilliam

Chair of the Audit & Risk Committee

AUDIT & RISK COMMITTEE REPORT

On behalf of the Audit & Risk Committee,

I am pleased to present the Committee’s

report for the year ended 31 January

2026. The Report provides an insight

into the principal areas considered

by the Committee, together with how

the Committee has discharged its

responsibilities during the year.

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 management 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.

Committee’s role

andresponsibilities

• 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.

• Evaluate the process for identifying and

managing risk throughout the Group.

• Ensure the effectiveness and

independence of the Group’s internal

auditfunction.

• Ensure that the Annual Report

& Accounts are fair, balanced

andunderstandable.

Terms of reference available at:

www.cardfactoryinvestors.com/investors/

corporate-governance.

Committee’s key actions in FY26

• Reviewed financial reporting, including

the processes in place to ensure the FY25

Annual Report and Financial Statements

are fair, balanced and understandable.

• Reviewed the continued evolution of

our risk management and internal

controlsframework.

• Adopted the Financial Reporting Council’s

‘Audit Committee and the External Audit:

Minimum Standard’.

Number of meetings held

The General Counsel & Company Secretary acts

as secretary to the Audit & Risk Committee.

Outside of the formal meeting programme,

the Chair maintains a dialogue with key

individuals involved in the Company’s

governance, including the Chair, the CEO,

the CFO and the external auditor. At least

once per year, the Committee also meets the

external auditor and Head of Internal Audit

& Loss Prevention without members of the

management team present.

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 review of the

Company’s Annual Report & Accounts for the

year ended 31 January 2025 in accordance

with Part 2 of the FRC Corporate Reporting

Review operating procedures. The Committee

received the FRC’s response in December

2025, which requested clarification relating

to the Parent Company cash flow statement.

The Committee responded to this matter

on 19December 2025, and this is deemed

resolved. See page 173.

Committee members

Rob McWilliam (Chair)

Pam Powell

Indira Thambiah

Card Factory plc Annual Report and Accounts 2026

Audit & Risk Committee Report

Financial Statements and reporting

• Reviewing the integrity of the draft Financial Statements for the year ending

January2025, 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

2025, 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.

• Approval of the Group’s half-year results statements published in September 2025.

External audit relationship

• Reviewed effectiveness of FY25 audit process.

• Received and reviewed FY26 audit plan and strategy.

• Verifying the independence of the Group’s auditor, approving their audit plan and

audit fee, and setting performance expectations.

Risk management and internal control systems

• Overseeing the Group’s approach to risk management, including review and

challenge of the Group’s risk register, risk appetite and target risk, and the process

foridentifying emerging risks.

• Reviewing the Group’s risk register in April, June, and September 2025.

• 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.

Governance and other matters

• Approved the annual tax strategy.

• Reviewed Audit & Risk Committee terms of reference.

• Assessing its own performance against its terms of reference.

In the period following the year-end, the Audit & Risk Committee met in February and April 2026 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

management team, as supplemented by the Audit & Risk Committee in February 2026.

• 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 127 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 2026, 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.

The Committee’s activities during the year are as follows:

Strategic Report Governance Financial Statements

Company Information

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 2026, the Committee reviewed the FY26 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FY26were:

• Inventory counts, valuation and provisioning.

• Impairment reviews (including goodwill).

• Alternative Performance Measures.

• Identification and valuation of acquired intangibles assets.

Significant issues

and judgements How the issues were addressed

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.

• The Group continues to hold material inventory provisions which, by their nature, involve a significant degree of estimation. Provision levels had increased year-on-year

as a result of slower sell through in UK Stores in the final quarter of FY26.

• 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. In particular, the Committee considered

whether the amendments made to categorisation and provisioning rates were appropriate in the context of recent trading and future commercial plans. The Committee

challenged certain assumptions and judgements made by management in the calculation where appropriate – noting that certain provision rates had been rounded

down compared to the absolute sell-through data; but that this was deemed appropriate due to the relatively short-term nature of the sell-through data used and

expected continued sell through of all lines beyond this period.

• 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.

AUDIT & RISK COMMITTEE REPORT CONTINUED

Card Factory plc Annual Report and Accounts 2026

Significant issues

and judgements How the issues were addressed

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 Funky Pigeon or Garven CGUs. The Group recorded a net impairment charge of

£1.4million in respect of individual store assets, which is comprised of £2.8 million of impairment charges and £1.4 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 paid particular focus to changes to management’s approach in the current year, which had been made to try and align the approach more closely with

the requirements of the relevant accounting standards. In particular, the Committee reviewed the allocation of central overheads and assets to individual stores as part

of impairment reviews, where the allocation is potentially nuanced and judgemental. However; having reviewed the approach and considered the judgements made by

management, the Committee were satisfied the methodology was appropriately balanced, taking into account the business model and commercial performance of the

stores. It was also noted that the range of reasonably alternative outcomes based on potentially different approaches to shared overhead allocation were not material.

• The Committee also considered the key assumptions used in preparing the impairment reviews and the sensitivity of the results to changes in those assumptions. The

Committee considered the recoverability of the Parent Company’s 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.

Alternative

Performance

Measures

• The Committee reviewed the use of Alternative Performance Measures (APMs) in the Annual Report & Accounts.

• As part of its assessment, the Committee reviewed the appendix (see pages 179 to 181) 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 consistent with

the approach applied in the prior year, 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 pages

64 to 71, the Committee concluded that the use of APMs was fair and balanced.

Identification

and valuation

of acquired

intangible

assets

• On 14 August 2025, the Group acquired Funkypigeon.com Limited. As a result, the Group has recognised customer and brand-related intangible assets plus additional

goodwill on the balance sheet. The fair value of the acquired assets and liabilities was supported by an external valuation expert. The final valuation report of the external

expert was provided to the Committee alongside a management paper supporting the position adopted.

• The valuation relies on several assumptions that are inherently subject to a degree of estimation uncertainty, including estimation of future cash flows of the acquired

business, customer retention rates, 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 customers.

• The Committee considered the method and associated key assumptions used in valuing the acquired assets and liabilities, and the sensitivity of the valuations to the

key assumptions. 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 the key assumptions made in the valuation, the Committee concluded that the final valuation represented a fair and

balanced position.

• 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.

Strategic Report Governance Financial Statements

Company Information

External auditor

Forvis Mazars LLP have conducted the

statutory audit for the financial year ended

31 January 2026 and have attended all

scheduled Committee meetings held during

that financial year, as well as the Committee

meetings held during February and April 2026.

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 2026 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 Forvis 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 £777k. A breakdown of fees paid to Forvis

Mazars LLP during the financial year is set

out in note 3 to the Financial Statements

onpage 152.

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 Forvis 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

£93k, equivalent to 12.0% of the audit fee.

Further details are given in note 3 to the

Financial Statements on page 152.

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.

Risk management and

internal control

The Board has overall responsibility for

maintaining sound internal control and risk

management systems and has delegated

responsibility to monitor their effectiveness

to the Committee. During the year, the

Committee has discharged this responsibility

through regular reviews of the Group’s risk

principal risks.

Internal Audit

Internal Audit plays an integral role in our

governance structure and provides regular

reports to the Committee on the effectiveness

of governance, systems and processes and

controls across the Group. The Committee

was provided with updates on Internal Audit’s

findings, key agreed actions and the status of

all actions at each meeting.

The Head of Internal Audit & Loss Prevention

is responsible for devising and coordinating

the programme of internal audit reviews and

is supported by two independent accounting

firms in the delivery of the annual plan.

The internal audit plan is approved by the

Committee annually.

Internal Audit reports are shared with Forvis

Mazars LLP, who are also invited to attend the

Committee meetings, ensuring the external

auditors have full disclosure to allow them

to account for internal audit findings in their

audit scope.

Provision 29 of the Code

The approach to complying with the new

Provision 29 of the Corporate Governance

Code 2024 has been reviewed by the Board,

and the approach taken by management is

comprehensive. The Board is aware of its

duties in the forthcoming year regarding

Provision 29 of the Code and specifically the

requirement to provide a declaration in the

Annual Report & Accounts for the year ended

31 January 2027.

AUDIT & RISK COMMITTEE REPORT CONTINUED

Card Factory plc Annual Report and Accounts 2026

FRC Audit Committees

and the External Audit:

Minimum Standards

The Committee has reviewed its activities

during the year and confirms that the

description of its work, as set out in this

Annual Report, includes all matters required

by the Financial Reporting Council’s Audit

Committees and the External Audit: Minimum

Standard applicable to FTSE 350 companies.

In line with these Minimum Standard, the

Committee has:

• Engaged, where appropriate, with

shareholders on matters relating to the

scope of the external audit.

• Supported full and unrestricted access by

the external auditor to staff, information

and records necessary for the audit.

• Encouraged robust challenge from the

external auditor, ensuring that points

raised are fully considered and reflected

appropriately in the Financial Statements.

• Monitored the external auditor’s

independence, objectivity and

effectiveness, taking account of relevant UK

professional and regulatory requirements.

• Implemented and overseen the policy on

non-audit services provided by the external

auditor, ensuring prior approval of such

services and assessing any impact on

independence in line with regulatory and

ethical guidance.

• Reported to the Board on how

the Committee has discharged its

responsibilities in respect of the

externalaudit.

• The Committee also confirms that the

disclosures provided in this Annual

Report reflect the Minimum Standards

requirement for transparent reporting

on how the Committee has exercised

oversight of the external audit.

The Committee has overseen all audit-

related matters in accordance with the

Statutory Audit Services Order and confirms

that no circumstances arose during the

year that would constitute non-compliance.

The Company continues to support the

Order’s objective of strengthening auditor

independence, improving market competition,

and ensuring robust governance over the

statutory audit process.

Forvis Mazars LLP were appointed as the

Group’s external auditors for the year ended

31 January 2024. The next transparent bidding

process for external audit services is for the

year ended 31 January 2034.

Whistleblowing

The Committee received updates on any

significant whistleblowing matters. No

whistleblowing matters in the year resulted

ina significant incident.

Internal Audit, along with other key functions

have reviewed the effectiveness of the

whistleblowing process during the year and

actions to further improve the process will be

implemented in the next financial year.

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.

Performance review

The evaluation of the performance of the

Committee was conducted as part of the

broader Board performance review set

out on page 87 of this Annual Report. I am

pleased to report that feedback relating to the

Committee was positive, indicating that the

Committee continues to operate effectively.

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.

This report was reviewed and approved by the

Audit & Risk Committee on 27 April 2026.

Rob McWilliam

Chair of the Audit & Risk Committee

28 April 2026

Strategic Report Governance Financial Statements

Company Information

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. Other

than the small changes to annual bonus

measures described below, no change in the

implementation of the Policy is proposed for

FY27. The Committee will be carrying out a full

review of the Policy during FY27 to determine

whether any changes should be made prior

to the next triennial shareholder vote at the

2027 AGM.

Application of the Remuneration

Policy during FY26

The Committee considers the Remuneration

Policy to be effective and that it operated

as intended during FY26, which ensured the

Executive Directors and senior management

team continued to focus on further growth of

the business, taking account of the strategic

plan. Financial performance fell short of

expectations; while there has been progress

in key strategic areas for growth, this has

been behind expectations.

Indira Thambiah

Chair of the Remuneration Committee

REMUNERATION COMMITTEE REPORT

I welcome the opportunity to present the

Remuneration Report for the financial year

to 31 January 2026.

Introduction

This Directors’ Remuneration Report

is divided into three sections: (1) this

introduction outlining key decisions (pages

96 to 98); (2) the Directors’ Remuneration

Policy, which was adopted in 2024

(pages 100 to 107); and (3) the Annual

Report on Remuneration for the year to

31January2026 (pages 108 to 121).

This introduction and the Annual Report

on Remuneration will be put to an advisory

shareholder vote at the Annual General

Meeting (AGM) to be held on 25 June 2026.

Remuneration Policy

The Remuneration Policy (on pages

100 to 107) was adopted following

approval by 96% of shareholder votes

at the June 2024 Annual General

Meeting, following a triennial review

andshareholderconsultation.

Committee’s role

andresponsibilities

• Making recommendations to the

Boardon the Group’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

Chair, the Group’s Executive Directors, its

Company Secretary and other members of

the Group’s senior management team.

• Ensuring appropriate engagement with

shareholders and the workforce takes

place on the Remuneration Policy and its

alignment with wider Group pay policy.

Terms of reference available at:

www.cardfactoryinvestors.com/investors/

corporate-governance.

Committee’s key actions in FY26

• Reviewed all components of benefits

and reward for the senior management

team and colleagues across the Group,

including design and setting terms for

new incentive awards.

• Assessed performance of the business

and senior management against annual

bonus criteria and performance underpin

for restricted share awards, including

ESG bonus underpin assessment

and consideration of the exercise of

discretion when determining the final

award outcomes.

• Reviewed the effectiveness of the

Remuneration Policy and undertook

initial planning for the next triennial

review of the Policy for publication

in2027.

Number of meetings held

Annual bonus

The Company will not pay an annual bonus to

the Executive Directors for FY26. The formulaic

outcome for the bonus was 19% of maximum.

Of this, 10% was due to performance above

stretch under the cash flow productivity

measure, with actual performance of 73%

against a stretch target of 66%. A further 9%

was achieved from performance between

target and stretch under the net new stores

strategic objective, with 27 net new stores

opened. The threshold performance for the

other financial and strategic measures were

not achieved.

When assessing the formulaic outcome, the

Committee reflected on the shareholder

experience during the year, which included a

material downgrade in performance that was

announced in December 2025, which impacted

on share price. Another consideration was

that the outcome of the colleague bonus plan

(which is primarily based on Adjusted PBT)

resulted in no bonus award to wider colleague

participants. In view of the wider stakeholder

experience, the Committee exercised

discretion to reduce the annual Executive

bonus award from the formulaic result, to nil.

Committee members

Indira Thambiah (Chair)

Paul Moody

Pam Powell

Rob McWilliam

Card Factory plc Annual Report and Accounts 2026

Remuneration Committee Introduction

Restricted Share vesting

Restricted Share Plan (RSP) awards granted

in May 2023 are due to vest from May

2026, 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 was robust and

sustainable, that the business improved its

impact on society and the environment and

was strengthened by management’s actions.

The Committee has discretion to adjust the

outcome after taking into account relevant

factors such as financial and non-financial

KPIs, delivery against strategic priorities and

ESG commitments.

In assessing the underpin, the Committee

considered financial and non-financial KPIs

of the business as well as delivery against

strategic priorities over the three-year

period. The Committee considered that the

performance criteria had been achieved

for the majority of the three financial year

performance period, before the financial

performance in the latter part of FY26

impacted this progress. Much of the final year

underperformance was considered to have

been realised as a result of market challenges,

rather than due to management failure (for

which the performance underpin is primarily

designed to avoid unjust reward). Elements

of strong performance over the period were

considered, including the action to address

material inflation, through sustained ‘Simplify

& Scale’ actions, the progress made on

improving legacy systems and substantial

progress on the ESG strategy.

The Committee noted that, if the awards

were permitted to vest in full, their value

would be reduced due to the lower share

price on vesting, compared to the value

at grant, which was considered to be a

proportionate outcome in the context

of the underperformance for part of the

performance period and overall aligned

withthe shareholder experience.

Therefore, taking all these factors into

consideration, the Committee resolved to

approve vesting of the 2023 RSP awards

and determined that it was not appropriate

to exercise any discretion in respect of the

awards. The current share price is lower

than the share price at the date of award

and, therefore, the Committee considered

that there was no requirement to make an

adjustment for windfall gains. Further details

are disclosed on page 112.

The Committee had no reason to invoke the

malus and clawback provisions rights during

the period, the annual bonus plans or the

restricted share plans.

Board changes

There were no changes to the Board

duringFY26.

How we intend to apply the

Remuneration Policy in FY27

Base salary

The Committee have reviewed the annual

salary for the leadership team, including the

CEO and CFO, and the fee for the Chair.

As a significant proportion of cardfactory’s

colleagues are employed in its large UK &

Republic of Ireland store estate, many of

whom earn the National Living Wage, a

further year of above inflation increases of

4.1% (NLW) and 8.5% (National Minimum

Wage (18 to 20 years old)) took effect from

1 April 2026. As in previous years, this also

required increases to more senior roles to

ensure differentials were maintained.

The Committee, after taking account of

market data for comparable roles, applied

an annual increase of 3% to each of the CEO,

CFO and Chair, to take effect from 1 April

2026. The Board also increased the base fee

for the Non-Executive Directors (NEDs) by 3%

with effect from 1 April 2026. The additional

fees for the SID and Committee Chairs

remainunchanged.

The principle adopted by the Committee is

consistent with pay awards made to other

support centre colleagues.

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 UK 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 FY27 annual bonus entitlement will be

assessed based on two financial measures,

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

• free cash (i.e. free cash after investment

in capital expenditure and working capital,

but before distributions (for 10% of the

maximum entitlement), each of which

are subject to Remuneration Committee

discretion for any adjustments made to

reported measures),

with the remaining 30% of maximum

potential bonus determined by the following

strategicobjectives:

• Realisation of cost and revenue synergies

on an annualised basis based on

integration of the cardfactory.co.uk and

Funky Pigeon businesses to a single

technology platform, including optimising

fulfilment between the Baildon and

Guernsey fulfilment facilities (10% of

maximum bonus entitlement);

• North America sales (development and

growth of the Garven and cardfactory

business in North America) (10% of

maximum bonus entitlement); and

• UK store Like-for-like sales growth

(whichincludes maintaining card sales,

while growing our gift and celebration

essentials offering) (10% of maximum

bonus entitlement).

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 any share buybacks, and the availability

of funds to make investment decisions in line

with the Company’s strategic plans.

Strategic Report Governance Financial Statements

Company Information

It complements the PBT measure by driving

management to convert profits into cash, to

manage working capital and keep interest

costs low. The Committee revised the specific

measure from a productivity to an absolute

measure to provide a clearer target for

management, which more closely aligns with

the shareholder experience.

There has been some evolution of our

strategic objectives for FY27. Following the

acquisition of Funky Pigeon in August 2025,

realisation of the acquisition synergies are a

key strategic priority, which are to be realised

through cost reduction and sales growth by

combining the Funky Pigeon and cardfactory.

co.uk operations and improved efficiencies

and opportunities to cross sell to each

customer base. The growth of the business

in North America is a further key strategic

priority that has replaced the previous

wholesale partner sales metric in the bonus.

The UK store LFL sales growth measure

supports our strategic focus on growing our

celebrations offerings.

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 FY26, in May 2026. The awards will

be subject to the same performance underpin

adopted in 2025 (see page 111).

Conclusion

The Committee considers that during the

year the Remuneration Policy provided a

strong link to the business strategy and

provides an appropriate link between reward

and performance. The Committee will be

reviewing the Remuneration Policy during

the year in advance of submitting a revised

Policy to the 2027 AGM to ensure it supports

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.

Indira Thambiah

Chair of the Remuneration Committee

28 April 2026

REMUNERATION COMMITTEE REPORT CONTINUED

Card Factory plc Annual Report and Accounts 2026

Strategic Report Governance Financial Statements

Company Information

DIRECTORS’ REMUNERATION REPORT

Introduction

The Directors’ Remuneration Policy section (pages 100 to 107) 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 104 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.

100

Card Factory plc Annual Report and Accounts 2026

Directors’ Remuneration Report – Remuneration

Policy

Purpose and link to strategy Operation Maximum opportunity Performance metrics

FIXED PAY CONTINUED

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.

Strategic Report Governance Financial Statements

101

Company Information

Purpose and link to strategy Operation Maximum opportunity Performance metrics

VARIABLE PAY CONTINUED

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.

DIRECTORS’ REMUNERATION REPORT CONTINUED

102

Card Factory plc Annual Report and Accounts 2026

Purpose and link to strategy Operation Maximum opportunity Performance metrics

VARIABLE PAY CONTINUED

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 106).

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.

• 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 management 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.

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;

Strategic Report Governance Financial Statements

103

Company Information

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’, ‘Maximum performance’ and ‘Maximum performance (with 50%

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

dividendaccrual.

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

awards are not scaled back. These charts have been updated from the ones included in the

shareholder approved policy to reflect implementation in FY27:

DIRECTORS’ REMUNERATION REPORT CONTINUED

Chief Executive Officer

Chief Financial Officer

Maximum

performance

Performance in line

with expectations

Minimum

performance

0 400,000

100%

£388k

£859k

£1,189k

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

Maximum

performance

Performance in line

with expectations

Minimum

performance

0 400,000

100%

£544k

£1,303k

£1,841k

42% 24% 34%

30% 34% 24% 12%

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

Fixed pay Annual bonus LTIP: Restricted shares

Minimum Salary and benefits

asat 1 April 2026.

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%.

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

104

Card Factory plc Annual Report and Accounts 2026

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.

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 107.

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.

Strategic Report Governance Financial Statements

105

Company Information

DIRECTORS’ REMUNERATION REPORT CONTINUED

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.

Shares 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.

Default treatment. Awards lapse. n/a

Restricted Shares 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.

106

Card Factory plc Annual Report and Accounts 2026

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.

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.

Strategic Report Governance Financial Statements

107

Company Information

ANNUAL REPORT ON REMUNERATION

This is the Annual Report on Remuneration for the financial year ended 31 January 2026 (FY26). 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 100 to 107) will be applied in the coming year.

Remuneration at a glance

Overview of Executive Director remuneration for FY26 and FY27.

Element FY26 FY27

Basic salary From 1 April 2025:

CEO: £491,400 (No change: 2% increase waived by the CEO)

CFO: £365,976 (+2%)

Average workforce change: +7.5%

From 1 April 2026:

CEO: ££506,142 (+3%)

CFO: £376,955 (+3%)

Aligned with the approach for the wider workforce.

Average workforce change: +4.7%

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.

60% based on PBT performance. 0% of 60% 60% based on PBT performance.

10% based on free cash flow productivity (%). 10% of 10% (nil paid) 10% based on free cash before distributions (£).

10% based on online sales (strategic growth objective). 0% of 10% 10% based on Funky Pigeon synergies (strategic growth objective).

10% based on wholesale partner sales (including Garven,

Garlanna and SA Greetings) (strategic growth objective).

0% of 10% 10% based on North America sales (strategic growth objective).

10% based on net new stores (strategic growth objective). 9% of 10% (nil paid) 10% based on UK Store LFL sales growth (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 (107.7% of basic salary achieved as at 31 January 2025). No change. Shareholding of 132% of basic salary achieved as at

31January 2026.

CFO: 200% of basic salary (16.7% of basic salary achieved as at 31 January 2025). No change. Shareholding of 19.7% of basic salary achieved as at

31January 2026.

108

Card Factory plc Annual Report and Accounts 2026

Annual Report on Remuneration

Element FY26 FY27

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.

Post termination

restrictions

Non-compete for six months following termination

(reduced by any period of garden leave).

No change.

Notice period 9 months. No change.

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 2026 (FY26) and the prior year:

Financial year Salary Benefits

Pension

Earned Bonus

Restricted

Share value

SAYE value

Total

remuneration

Total fixed

remuneration

Total variable

remuneration

Darcy Willson-Rymer FY26 491,400 23,000 13,313 – 396,214 – 923,927 527,713 396,214

FY25 488,250 23,000 13,313 231,757 769,334 770 1,526,424 524,563 1,001,861

Matthias Seeger FY26 364,780 7,000 10,756 – 247,970 1,334 631,840 382,536 249,304

FY25 356,500 7,000 10,508 135,375 – 770 510,153 374,008 136,145

1. Benefits comprise all taxable benefits which are either a car allowance or a contribution to family private medical insurance.

2. Pension benefit comprises payments to a stakeholder pension scheme (defined contribution) or a cash payment in lieu of pension contributions.

3. See details of FY26 bonus payments in the Remuneration Committee Chair’s letter and below. Although performance during FY26 resulted in an entitlement to 19% of maximum bonus award, the Committee exercised discretion to reduce this

bonus to nil.

4. The restricted share value for FY26 is based on the average share price over the three-month period to 31 January 2026 (81.88 pence), as the RSP award granted in 2023, with an underpin assessment period that ended on 31 January 2026,

will be capable of vesting from 24 May 2026. The value includes a dividend equivalent of 10.6 pence per share which has accrued on these awards as at 31 January 2026. Further dividend equivalents may accrue on these shares in respect of

dividends to be paid before allotment of shares to satisfy these awards. The £396,214 restricted shares value for Darcy Willson-Rymer for FY26, is £62,637 below the value of the award at grant due to a reduction in the value of the shares

compared to the value at grant. The £247,970 restricted shares value for Matthias Seeger for FY26, is £39,201 below the value of the award at grant due to a reduction in the value of the shares compared to the value at grant. As such, no part

of the award values is attributed to share price appreciation. The restricted share value for FY25 reflect the value of the entire RSP award granted in 2023, applying the value of the shares on vesting (i.e. 92.9077 pence per share), using the sale

price per share arising from the sale of shares to fund the tax and national insurance arising on vesting of the first tranche of this award, plus 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 (however, in respect of shares not yet vested, as awards will be satisfied by treasury shares, this nominal bonus will not be paid) and a dividend equivalent of 5.7 pence per share that accrued on

these shares based on dividends declared from the date of grant to 31 January 2025. Further dividend equivalents have accrued on these shares in respect of dividends to be paid before allotment of the shares to satisfy these awards. Of the

£769,334 restricted shares value for Darcy Willson-Rymer for FY25, £318,723 is attributable to share price growth since the date of grant.

5. Embedded value of SAYE options at grant (i.e. the value of the discount). There are no performance conditions.

Strategic Report Governance Financial Statements

109

Company Information

Annual bonus payments and link to performance

Bonus opportunities for FY26 were 125% of salary for Darcy Willson-Rymer and 100% of salary for Matthias Seeger. The bonus was subject to achieving financial 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 earned for FY26 was 19% of maximum

under the formulaic outcome. However, on the basis of (a) the shareholder experience during the year, which included a material downgrade in performance that was announced in December

2025, which impacted on share price; and (b) the colleague bonus plan (which is primarily based on Adjusted PBT) would have resulted in no bonus award to wider colleague participants, the

Committee exercised discretion to reduce the annual Executive bonus award from the formulaic result, to nil. This resulted in no bonus payments for the CEO and CFO.

Financial targets (70% of total bonus opportunity)

PBT (60% 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 68).

Performance level

FY26

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 £67.45m 15%

Target £71.0m 50% £56.0m nil of 60%

Maximum £74.55m 100%

Cash flow productivity (10% of bonus opportunity) – audited

The cash flow productivity targets for the year and actual performance achieved are as set out in the table below. Cash flow productivity is free cash flow as a percentage of Adjusted PBT

(seeglossary on pages 178 to 181).

Performance level

FY26

cash flow productivity

Percentage of total cash

flow productivity bonus pool

available if performance

level achieved

Cash flow

productivity realised

(after adjustments)

Percentage of total

bonus pool payable

(% of maximum)

Threshold 54% 15%

10% of 10%

(nil paid)

Target 60% 50% 73%

Maximum 66% 100%

ANNUAL REPORT ON REMUNERATION CONTINUED

110

Card Factory plc Annual Report and Accounts 2026

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 9% 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 £8.050m.

Target: cardfactory.co.uk sales to achieve £8.945m.

Stretch: cardfactory.co.uk sales to achieve £9.839m.

£7.306m nil of 10%

Wholesale partnership sales

(including Garven, Garlanna

andSAGreetings)

Development of wholesale partnerships is a key growth

sales channel.

Threshold: wholesale partner sales of £44.825m.

Target: wholesale partner sales of £49.805m.

Stretch: wholesale partner sales of £54.786m.

£43.977m nil of 10%

Net new stores Increase of UK & Republic of Ireland stores align with

convenience for the customer.

Threshold: +21 net new stores.

Target: +23 net new stores.

Stretch: +28 net new stores.

+27 9% of 10%

(nil paid)

Grants of Restricted Shares FY26 – audited

Conditional awards of Restricted Shares were granted to the Executive Directors on 22 May

2025. 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

Shares 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 445,878 87.5% £429,975 1.2.25–31.1.28

Matthias Seeger 284,634 75% £274,482 1.2.25–31.1.28

1. Based on the average share price for the three trading days to, and including, 21 May 2025 of 96.4333 pence.

For these Restricted Shares to vest, the Committee must be satisfied that business performance

over the three years commencing 1 February 2025 is robust and sustainable, that the business

improved its impact on society and the environment and that management action 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, and has discretion to override a formulaic outcome, which it

considers to be inappropriate. There will be full disclosure in the Annual Report & Accounts

ofthe Committee’s determination of this ‘performance underpin’ at the time ofvesting.

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.

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, which gave the Committee discretion to reduce

the earned bonus by up to 10% if it considered there has not been sufficient progress in

delivering the ESG strategy (taking account of the matters set out on page 98, which are also to

be adopted for the FY27 annual bonus plan).

The Committee were satisfied that the ESG underpin had been achieved, however, they

resolved to exercise discretion to reduce the annual bonus award to the Executive Directors

from 19% of maximum, to nil. Although the strategic target of net new stores opened resulted in

near-maximum achievement of 27 net new stores (34 new stores, less 7 closures and

9 relocations), and the cash flow productivity realised 73% (above the stretch target of 66%),

the Committee resolved not to pay any bonus based on these metrics alone, having considered

that the threshold performance for the other financial and strategic measures were not

achieved; that shareholders investment values were adversely affected from the downgrade

following the December 2025 trading update, and on the basis the colleague bonus plan

(whichis primarily based on Adjusted PBT), would have resulted in no bonus award to wider

colleague participants.

Strategic Report Governance Financial Statements

111

Company Information

2023 LTIP Restricted Share award vesting – audited

Restricted Share awards granted in May 2023 are scheduled to vest from 24 May 2026,

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 2023 to

31 January 2026. 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 the performance criteria had been achieved for the majority

of the three financial year performance period, before the financial performance in the latter

part of FY26 impacted this progress. Much of the final year underperformance was considered

to have been realised as a result of market challenges, rather than due to management failure

(for which the performance underpin is primarily designed to avoid unjust reward).

The Committee were satisfied that the business improved its impact on society and the

environment over the performance period, which included development and launch of the

‘Delivering a Sustainable Future’ strategy in FY24, setting of Net Zero targets and ongoing

activity to reduce packaging, increasing the range of products that are recyclable, activity to

reduce emissions intensity, measurement and reporting of Scope 3 emissions and a significant

23% reduction in the emissions intensity ratio in FY26 (see pages 36 to 55).

Value of £100 invested from 1 February 2023 to 31 January 2026

100

120

140

30 Apr

2023

1 Feb

2023

31 Jul

2023

31 Oct

2023

31 Jan

2024

30 Apr

2024

31 Jul

2024

31 Oct

2024

31 Jan

2025

30 Apr

2025

31 Jul

2025

31 Oct

2025

31 Jan

2026

Card Factory FTSE 250 FTSE SmallCap

The Committee also noted:

• the sustained sales growth over the period, supported by acquisitions, with PBT being

marginally positive CAGR, subject to a material reduction in the final financial year;

• sustained action to address material inflation over the period, with an ongoing programme

to realise efficiencies to offset cost increases, alongside improvement in the cash flow

management and leverage, notwithstanding acquisitions, shareholder returns and share

buybacks; and

ANNUAL REPORT ON REMUNERATION CONTINUED

• 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.

The Committee noted that, if the awards were permitted to vest in full, the value of the

awards reflected the lower share value on vesting, compared to the value at grant, which was

proportionate with the underperformance for part of the performance period. The Committee

was mindful of the shareholder experience whilst also recognising the need to incentivise and

retain senior management, in the long-term interests of the Company and its stakeholders.

On this basis the Committee was comfortable that the award should vest in full. Therefore,

theCommittee resolved to approve vesting of the 2023 RSP awards and determined that it

wasnot necessary to exercise any discretion in respect of the awards.

Malus and clawback

Malus and clawback provisions apply to the annual bonus and Restricted Shares. The

circumstances in which these provisions may be applied are set out on pages 101 and 102.

The clawback period extends for two years following the payment of bonuses or the vesting of

Restricted Share awards. This timeframe aligns with the two-year holding period that applies

to vested Restricted Shares, and is considered to provide sufficient time for any relevant

circumstances or events to come to light. No malus or clawback was applied in FY26.

SAYE – audited

Awards under the HMRC-approved SAYE plan were granted to all participating employees on

16 June 2025 and are exercisable from 1 August 2028. Options were granted at a discount of

20% to the share price immediately prior to invitations to apply for awards were issued, and

vest after three years subject to continued employment.

Executive Director

Number of

SAYE options

awarded

Face/maximum

value of awards at

grant date

Fair value of

awards at

grantdate

% of award

vesting

at threshold

Performance

period

Darcy Willson-Rymer nil nil nil n/a n/a

Matthias Seeger 6,916 £6,669 £1,333 n/a n/a

1. Face 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, 22 May 2025 (the date on which invitations to apply for SAYE awards),

of96.4333 pence.

2. Fair value is the aggregate discount applied, based on the exercise price of 77.15 pence per share, compared to the

aggregate value of the award adopted for the issue of invitations to apply for SAYE awards.

112

Card Factory plc Annual Report and Accounts 2026

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 2026 and the prior year.

Base fee paid Additional fees Gross-up of taxable expenses

Total

Non-Executive Director FY26 FY25 FY26 FY25 FY26 FY25 FY26 FY25

Paul Moody (Chair) £185,033 £180,833 – – £0 – £185,033 £180,833

Pam Powell (SID)

£52,867 £31,637 £10,400 £6,203 £1,112 – £64,379 £37,840

Rob McWilliam £52,867 £51,667 £10,400 £10,333 £400 – £63,667 £62,000

Indira Thambiah £52,867 £51,667 £10,400 £10,333 £172 – £63,439 £62,000

1. Pam Powell was appointed on 21 June 2024.

2. From FY26, the Company commenced gross up of taxable expenses incurred by Non-Executive Directors.

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 (see right) illustrates the Total Shareholder Return (TSR) of Card Factory plc against

the FTSE 250 Index and FTSE Small Cap Index over the ten-year period to 31 January 2026.

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 January 2016 to 31 January 2026

100

150

200

250

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

31 Jan

2026

Card Factory FTSE 250 FTSE SmallCap

CEO

2025/26

(FY26)

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)

Single figure of remuneration (£’000) 924 1,532 1,525 943 829 525 593 611 496 1,005

Annual bonus outcome (% of max) – 37.7% 82.5% 80% 66% – 10% 15% – 20%

LTIP vesting

(% of max) 100% 100% 100% n/a n/a 50% – – n/a 46.6%

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.

Strategic Report Governance Financial Statements

113

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:

Executive Directors

Year-on-year change %

Average

employee

Darcy

Willson-Rymer

Matthias

Seeger

Paul

Moody

Pam

Powell

Rob

McWilliam

Indira

Thambiah

FY26 compared to FY25

Salary/Fees 8.45% 0.65% 2.32% 2.3% 2.0% 2.0% 2.0%

Bonus -1.04% -100% -100% n/a n/a n/a n/a

Benefits

11.84% -46.36% 1361% n/a n/a n/a n/a

FY25 compared to FY24

Salary/Fees 10.85% 0.46% 4 8.16% 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% – – -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 –

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 were restated in the FY25 annual remuneration report, 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. Benefits includes all income in the single figure tables excluding salary/fees and bonus.

ANNUAL REPORT ON REMUNERATION CONTINUED

114

Card Factory plc Annual Report and Accounts 2026

CEO to employee pay ratio

FY26 Method

25th percentile

pay ratio

Median

pay ratio

75th percentile

pay ratio

Ratio Option A 34.2 : 1 33.7 : 1 32.8 : 1

Employee salary £26,984 £26,984 £ 27,603

Employee total remuneration £27,150 £27, 493 £28,243

FY25 ratio Option A 61.4 : 1 60.8 : 1 59.2 : 1

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 FY26 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 pay data as at 31 January 2026 was

used in the FY26 CEO pay ratio calculations.

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 90% 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 CEO pay ratio has reduced significantly in FY26 compared with FY25 and FY24. The

reduction was primarily driven by a lower value from Restricted Share awards and the fact no

annual bonus award will be paid. Median colleague pay increased during the year, although

the rise in the National Minimum Wage (6.7% in FY26 versus 9.8% in FY25) moderated the

impact on median pay growth. Bonus outcomes for colleagues were also lower year-on-year,

reflecting business performance, while changes in benefits values were mainly driven by

RSP valuations and participation in SAYE schemes. Overall, the FY26 CEO pay ratio reflects a

material reduction in executive variable remuneration. When considered alongside median

colleague earnings growth, the FY26 ratio provides investors with a clear and balanced view of

pay outcomes across the organisation.

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.

Strategic Report Governance Financial Statements

115

Company Information

Distribution statement

The charts below illustrate the year-on-year change in total remuneration for all employees and total shareholder distributions, which include the share buyback commenced in FY26, to acquire

shares into treasury to satisfy employee share awards (TSD).

The total remuneration paid in respect of FY26 (as set out in note 5 to the Financial Statements, which form part of this report on page 152) was £185.0 million (FY25: £174.5 million).

ANNUAL REPORT ON REMUNERATION CONTINUED

200

£m Total remuneration

(up +6.0%)

140

120

100

160

180

2025/2026

£185.0m

£174.5m

2024/2025

£m Total shareholder distributions

(up +£5.4m)

2025/2026

£17.2m

£5.0m

£16.8m

2024/2025

Share buyback

Dividend

Statement of shareholder voting

The following table shows the results of the shareholder votes on the Annual Report on Remuneration at the 2025 AGM and for the Directors’ Remuneration Policy at the 2024 AGM:

Remuneration Policy 2024 Annual Report on Remuneration 2025

Total number

of votes

% of

votes cast

Total number

of votes

% of

votes cast

For (including discretionary) 201,895,508 96.00 204,710,238 90.41

Against 8,405,067 4.00 21,703,365 9.58

Total votes cast (excluding withheld votes) 210,300,575 – 226,413,603 –

Total votes withheld 125,220 – 179,066 –

Total votes cast (including withheld votes)

210,425,795 – 226,592,669 –

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.

116

Card Factory plc Annual Report and Accounts 2026

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 958,639 947,14 0 902,327 6,553 132.1% 250% No

Matthias Seeger 106,730 268,134 570,302 23,589 19.7% 200% No

Non-Executive Directors

Paul Moody 200,000 – – –

Pam Powell 9,875 – – –

Rob McWilliam 46,430 – – –

Indira Thambiah 7,500 – – –

1. Calculated in respect of shares ‘owned outright’, by applying the closing share price of the Company on 31 January 2026 of 67.7 pence and applying annual salary as at this date.

During the year, the RSP award granted to Darcy Willson-Rymer in 2022 in respect of 780,197 shares were approved for vesting, with 390,098 of these shares being allotted on 12 May 2025.

Darcy Willson-Rymer also exercised his option granted under the SAYE plan, to acquire 18,419 shares on 4 August 2025. Otherwise, no RSP awards or share options under the SAYE plan

were exercised by the Directors during FY26. 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 2023,

which includes RSP awards over 428,432 shares granted to Darcy-Willson Rymer and 268,134 shares awarded to Matthias Seeger, 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.

Strategic Report Governance Financial Statements

117

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 25.05.25 96.433p n/a 445,878 £429,975 01.02.25 – 31.01.28 n/a –

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 390,098

Restricted Shares

14.06.21 76.54p n/a 514,436 £393,750 01.02.21 – 31.01.24 n/a 385,827

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 –

Matthias Seeger

Restricted Shares 25.05.25 96.433p n/a 284.634 £274.482 01.02.25 – 31.01.28 n/a –

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 16.06.25 96.433p 77.15p 6,916 £1,333.9 – 01.08.28 – 31.01.29 –

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 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 awards

made in, or after, 2024, over the three days prior to the date of grant). Performance conditions and underpins for the Restricted Share awards granted in 2023 and 2025 are set out on pages 112 and 111, respectively. 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 2023 (see page 112, save for

the performance period (noted above). The Restricted Share awards made in 2022 are subject to the same performance conditions and underpin applicable to the awards made in 2023, save the performance period is 1 February 2022 to

31January 2025.

2. In respect of Restricted Share awards, a dividend equivalent is also paid in respect of dividends paid with a record date after the date of grant and before 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 (which is ascertained based on an average middle-market quotation prior to applications to participate in the SAYE are issued) and the

exercise price, across all shares under option.

ANNUAL REPORT ON REMUNERATION CONTINUED

118

Card Factory plc Annual Report and Accounts 2026

How the Policy will be applied in FY27

Salary

The Committee reviewed the annual salary for the senior management 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

4.4%. As a result, the Committee determined the CEO and the CFO would receive a salary increase of 3% for FY27 with increases taking effect on 1 April 2026.

The salaries of the Executive Directors with effect from 1 April 2026 are as follows:

Executive Director 1 April 2026 1 April 2025

Darcy Willson-Rymer £506,142 £491,400

Matthias Seeger £376,955 £365,976

Benefits and pension

These will be paid in line with the Policy.

Annual bonus

The annual bonus for FY27 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 FY26. 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 FY27, which are shared by all of the senior management team are as follows:

Objective Link to strategy Bonus potential (% of maximum bonus opportunity)

Financial objectives

70% total

PBT-based target Group financial performance and improvement in profitability. 60%

Free cash before distributions (£) Measure to ensure focus on converting profit into cash, to manage working capital and keep interest

costs low, to support availability of funds to make investment decisions in line with the strategic plans.

10%

Strategic objectives

30% total

Digital integration synergies Realisation of cost and revenue synergies on an annualised basis based on integration of the

cardfactory.co.uk and Funky Pigeon businesses to a single technology platform, including optimising

fulfilment between the Baildon and Guernsey fulfilment facilities.

10%

North America sales Development and growth of the Garven and cardfactory business in North America: a strategic

growthmarket.

10%

UK stores LFL growth Becoming a celebration business, which relies on growth in UK store sales, which includes

maintainingcard sales, while growing our gift and celebration essentials offering.

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 2027.

Strategic Report Governance Financial Statements

119

Company Information

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.

An ESG underpin will apply to the annual bonus award, 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 Officer and Chief Financial Officer, respectively,

subject to a performance underpin and the other terms described in the Remuneration

Policy and under the LTIP Scheme Rules. Any awards are proposed to be granted following

publication of the preliminary results for FY26.

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 action 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 & Accounts, at the time of vesting, of the

Committee’s determination of the performance underpin and any adjustment in the event the

Committee seeks to address any windfall gains.

ANNUAL REPORT ON REMUNERATION CONTINUED

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 97), with any changes to take effect

from 1 April 2026. Following a review of market data, the Chair’s fee and the NED base fee

will be increased by 3%, while 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 2026

From

1 April 2025

Base fees

Chair £191,209 £185,640

Senior Independent Director £65,032 £63,440

Non-Executive Director £54,632 £53,040

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 on page 96. 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 adviser in 2023, who were appointed by the Committee

following a tender process. Deloitte LLP provide other services to the Group, including

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: www.remunerationconsultantsgroup.com. Accordingly,

the Committee is satisfied that the advice received is objective and independent. During

the financial year to 31 January 2026, fees of £25,900 (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.

120

Card Factory plc Annual Report and Accounts 2026

Committee activities

During FY26, 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 FY26, assess appropriateness of

thePolicy, and consider whether any updates would be appropriate.

• Consider performance against targets and resulting bonus payments for FY25 and

proposed bonus awards for FY26 and vesting of the 2022 and 2023 Restricted

Share awards.

• 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 FY26 annual executive bonus plan and to agree the measures and targets for the

FY27annual executive bonus.

• Consider and approve annual salary increases for the senior management team,

theCEOand the Chair, and the wider workforce salary and benefit reviews.

• 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.

The work of the Remuneration Committee

Set out as follows 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 100 to 107), 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

FY25 Directors’ Remuneration Report at the 2025 AGM received support from shareholders

holding 90.41% of the votes cast. The Committee Chair has also met a number of shareholders

over the year, with views and suggestions being provided on appetite and potential design of

hybrid long-term incentive arrangements.

The Committee will reflect these views during FY27 as it develops the remuneration policy

in the next triennial review to be proposed to shareholders in 2027. 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 (March 2025)

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 63. 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 pages 125

to 126) and our DE&I policy, which is summarised on page 122. The Committee has also

considered the Group’s wider review of remuneration across the entire workforce, which

includes grading of roles and benchmarking of remuneration and benefits associated with

each role and ensuring alignment on key benefits, including annual pay reviews and pensions

across all employees.

This report was reviewed and approved by the Remuneration Committee on 27 April 2026.

Indira Thambiah

Chair of the Remuneration Committee

28 April 2026

Strategic Report Governance Financial Statements

121

Company Information

We are committed to providing equal

opportunities for all our colleagues and

applicants 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 pages 60 to 62.

We published our latest Gender Pay Gap

Report in April 2026, which reports on

the gender pay gap as at 5 April 2025. A

copy of the report has been published

on cardfactory’s investor website

(cardfactoryinvestors.com).

During FY26, the Committee re-assessed

the skills and experience of the Board

members and consider this to be appropriate

for the Group’s operations and strategic

objectives, taking account of the size and

operations of the Group and the expertise

of its Directors. The Board recognise the

diversity of its membership, across a range

Paul Moody

Chair of the Nomination Committee

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.

Committee activity

The Committee’s main activity during the

year, and its plans for the year ahead, are

as described in more detail below.

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.

Committee’s role

andresponsibilities

• 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.

Terms of reference available at:

www.cardfactoryinvestors.com/investors/

corporate-governance.

Committee’s key actions in FY26

• Internally conducted Board performance

review, setting of Board objectives and

review 2025 objective performance.

• Review of Board and Committee skills,

knowledge and experience, concluding

no changes are required.

• Succession planning for the Board, the

senior management team and their

direct reports.

Number of meetings held

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 40%

women recommendation. The Board will

keep all aspects of experience and diversity

underreview.

Of the 28 UK direct reports to the executive

leadership team as at 31 January 2026,

43% (12 individuals) are women, 57% (16

individuals) are male. Of the entire UK &

Republic of Ireland workforce of 8,366 as at

31 January 2026, 81% (6,809 individuals) are

women and 19% (1,557 individuals) are male.

This data is collected from the candidates

during the recruitment process.

Through our ‘Count Me In’ campaign, 62%

of colleagues have now chosen to share

their diversity data, a significant increase

from 14% in October 2024. This richer and

more representative dataset is directly

informing the next phase of our DE&I

strategy, allowing us to focus investment and

leadership attention where it will make the

greatestdifference.

Committee members

Paul Moody (Chair)

Pam Powell

Rob McWilliam

Indira Thambiah

122

Card Factory plc Annual Report and Accounts 2026

Nomination Committee Report

Our latest data on gender and (for the Board and senior management team) ethnicity as at the reference date of 31 January 2026, is as follows, using data collected from candidates on recruitment:

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 66.7% 3 6 75%

Women 2 33.3% 1 2 25%

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

(excl. Board members)

Percentage of

executive management

(excl. Board members)

White British or other White (including minority-White groups) 5 80% 4 6 85.7%

Mixed/Multiple Ethnic Groups – – – – –

Asian/Asian British 1 20% – 1 14.3%

Black/African/Caribbean/Black British – – – – –

Other ethnic group, including Arab – – – – –

Not specified/prefer not to say – – – – –

Board performance review

The Company undertook an internally conducted Board performance review, which concluded in November 2025. Further details are set out in the Corporate Governance Report on page 84.

A Board performance review will continue to be conducted on an annual basis, with an externally facilitated review scheduled to be completed during the financial year to 31 January 2027.

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 25June 2026.

Paul Moody

Chair of the Nomination Committee

28 April 2026

Strategic Report Governance Financial Statements

123

Company Information

DIRECTORS’ REPORT

The Directors present their report together with the audited Financial Statements

for the year ended 31January2026.

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

2024 (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 & 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 Parent

Company Financial Statements on page 175.

Strategic Report

The Strategic Report, which was approved by the Board on 27 April 2026 and is set out on

pages 1 to 78, 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 (on pages 36 to 55)). Information about the Company’s business relationships and how

the Directors engage with suppliers, customers and other stakeholders and complied with

their duty under section 172(1) of the Companies Act 2026 are set out in the section 172(1)

statement on pages 56 to 63).

This Directors’ Report and the diversity data in the Nomination Committee 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.

No disclosures in respect of research and development or overseas branches of the Company

are made as these are not applicable to the Company.

Results and dividends

The consolidated profit for the Group for the year after taxation was £31.2 million (FY25:

£47.8 million). The results are discussed in greater detail in the CFO’s Report on pages 64 to 71.

The Directors propose a final dividend of 3.7 pence per share in respect of the period ended

31 January 2026, to be paid on 3 July2026 to shareholders on the register on the record date

of 29 May 2026, subject to shareholder approval at the AGM to be held on 25 June 2026 (FY25

final dividend: 3.6pence). An interim dividend of 1.3 pence was paid on 12 December 2025 to

members on the register on 7 November 2025 in respect of the period ended 31 January 2026

(FY25: 1.2 pence).

Post-year-end events

There have been no significant post-year-end events. As assessed in note 1 we consider that

the current conflict in the Middle East represents a non-adjusting post-year-end event.

Share capital, shareholders and restrictions on transfers of shares

The Company has only one class of shares: ordinary shares of 1 pence each. During FY26, the

Company appointed UBS AG London Branch, to effect market purchases of the Company’s

shares, such shares to be held in treasury and applied to satisfy employee share awards. In

aggregate, 5,795,654 shares were purchased into treasury (comprising 1.64% of the issued

share capital as at 31 January 2026) for an aggregate purchase price of £5 million. The

Company sold 28,730 of these shares from treasury during FY26, for a total consideration of

£14,037 by way of satisfaction of awards under the Company’s Save As You Earn plan.

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 pages 162 to 163. Since the end of the FY26 financial year, to 27 April 2026

(being the latest practicable date prior to publication of this report), the Company transferred

48,923 shares from treasury to satisfy Restricted Share awards granted and vesting under

the Company’s LTIP scheme. Save for this transfer, no additional shares have been issued or

transferred or sold from treasury 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 27 April

2026 (being the latest practical date before publication of this report) is 351,595,922.

In aggregate, 5,717,911 shares were held in treasury on 27 April 2026, consequently the total

voting right as at 27April 2026 was 345,878,011.

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 pages 168 to 169. Details of the

share-based incentive schemes in place are provided in the Directors’ Remuneration Report

on page 102. Awards granted under the share-based incentive schemes are to be satisfied on

vesting or exercise by the transfer or sale of shares held in treasury.

124

Card Factory plc Annual Report and Accounts 2026

Directors’ Report

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 (See

Reports & Presentations/2021).

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 Annual General

Meeting (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 subject to proxy votes being received by the registrar

at least 48 hours before the scheduled start of the meeting. No shareholder holds ordinary

shares carrying special rights relating to the control of the Company.

Substantial shareholders

At each of 31 January 2026 (financial year-end) and 27 April 2026 (latest practicable date on

publication of this report) the following had notified the Company on form TR1 of a disclosable

interest of 3% or more of the total voting rights attaching to the Company’s ordinary shares:

Shareholder

No. of ordinary shares

held on 31 January 2026

(and percentage holding,

ifdifferent)

No. of

ordinary shares held

on 27 April 2026

Percentage

of total voting

rights

Aberforth Partners LLP 22,753,964 (6.58%) 34,836,846 10.07%

BBFIT Investments Pte Ltd 28,347,748 28,347,748 8.20%

Artemis Investment Management LLP 21,321,856 21,321,856 6.17%

JP Morgan Asset Management 18,650,368 18,650,368 5.39%

Majedie Asset Management Limited 16,819,832 16,819,832 4.86%

The Wellcome Trust 14,187,012 (4.10%) 17,365,503 5.02%

Jupiter Asset Management 10,950,000 10,950,000 3.17%

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 169 of the Annual Report & Accounts.

Directors

The Directors of the Company and their biographies are set out on pages 82 and 83. There

were no changes to the Board during the period. Details of how Directors are appointed

and/or removed are set out in the Corporate Governance Report on page 88.

Powers of Directors and authority to purchase own shares

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 88.

As at 31 January 2026, the Directors had shareholder authority, granted at the AGM in 2025,

to effect a purchase by the Company of up to 34,802,749 of its own shares. The Company

utilised part of this authority to purchase 5,795,564 shares between 30 October 2025 and

19 December 2025, such shares being held in treasury to be used to satisfy awards under

employee share plans. Consequently, as at 31 January 2026, the Directors had a remaining

authority to purchase up to 29,007,185 shares.

The authority to purchase own shares is proposed to be renewed at the AGM to be held in 2026.

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 88.

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 60, 61 and 87. Share incentive schemes in which employees participate are described

in the Directors’ Remuneration Report on page 102 and in note 25 to the Financial Statements

on pages 168 to 169. The Directors reaffirm cardfactory’s commitment to diversity, equality

and inclusion, recognising this as fundamental to an effective culture aligned to our purpose,

values and long-term sustainable success.

We are committed to maintaining a working environment that promotes fairness, dignity and

respect, and is free from bullying, harassment, victimisation and discrimination. The Group

has a comprehensive range of people policies, designed to support these aims, to support

these open, fair and merit-based employment practices, under a transparent framework

that supports compliance with legal and regulatory requirements. Some key policies address

family leave, grievance, equal opportunities and disciplinary procedures, alongside associated

colleague and manager training.

Strategic Report Governance Financial Statements

125

Company Information

Cardfactory’s commitment to diversity 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.

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 165 to 167. These risks are managed in accordance with the risk

management framework described on pages 72 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 pages 64 to 71.

Tax

The Group pays corporation tax on its operations in the jurisdiction in which those operations

are domiciled for tax purposes. The majority of corporation tax is paid in the United Kingdom.

The Group 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).

Disclosures required under Listing Rule 6.6.1 R

In accordance with Listing Rule 6.6.4 R, the only applicable information required to be disclosed

in the Annual Report by Listing Rule 6.6.1 R is set out below. There are no disclosures in respect

of each other provision required by Listing Rule 6.6.1 R:

Disclosure Cross reference

Details of any long-term incentive schemes required

by Listing Rule 9.3.3 R. R3

Page 102

Details of cash allotments of shares by Card Factory plc

or any major subsidiary undertaking, during FY26.

R6 R7

See note 7 to the notes to the

Parent Company Financial

Statements on page 176

DIRECTORS’ REPORT CONTINUED

Disclosure required under Disclosure Guidance and Transparency Rule

7 (CorporateGovernance)

The Corporate Governance Report on pages 84 to 89 contains disclosures required under

Disclosure Guidance and Transparency Rules 7.2.2, to 7.2.7, which form part of this

Directors’Report.

Greenhouse gas emissions and reporting aligned with TCFD

recommendations and recommended disclosures

The TCFD Report on pages 44 to 55 sets out the greenhouse gas emissions disclosures on

page 54.

For the purpose of 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 page44.

The Company continues to enhance the completeness and quality of its climate-related

financial disclosures. While the majority of TCFD recommendations have been met, the

recommended disclosure in respect of Scope 3 greenhouse gas emissions has not yet been

fully met as full Scope 3 greenhouse gas emissions are not yet included, nor is any emission

data for Funky Pigeon (acquired in August 2025). Work is underway to integrate emissions data

from Funky Pigeon and to complete the associated re-baselining exercise during FY26, with

expanded Scope 3 disclosures expected to be included in the next Annual Report & Accounts.

The greenhouse gas emissions reported in this Annual Report are aligned with the

requirements of the Streamlined Energy and Carbon Reporting (SECR) framework.

126

Card Factory plc Annual Report and Accounts 2026

In assessing viability, the Board has considered a variety of downside scenarios arising

from the Group’s principal risks and uncertainties (see pages 74 to 77). These downside

risks included severe, but plausible, scenarios with the ability to reduce the Group’s

sales, profitability and cash flow over sustained periods for a period greater than six

months. Reverse stress test scenarios were also considered for 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, despite a deterioration in trading

performance in FY26, the level of headroom available was higher than in the previous year,

in substantial part due to the extension of the Group’s revolving credit facility to £160 million

during the year, to assist with the funding of the acquisition of Funky Pigeon.

While 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.

The Directors consider that the scenarios assessed were sufficient to cover a range of

reasonably foreseeable outcomes as a result of current macro-economic and geopolitical

volatility, which has accompanied military interventions in the Middle East since the balance

sheet date. While outcomes are uncertain and depend upon the duration and severity of the

ongoing situation, the Directors are confident that the Group is well placed to navigate the

current environment.

In addition, the Board noted that the Group has further, uncommitted facilities available

within its existing financing arrangements and, while the availability of such facilities is subject

to lender approval, 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.

While 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2031.

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 and the assessment undertaken, is provided in

note 1 to the Consolidated Financial Statements on pages 144 to 145.

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 73 to 77.

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 2031 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. The Group’s

financing facilities expire within the five-year-window and would likely require extension or

renewal in order for the Group to operate within the parameters of its current capital allocation

policy for the duration of this period. The Board currently has no reason to believe that the

Group’s existing facilities would not be extended, renewed or replaced at on-market terms at

therelevant time.

It is expected that mitigating actions would be available to the Group, such as amending capital

investment plans or prioritising free cash generation and retention, if this assumption turned out

to be incorrect.

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 FY26 which, despite the downturn in UK Stores performance, remained significantly

profitable and cash generative. The Plan assumes a conservative model of sales growth across

the five-year horizon, and reflects delivery of key strategic projects to support growth in digital

and wholesale partnerships. In addition, the Plan includes expected cost headwinds arising,

in particular, from wage inflation, higher national insurance contributions, changes in market

prices that may become applicable at the end of the Group’s existing hedging arrangements,

and the 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 current

bankingfacilities.

Strategic Report Governance Financial Statements

127

Company Information

Assumption Assumption limitations

Available funding

The strategic plan was developed assuming

that the covenants and headroom under

the current facilities available in the

current 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.

Assuming all surplus free cash is retained,

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. Recent capital

investment has been at the lower end of

the Group’s guidance of £20–25 million

per annum. We expect higher investment

in FY27 as we expand our manufacturing

capabilities and deliver the target future

operating model for our Digital business.

Beyond FY27, investment is expected to

remain within the guidance range 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. The Plan incorporates

the recently approved final dividend in

respect of FY26, and reflects our expectation

to pay a sustainable, progressive dividend

annuallythereafter.

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.

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 2026 and concluded that the external

auditor was in all respects effective, as explained on page 94. 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 & 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 & Accounts should be construed as a profitforecast.

AGM

The AGM of the Company will be held at 11.00am on 25 June 2026 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 & 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, the Corporate Governance Report and this Directors’ Report were

approved by the Board on 27 April 2026.

Ciaran Stone

Company Secretary

28 April 2026

DIRECTORS’ REPORT CONTINUED

128

Card Factory plc Annual Report and Accounts 2026

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 & 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 & 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

28 April 2026

Matthias Seeger

Chief Financial Officer

28 April 2026

Strategic Report Governance Financial Statements

129

Company Information

Statement of Directors’ Responsibilities

Financial

Statements

131 Independent auditor’s report

138 Consolidated income statement

138 Consolidated statement of comprehensive income

139 Consolidated statement of financial position

140 Consolidated statement of changes in equity

141 Consolidated cash flow statement

141 Notes to the Financial Statements

171 Parent Company statement of financial position

171 Parent Company statement of changes in equity

172 Parent Company cash flow statement

172 Notes to the Parent Company Financial Statements

Company Information

178 Glossary

182 Advisers and contacts

130

Card Factory plc Annual Report and Accounts 2026

Financial Statements

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CARD FACTORY PLC

Opinion

We have audited the financial statements of Card Factory plc (the ‘parent company’) and its

subsidiaries (the ‘group’) for the year ended 31 January 2026 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 31 January 2026 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 reviewing supporting and contradictory evidence in

relation to these key assumptions and assessing the directors’ consideration of severe but

plausible scenarios. This included assessing 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.

Strategic Report Governance Financial Statements

131

Company Information

Independent auditor’s report

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CARD FACTORY PLC CONTINUED

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 148 (accounting policy),

and page 159 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, and

operating effectiveness of key controls related to this

business process, including testing of the data inputs

into the controls.

• Attending a sample of physical inventory count,

observing management’s count procedures and

performing independent test counts, and rolling

back to managements count date where needed

using sales data which we have tested back to

supportinginformation.

• 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 performing analytical

procedures over the value of stock movements.

• Performing analytical procedures over stores we did

not attend, and any seasonal balances not tested to

identify any risk of material misstatements that may

exist in the untested population.

• 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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Card Factory plc Annual Report and Accounts 2026

Key audit matter How our scope addressed this matter

Inventory valuation

Refer to page 142 (key sources of

estimation uncertainty, page 148

(accounting policy), and page 159

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.

• Challenging management on the appropriateness

of the sell-through provisioning methodology in

the context of wider stock destruction plans, and

considering if sell-through informed the most

appropriate estimate in these circumstances.

• 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 171 (accounting policy),

and page 172 financial disclosures.

The parent company holds a

material investment in subsidiaries

of £316.2m at 31 January 2026.

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.

• Inspecting and performing our own independent

recalculation of the impairment model.

• Considering the results of our stress tests on

Goodwill impairment reviews on the recoverability of

the investment.

• Engaging our internal Valuations experts to opine on

the appropriateness of the discount rates used in the

impairment review.

Our observations

The results of our procedures were satisfactory with

no matters to report to the Audit and Risk Committee.

Strategic Report Governance Financial Statements

133

Company Information

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CARD FACTORY PLC CONTINUED

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 £2.2m

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 £1.4m, which represents

63% of overall materiality. In determining performance

materiality, we considered the history of misstatements

detected in previous periods and the effectiveness of the

control environment.

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

allocatedmateriality).

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 £0.55m. This is capped at

component allocated 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, 2 components were subject

to the audit of one or more balances and/or class of transactions by an overseas component

auditor within Forvis Mazars.

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Card Factory plc Annual Report and Accounts 2026

The 2 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.

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.

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 96% 97% 97%

Audit procedures over one or more account

balances and/or disclosures 3% 3% 3%

Out of scope entities contribute in aggregate, less than 1% of all applicable benchmarks.

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.

Strategic Report Governance Financial Statements

135

Company Information

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CARD FACTORY PLC CONTINUED

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 127;

• Directors’ explanation as to its assessment of the entity’s prospects, the period this

assessment covers and why the period is appropriate, set out on page 127;

• Directors’ statement on fair, balanced and understandable, set out on page 129;

• Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks, set out on page 127;

• The section of the annual report that describes the review of effectiveness of risk

management and internal control systems, set out on pages 88 to 89; and

• The section describing the work of the audit committee, set out on pages 94 to 95.

Responsibilities of Directors

As explained more fully in the directors’ responsibilities statement set out on page 129, 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;

• 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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Card Factory plc Annual Report and Accounts 2026

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, 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 3 years, covering the years ending 31 January 2024 to 31 January 2026.

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.

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

28 April 2026

Strategic Report Governance Financial Statements

137

Company Information

CONSOLIDATED INCOME STATEMENT

For the year ended 31 January 2026

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 January 2026

		2026	2025
	Note	£m	£m
Revenue	2	58 2 .7	5 42. 5
Cost of sales		(394.0)	(3 4 8 .7)
Gross profit		188 . 7	19 3 . 8
Operating expenses	3	(12 9 . 3)	(114 . 5)
Operating profit	3	59. 4	79. 3
Finance income	6	0.3	0. 2
Finance expense	6	(15 . 8)	(15 . 4)
Profit before tax		43.9	6 4 .1
Taxation	7	(12 . 7)	(16 . 3)
Profit for the year		31. 2	4 7. 8
Earnings per share		Pence	Pence
– Basic	9	9.0	13 . 8
– Diluted	9	8.9	13 . 7

All activities relate to continuing operations.

Management assess the underlying performance of the Group based on the Adjusted Profit

Before Tax of £56.0 million in FY26 (FY25: £66.0 million). After tax, this gives Adjusted Earnings

Per Share of 11.8 pence (FY25: 14.3 pence). See the glossary on pages 178 to 181, which

provide detailed reconciliations for all Alternative Performance Measures.

		2026	2025
	Note	£m	£m
Profit for the year		31. 2	4 7. 8
Items that may be recycled subsequently into profit
or loss:
Exchange differences on translation of foreignoperations		(0 . 3)	(0 . 2)
Cash flow hedges – changes in fair value	24	(5 . 9)	1. 4
Cost of hedging reserve – changes in fair value	24	(0.7)	(0 .1)
Tax relating to components of other comprehensiveincome	13	1.7	(0. 4)
Other comprehensive income for the period, net of income tax		(5 . 2)	0.7
Total comprehensive income for the period
attributable to equity shareholders of the parent		26.0	4 8.5

138

Card Factory plc Annual Report and Accounts 2026

Consolidated statement of comprehensive incomeConsolidated income statement

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 January 2026

		2026	2025
	Note	£m	£m
Non-current assets
Intangible assets	10	388 .8	356. 5
Property, plant and equipment	11	51.6	4 8 .7
Right-of-use assets	12	114 . 8	110 . 2
Deferred tax assets	13	0.9	0.6
Derivative financial instruments	24	0 .7	0 .9
		556.8	516 . 9
Current assets
Inventories	14	58.9	6 1 .1
Trade and other receivables	15	20.8	1 7. 0
Tax receivable		4 .6	1. 7
Derivative financial instruments	24	1.0	2.4
Cash at bank and in hand	16	18 . 8	16 . 5
		1 04. 1	9 8 .7
Total assets		660.9	615 . 6
Current liabilities
Borrowings	17	(1. 5)	(0 .1)
Lease liabilities	12	(32.8)	(2 1.7)
Trade and other payables	18	(7 3 .9)	(76 . 8)
Provisions	22	(3 . 3)	(5. 4)
Derivative financial instruments	24	(4 . 9)	(0 . 3)
		(11 6 . 4)	(10 4 . 3)

		2026	2025
	Note	£m	£m
Non-current liabilities
Borrowings	17	(83.8)	(7 3 .9)
Lease liabilities	12	(9 0 .4)	(8 8 .7)
Deferred tax liabilities		(9. 9)	(1. 4)
Provisions	22	(2.5)	–
Derivative financial instruments	24	(3. 4)	(0. 4)
		(19 0 .0)	(16 4. 4)
Total liabilities		(3 0 6 .4)	(26 8 .7)
Net assets		354. 5	3 4 6 .9
Equity
Share capital	19	3. 5	3.5
Share premium	19	2 03.8	203. 2
Treasury shares	19	(5 .0)	–
Hedging reserve		(1. 8)	1. 0
Cost of hedging reserve		(0 .6)	(0 .1)
Reverse acquisition reserve		(0. 5)	(0. 5)
Merger reserve		2 .7	2 .7
Translation reserve		(0. 8)	(0.6)
Retained earnings		153 . 2	13 7.7
Equity attributable to equity holders of the parent		354. 5	3 4 6 .9

The Financial Statements on pages 138 to 170 were approved by the Board of Directors on

27 April 2026 and were signed on its behalf by

Matthias Seeger

Chief Financial Officer

Strategic Report Governance Financial Statements

139

Company Information

Consolidated statement of financial position

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 January 2026

			Treasury		Cost of	Reverse
	Share	Share	share	Hedging	hedging	acquisition	Merger	Translation	Retained	Total
	capital	premium	reserve	reserve	reserve	reserve	reserve	reserve	earnings	equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
At 31 January 2024	3.5	202 .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	4 8.5
Hedging gains/(losses) 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)	–	–	–	–	–	–	–	–	(2 0. 3)	(20 . 3)
Total contributions by and distributions to owners	–	0. 5	–	–	–	–	–	–	(18 . 0)	(17. 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
Total comprehensive income for the period
Profit or loss	–	–	–	–	–	–	–	–	3 1. 2	31. 2
Other comprehensive income	–	–	–	(4 . 2)	(0. 5)	–	–	(0 . 2)	(0 . 3)	(5 . 2)
	–	–	–	(4 . 2)	(0. 5)	–	–	(0 . 2)	30.9	26 .0
Hedging gains/(losses) and costs of hedging transferred to the cost of inventory	–	–	–	1. 9	–	–	–	–	–	1.9
Deferred tax on transfers to inventory	–	–	–	(0 . 5)	–	–	–	–	–	(0. 5)
Deferred tax related to share-based payments	–	–	–	–	–	–	–	–	(0 .1)	(0 .1)
Transactions with owners, recorded directly in equity
Shares issued (note 19)	–	0.6	–	–	–	–	–	–	–	0.6
Treasury shares purchased (note 19)	–	–	(5. 0)	–	–	–	–	–	–	(5 .0)
Share-based payment charges (note 25)	–	–	–	–	–	–	–	–	2.2	2.2
Dividends (note 8) 1	–	–	–	–	–	–	–	–	(17. 5)	(17. 5)
Total contributions by and distributions to owners	–	0.6	(5 .0)	–	–	–	–	–	(15 . 3)	(19 .7)
At 31 January 2026	3.5	203 .8	(5. 0)	(1. 8)	(0 .6)	(0 . 5)	2 .7	(0 .8)	153 . 2	354.5

1. Dividends include £0 . 3 million of dividend equivalents payable on employee share awards.

140

Card Factory plc Annual Report and Accounts 2026

Consolidated statement of changes in equity

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 January 2026

NOTES TO THE FINANCIAL STATEMENTS

		2026	2025
	Note	£m	£m
Cash from operations	20	12 2 . 3	10 5 . 6
Corporation tax paid		(12 . 0)	(16 . 7)
Net cash inflow from operating activities		110 . 3	8 8 .9
Cash flows from investing activities
Interest received on bank deposits		0.3	0.2
Purchase of property, plant and equipment	11	(11 . 7)	(11. 4)
Purchase of intangible assets	10	(7. 7)	(7. 0)
Acquisition of subsidiaries net of cash acquired	29	(2 5 .7)	(22. 5)
Proceeds from disposal of fixed assets		–	0. 2
Net cash outflow from investing activities		(4 4 . 8)	(4 0 . 5)
Cash flows from financing activities
Interest paid on bank borrowings	6	(6 . 5)	(6. 4)
Proceeds from bank borrowings	21	2 38 .0	258.5
Repayment of bank borrowings	21	(2 2 8 . 2)	(2 28.5)
Other financing costs paid	6	(0 . 2)	(1. 6)
Shares issued under employee share schemes	25	0.6	0.5
Treasury shares purchased	19	(5 .0)	–
Payment of lease liabilities	21	(3 7. 0)	(3 7. 6)
Interest paid in respect of lease liabilities	21	(8 .7)	(8.0)
Dividends paid		(17. 2)	(19 . 8)
Net cash outflow from financing activities		(6 4 . 2)	(4 2 .9)
Impact of changes in foreign exchange rates		(0. 4)	(0 .1)
Net increase/(decrease) in cash and cash equivalents		0.9	5.4
Cash and cash equivalents at the beginning of theyear		16 . 5	11.1
Closing cash and cash equivalents	16	17. 4	16 . 5

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 Financial Statements.

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 £0.1 million. Foreign operations are included in

accordance with the policies set out within this note.

Throughout these Financial Statements, references to ‘FY26’ or columns headed ‘2026’ refer to

the financial year ended 31 January 2026, and references to ‘FY25’ refer to the financial year

ended 31 January 2025.

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 and applying 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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141

Company Information

Notes to the financial statementsConsolidated cash flow statement

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 across its stores,

distribution centres and online fulfilment centres. 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 products 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 ranges do not perform as anticipated. The amounts

provided are calculated by product line and are adjusted annually to reflect experience.

There were no changes to the Group’s inventory provisioning policy in FY26. In accordance

with that policy, the categorisation of inventory for provisioning purposes and the provision

rate applied to each category were reviewed and, where appropriate, updated based on the

latest available range plans, inventory holdings and sell-through data. These routine updates to

reflect experience have contributed to the increase in the value of the provision compared to

the prior year.

At the end of FY26, the total inventory provision was £10.6 million (FY25: £8.2 million). The

increase in the value of the provision year-on-year generally reflects movements in our current

merchandising plan compared with the prior year as the proportion of inventory considered

as unranged or discontinued has increased leading to an increase in the overall provision

rate. There is no material incremental impact on the inventory provision as a result of the

acquisition of Funky Pigeon.

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 calculating the provision. The provision applied is based

on the application of sell-through rates in the previous financial year. If the rates applied

were changed +/-5% this would cause a +/-£1.5 million movement in the overall value of

the provision.

Other sources of judgement and estimation uncertainty

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

The carrying amount of goodwill in the consolidated balance sheet totals £329.9 million, of

which £8.7 million is allocated entirely to the Garven CGU, £7.4 million is allocated entirely

to the Funky Pigeon CGU and £313.8 million is allocated in its entirety to the group of CGUs,

shared assets and functions that comprise the Group’s stores business.

In FY26, 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 any of the stores, Garven or Funky Pigeon CGUs.

The methodology and assumptions used are described in more detail in note 10.

Right-of-use assets and tangible assets

The Group considers individual stores to be the smallest group of assets that generate

independent cash inflows. The store portfolio is assessed for indicators of potential impairment,

or impairment reversal on a store-by-store basis.

Where an indicator was identified as at 31 January 2026, the Group conducted a store-level

impairment review covering the right-of-use assets and property, plant and equipment insofar

as they are directly attributable to those stores.

The Group estimates the value in use each store assessed using future cash flows derived

from the forecasts included in the Group’s latest approved budget, plus an allocation of shared

overheads based on a line-by-line analysis of those costs.

Intangible assets

Following the acquisition of Funky Pigeon in August 2025, the Group has reviewed the current

and likely future operating model of its digital business. Following a period of transition and

integration, it is expected that most of the existing intangible assets in the cardfactory online

CGU will become obsolete during the FY27 fiscal year. As a result, an impairment charge of

£3.2 million has been recognised during FY26, to write down these assets in full.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

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Card Factory plc Annual Report and Accounts 2026

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 goodwill impairment tests

in respect of the stores business, Garven and Funky Pigeon 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

an impairment charge.

Each of the impairment reviews performed includes an allocation of central overheads to

the relevant CGU or, where a reasonable or consistent allocation of such overheads cannot

be applied to a lower level, to a group of CGUs. The nature of the Group’s operations, with

centralised support resource for all business units and vertically integrated value chain, means

allocation of central overheads to CGUs inherently involves judgement.

The Group recorded a net impairment charge of £1.4 million in respect of stores, which is

comprised of £2.8 million of impairment charges and £1.4 million of impairment reversals.

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 charge to impairment on Right-of-use assets of £1.1 million and a net

charge to PPE of £0.3 million.

Central overheads are allocated to individual stores on a pro-rata basis applying appropriate

volumetric measures where it is considered the overhead is directly and necessarily incurred

in generating the returns from that store. We have reviewed the way that we allocate central

overheads in FY26 and updated the process to reflect the allocation of overheads that are

applied to the Group of CGUs comprising the whole stores business as a portfolio, where the

cost is indirectly attributable to running or supporting the store estate, but an allocation of

those costs to individual stores cannot be made on a reasonable and consistent basis.

The Group considered a range of feasible alternative allocations of central overhead based

on different scenarios and differing judgements regarding the allocation of specific cost

items. This analysis indicated a potential range of impairment charges between £0.6 million

and £2.7 million. The Group believes that the position adopted in the Financial Statements

represents a balanced view of central overheads that are necessarily incurred and can be

allocated to individual stores on a reasonable and consistent basis.

Having considered scenarios consistent with those reviewed in the goodwill impairment tests,

the Group is satisfied that there are no other reasonable changes in key assumptions that

would result in a material change in the impairment charge recorded for stores.

Identification and valuation of intangible assets arising on the acquisition of

Funky Pigeon

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.

As a result of the acquisition of Funkypigeon.com Limited (‘Funky Pigeon’) on 14 August 2025,

management consider that the intangible assets identified as part of the acquisition 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. In making 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.

The Group have recognised both goodwill and intangible assets associated with existing

customer relationships and branding of the acquired business. Management have engaged a

specialist to perform a valuation of the intangible assets using the Multi-Period Excess Earnings

Method (MPEEM) to determine the fair value of the customer relationships and the Relief from

Royalty Method (RFR) to determine the fair value of the brand acquired.

Both the MPEEM and RFR valuation methods relied on several key assumptions in reaching

a valuation for the customer relationships and branding. The MPEEM method used forecast

cash flows of the acquired business in order to generate the present value of future cash flows

which represents the fair value of the assets acquired. The key assumptions in the Customer

Relationship valuation include the growth rate of sales, the discount rate applied and the

retention rate of existing customer relationships. The RFR method values the brand using the

projected future revenues of the acquired business and applying a benchmarked royalty rate

to determine the fair value of the brand acquired.

Any adjustments to the valuations assessed would be a reclassification between goodwill and

intangible assets at the point of acquisition and any impact on the reported profit due to a

change in the amortisation is immaterial in FY26.

Climate change

The Group has reviewed the potential impact of climate change and environmental, social and

governance (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.

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143

Company Information

1 Accounting policies continued

Other sources of judgement and estimation uncertainty continued

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

12), going concern (note 1, below), and inventory provisions (impact of customer preferences

and ESG considerations on potential inventory obsolescence, note 14 and previous page) and

concluded in each case that there is no material impact in each area at 31 January 2026.

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 profitable and cash generative financial performance in the current

financial year in the face of significant external market pressures. 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.

In August 2025, the Group exercised £35 million of the Accordion option (which was subject to

lender approval) within our existing £125 million revolving credit facility, entered into in April

2024 (see note 17). This option, exercised to fund the acquisition of Funky Pigeon, extended

the available facility to £160 million. There was no change to the other key terms of the facility

as a result of this option being exercised.

The facilities had an initial maturity date of April 2028, which was extended to November 2028

on 13 October 2025. The facilities include £40 million of remaining 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%. The 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 Group has a further extension option, subject to lender approval, which would further

extend the term of the facilities to November 2029.

The Board believes that the updated facilities provide adequate headroom for the Group to

operate and execute its strategic plan. At 31 January 2026, Net Debt (excluding lease liabilities)

was £67.9 million and the Group had £73.7 million of available 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 as follows:

• 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, while 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 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 that could be taken to reduce discretionary costs as well as

timing of cash outflows, which could both 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 be unprecedented

for a period where stores are open and trading, this scenario also did not factor in any possible

mitigating actions that management could take. Accordingly, we consider that the chance of

such scenarios occurring are remote.

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 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, such as

closing stores to reduce costs as seen through the pandemic.

We are mindful of the macroeconomic uncertainty created by recent geopolitical developments

including the current conflict in the Middle East and have assessed incremental costs to date

into our plans for the coming financial year.

Based on these factors, the Board has a reasonable expectation that the Group has adequate

resources and sufficient loan facility headroom to continue to trade for the foreseeable future

and accordingly the accounts are prepared on a going concern basis.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

144

Card Factory plc Annual Report and Accounts 2026

Principal accounting policies

The principal accounting policies set out below have been applied consistently to all periods

presented in these consolidated Financial Statements.

New and amended accounting standards

The following new standards and amendments to IFRS were effective for the first time in the

current financial year:

• Amendments to IAS 21 – The effects of Changes in Foreign Exchange Rates.

New standards and amendments to existing standards effective in the period have not had a

material effect on the Group’s Financial Statements.

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 IFRS 9 and IFRS 7 regarding the classification and measurement of

financial instruments.

• Annual improvements to IFRS Accounting Standards – Volume 11.

• Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7).

• IFRS 18 – Presentation and Disclosures in Financial Statements.

• IFRS 19 Subsidiaries without Public Accountability: Disclosures.

IFRS 18 Presentation and Disclosure in Financial Statements was issued by the IASB in

April 2024. The standard is effective for annual reporting periods beginning on or after

1 January 2027, and also applies to comparative information. IFRS 18 will replace IAS

1 Presentation of Financial Statements and will impact on several aspects of Financial

Statements presentation and disclosure, particularly in the Consolidated Income Statement

and disclosure requirements for management-defined performance measures (MPMs)

within the Financial Statements (consistent with our current disclosure of Alternative

Performance Measures (APMs), although it is not expected to impact on the measurement of

financial information.

Certain amounts may be reclassified from cash and cash equivalents to other debtors as

a result of the amendments to IFRS 9 and IFRS 7, which could be material to the Financial

Statements, management will perform a full assessment prior to adoption.

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.

1. Effective for annual periods starting on or after 1 January 2025.

2. Effective for annual periods starting on or after 1 January 2026.

3. Effective for annual periods starting on or after 1 January 2027.

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. 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

Retail revenue

Group revenue is principally attributable to the retail sale of cards, gifts and celebration

essentials subject to a single performance obligation fulfilled by receipt of goods at the point

of payment with minimal returns and refunds. Revenue is recognised net of discounts and VAT

at the point of completing the physical sale in stores. Such revenue is allocated wholly to the

cardfactory stores operating segment as seen in note 2.

Digital revenue

Revenue from online sales is recognised net of VAT, net of discounts and incorporates postage

revenue received as part of the overall sales price. The delivery of goods to the customer is the

point when IFRS 15 ‘performance obligations’ are deemed to have been satisfied. Customers

may make advance payments in respect of goods or services to be provided in future periods.

Such amounts are deferred and only recognised as revenue when the goods or services are

delivered to the customer on subsequent orders.

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145

Company Information

1 Accounting policies continued

Revenue continued

Wholesale partnerships revenue

For the partnerships operating segment, revenue attributable to wholesale sales to business

customers is typically recognised at a point in time based on a single performance obligation

supplying standard Group products. The timing of the single performance obligation can vary

from contract to contract, including from the point of dispatch, (whether from a site controlled

by the Group, or from a third-party supplier), delivery to the customer’s site or in the case of

some retail partners, the point of sales to the end consumer. A right of return is not a separate

performance obligation and the Group recognises revenue net of estimated returns and net of

anticipated rebates. Payment terms for retail partners are typically 30–90 days from invoicing.

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 (see page 149).

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 five 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 translation reserve.

Transactions and balances

The Group has currency transactions in respect of inventory purchases and certain sales to

retail partners that are denominated in foreign currencies. 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.

Taxation

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 expected credit losses.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

146

Card Factory plc Annual Report and Accounts 2026

Irrecoverable amounts are based on historical experience and forward-looking information,

together with specific amounts that are not expected to be recovered. Using the simplified

approach we have assessed that irrecoverable debtors in the Group are not material.

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.

Non-derivative financial liabilities

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 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 reflec t

the updated cash flows and amends the effective interest rate from the modification date.

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. 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.

Strategic Report Governance Financial Statements

147

Company Information

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 fittings 3–10 years

• motor vehicles 4 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. Research expenditure is charged to the income statement in the year in which

it is incurred. Development expenditure is charged to the income statement in the year it is

incurred unless it meets the recognition criteria of IAS 38 Intangible Assets to be capitalised as

an intangible asset.

Following initial recognition of the development expenditure as an asset, the asset is carried

at cost less any accumulated amortisation and impairment losses. Amortisation begins

when development is complete and the asset is available for use. Capitalised software costs

comprise directly attributable expenditure, including internally capitalised staff costs and

external costs, incurred during the development phase.

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 – 10–15 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 (note 22).

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.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

148

Card Factory plc Annual Report and Accounts 2026

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.

Where the Group purchases its own shares, such shares are measured at cost (including

directly applicable transaction costs) and deducted from equity. Shares held in treasury are

presented in a separate treasury shares reserve until reissued or cancelled. Shares held in

treasury do not receive dividend payments and are excluded from the calculation of average

shares in issue for the purpose of calculating Earnings Per Share.

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 cardfactory Restricted Share Awards Scheme (RSA) (previously through the (LTIP))

and the cardfactory 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.

Strategic Report Governance Financial Statements

149

Company Information

1 Accounting policies continued

Leases continued

Accounting as a lessee continued

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.

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 while 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

The Group is organised into four main business areas, which meet the definition of an

operating segment under IFRS, those being cardfactory stores, digital, wholesale 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 sell greeting cards, celebration essentials, and gifts to consumers through

an extensive network of retail stores across high streets, retail parks and shopping centres

in the UK & the Republic of Ireland.

• Digital sells greeting cards, celebration essentials and gifts to consumers via its online

platforms. The digital business has operated cardfactory.co.uk throughout FY26 and FY25,

funkypigeon.com since 14 August 2025, and gettingpersonal.co.uk until its closure on

31 January 2025. This segment has been reflected in both FY26 and FY25.

• Wholesale partnerships represents the Group’s ‘B2B’ wholesale operations and sells

greeting cards, celebration essentials and gifts 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 digital businesses.

Following its acquisition on 14 August 2025, Funky Pigeon has been integrated into the

existing digital business, with a common management structure.

The Group acquired SA Greetings on 25 April 2023, Garlanna Holdings Limited on

4 September 2024 and Garven Holdings, LLC on 4 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 wholesale

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 glossary to these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

150

Card Factory plc Annual Report and Accounts 2026

Revenue and EBITDA for each segment, and a reconciliation to the consolidated operating

profit per the Financial Statements, is provided in the table below:

	2026	2025
	£m	£m
Revenue:
cardfactory stores	514.6	506.8
Digital	20.6	13.2
Wholesale partnerships	47.2	22.2
Other	0.3	0.3
Consolidated Group revenue	582.7	542.5
Of which derived from customers in the UK	522.9	509.8
Of which derived from customers overseas	59.8	32.7
EBITDA 1 :
cardfactory stores	118 .1	131.8
Digital	(3.5)	(6.3)
Wholesale partnerships	3.2	1.0
Other	(1.0)	1.0
Consolidated Group EBITDA 1	116.8	127. 5
Consolidated Group depreciation, amortisation & impairment	(58.1)	(48.1)
Consolidated Group gain on disposal	0.7	(0.1)
Consolidated Group Operating Profit	59.4	79.3

1. This is an Alternative Performance Measure not defined under IFRS.

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:

	2026	2025
	£m	£m
Revenue derived from customers in the UK	522.9	509.8
Revenue derived from customers overseas:
– South Africa	11.8	11.6
– Republic of Ireland	20.5	15.4
– United States of America	24.9	3.1
– Rest of the World	2.6	2.6
Consolidated revenue	582.7	542.5

Of the Group’s non-current assets, £16.1 million (2025: £9.6 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 £9.2 million as at

31 January 2026 (FY25: £6.4 million). Non-current assets related to wholesale operations are

£1.6 million in the Republic of Ireland (FY25: £0.2 million), £0.2 million in the United States

(FY25: £0.1 million) and are £5.0 million (FY25: £4.6 million) in South Africa.

Strategic Report Governance Financial Statements

151

Company Information

3 Operating profit

Operating profit is stated after charging/(crediting) the following items:

	2026	2025
	£m	£m
Staff costs (note 5)	185.0	174.5
Depreciation expense
– Owned fixed assets (note 11)	9.7	8.7
– Right-of-use assets (note 12)	37.3	36.3
Amortisation expense (note 10)	6.5	3.5
Net impairment charge/(reversal) of right-of-use assets (note 12)	1.1	(0.4)
Impairment of tangible assets (note 11)	0.3	–
Impairment of intangible assets (note 10)	3.2	–
(Profit)/loss on disposal of fixed assets (notes 11 and 12)	(0.7)	0.1
Impact of unrealised losses/(gains) on derivate contracts	4.7	(1.5)
Other foreign exchange losses	0.8	2.3

The total fees payable by the Group to Forvis Mazars LLP and their associates during the

period was as follows:

	2026	2025
	£000	£000
Audit of the consolidated and Company Financial Statements	91	77
Amounts receivable by the Company’s auditor and its associates
in respect of:
Audit of financial statements of subsidiaries of the Company	686	624
Audit-related assurance services	93	92
Total fees	870	793

4 EBITDA

EBITDA represents profit for the period before net finance expense, taxation, gains or losses

on disposal, depreciation, amortisation and impairment charge/reversals.

	2026	2025
	£m	£m
Operating profit	59.4	79.3
Depreciation, amortisation and impairment	58.1	4 8.1
(Gain)/loss on disposal	(0.7)	0.1
EBITDA 1	116.8	127. 5

1. This is an Alternative Performance Measure not defined under IFRS, which is defined and reconciled in the glossary

on pages 178 to 181.

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:

	2026	2025
	Number	Number
Management, administration and support functions	778	773
Retail and warehouse operations	9,171	9,748
	9,949	10,521

The aggregate payroll costs of all employees including Directors were as follows:

	2026	2025
	£m	£m
Employee wages and salaries	160.7	154.3
Equity-settled share-based payment expense	2.3	2.3
Social security costs	15.1	11.1
Defined contribution pension costs	2.5	2.3
Total employee costs	180.6	170.0
Agency labour costs	4.4	4.5
Total staff costs	185.0	174.5

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

152

Card Factory plc Annual Report and Accounts 2026

Key management personnel

The key management personnel of the Group comprise the Card Factory plc Board of Directors

and the Executive Board.

Key management personnel compensation is as follows:

	2026	2025
	£m	£m
Salaries and short-term benefits	6.4	7.9
Equity-settled share-based payment expense	2.0	2.0
Social security costs	0.9	1.1
Defined contribution pension costs	0.1	0.1
	9.4	11.1

Remuneration of Directors

	2026	2025
	£m	£m
Directors’ remuneration	1.1	1.3
Amounts receivable under long-term incentive schemes	0.4	0.8
Company contributions to defined contribution pension plans	–	–
	1.5	2.1

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 96 to 107. 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

	2026	2025
	£m	£m
Net finance expense
Interest on bank loans and overdrafts	6.5	6.4
Interest received	(0.3)	(0.2)
Other finance costs 1	0.6	1.0
Lease interest	8.7	8.0
	15.5	15.2

1. Other finance costs includes loan issue cost amortisation and other financing costs.

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 2026 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

	2026	2025
	£m	£m
Current tax charge/(credit)
Current year	13.0	16.5
Adjustments in respect of prior periods	(4.0)	(1.5)
Total current tax charge	9.0	15.0
Deferred tax charge/(credit)
Origination and reversal of temporary differences	(0.2)	(0.2)
Adjustments in respect of prior periods	3.9	1.5
Total deferred tax charge	3.7	1.3
Total income tax charge	12.7	16.3

Strategic Report Governance Financial Statements

153

Company Information

7 Taxation continued

The effective tax rate of 28.9% (2025: 25.4%) on the profit before taxation for the year is higher

than (2025: higher than) the average rate of corporation tax in the UK for the year of 25%

(2025: 25%) driven by expenses not deductible for tax purposes increasing in FY26, primarily as

a result of the annualisation of acquisition-related costs and the acquisition of Funky Pigeon.

The tax charge is reconciled to the standard rate of UK corporation tax as follows:

	2026	2025
	£m	£m
Profit Before Tax	43.9	64.1
Tax at the standard UK corporation tax rate of 25.0% (FY25:25.0%)	11.0	16.0
Tax effects of:
Expenses not deductible for tax purposes	2.2	0.5
Effects of timing differences	(0.3)	–
Adjustments in respect of prior periods	(0.1)	–
Effect of overseas tax rates	(0.1)	(0.2)
Total income tax charge	12.7	16.3

Total taxation recognised through the income statement, other comprehensive income and

through equity are as follows:

		2026			2025
	Current	Deferred	Total	Current	Deferred	Total
	£m	£m	£m	£m	£m	£m
Income statement	9.1	3.6	12.7	15.0	1.3	16.3
Other comprehensive income	–	(1.7)	(1.7)	–	0.4	0.4
Equity	–	0.6	0.6	–	0.1	0.1
Total tax	9.1	2.5	11.6	15.0	1.8	16.8

8 Dividends

On 27 June 2025, the Group paid a final dividend of 3.6 pence per share (totalling £12.6 million)

in respect of the FY25 financial year. This brought total dividends paid in respect of FY25 to

4.8 pence per share (totalling £16.8 million).

On 12 December 2025, the Group paid an interim dividend of 1.3 pence per share

(totalling £4.6 million) in respect of the FY26 financial year.

FY26 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

2026 of 3.7 pence per share, equivalent to approximately £13.0 million. The final dividend will

be payable to shareholders on the share register on 29 May 2026, with payments to be made

on 3 July 2026.

	Pence	2026	2025
Dividends paid in the year:	per share	£m	£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
Final dividend for the year ended 31 January 2025	3.6p	12.6	–
Interim dividend for the year ended 31 January 2026	1.3p	4.6	–
Total dividends paid to shareholders in the year		17.2	19.8

Dividend equivalents totalling £0.3 million (2025: £0.5 million) were accrued in the year in

relation to share-based long-term incentive schemes.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

154

Card Factory plc Annual Report and Accounts 2026

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. Shares held in Treasury Reserve are excluded from the shares in issue as they do not

hold any voting rights or attract any dividends.

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.

	2026	2025
	(Number)	(Number)
Weighted average number of shares in issue	348,196,571	346,910,019
Weighted average number of dilutive share options	771,642	2,295,420
Weighted average number of shares for diluted
Earnings Per Share	348,968,213	349,205,439

	£m	£m
Profit for the financial period	31.2	47. 8

	Pence	Pence
Basic Earnings Per Share	9.0	13.8
Diluted Earnings Per Share	8.9	13.7

Adjusted EPS, which excludes the post-tax effect of items excluded from Adjusted PBT in

the period, is equal to 11.8 pence per share (FY25: 14.3 pence per share). Adjusted Diluted

Earnings Per Share is equal to 11.8 pence per share (FY25: 14.2 pence per share). These are

Alternative Performance Measures not defined under IFRS, which is defined and reconciled in

the glossary on pages 178 to 181.

10 Intangible assets

		Acquired Customer	Acquired
	Goodwill	Relationships	Brands	Software	Total
	£m	£m	£m	£m	£m
Cost
At 1 February 2025	336.9	12.2	0.7	42.0	391.8
Additions	–	–	–	7.7	7.7
Acquisitions (note 29)	7.4	11.5	8.2	7.2	34.3
Derecognition on cessation of trade	(14.4)	–	–	–	(14.4)
At 31 January 2026	329.9	23.7	8.9	56.9	419.4
Amortisation/impairment
At 1 February 2025	14.4	0.3	–	20.6	35.3
Amortisation in the period	–	1.8	0.3	4.4	6.5
Impairment in the period	–	–	–	3.2	3.2
Derecognition on cessation of trade	(14.4)	–	–	–	(14.4)
At 31 January 2026	–	2.1	0.3	28.2	30.6
Net book value
At 31 January 2026	329.9	21.6	8.6	28.7	388.8
At 31 January 2025	322.5	12.0	0.6	21.4	356.5

During the year, the Group has derecognised the cost and accumulated impairment (with a

net book value of £nil) associated with goodwill allocated to the Getting Personal CGU, which

ceased to trade on 31 January 2025.

As at 31 January 2026, the Group held £6.3 million of assets under construction within

Software (FY25: £3.5 million). These assets do not amortise until brought into use. Software

assets include individually material assets relating to core, integrated business systems with a

net book value of £8.4 million and a remaining useful life of approximately eight years.

Strategic Report Governance Financial Statements

155

Company Information

10 Intangible assets continued

		Acquired Customer	Acquired
	Goodwill	Relationships	Brands	Software	Total
	£m	£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	12.2	0.7	–	21.6
At 31 January 2025	336.9	12.2	0.7	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
At 31 January 2025	14.4	0.3	–	20.6	35.3
Net book value
At 31 January 2025	322.5	11.9	0.7	21.4	356.5
At 31 January 2024	313.8	–	–	17.6	331.4

Goodwill

The carrying amount of goodwill is allocated to the following cash-generating units:

	2026	2025
	£m	£m
cardfactory stores	313.8	313.8
Garven Holdings	8.7	8.7
Funky Pigeon	7.4	–
Total goodwill	329.9	322.5

£313.8 million of goodwill is allocated to 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. The portfolio of cardfactory stores is the lowest

level at which the Group’s management monitors goodwill related to stores 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 2026 was £362.7 million (FY25: £374.6 million).

Impairment testing

As a result of the acquisition of Garven Holdings, LLC in FY25, £8.9 million of goodwill was

recognised by the Group and allocated wholly to the Garven CGU, which forms part of the

wholesale 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 2026 was £10.6 million (FY25: £10.9 million).

As a result of the acquisition of Funkypigeon.com Limited on 14 August 2025, the Group have

recognised both goodwill and intangible assets associated with existing customer relationships

and branding of the acquired business. The valuation of the intangible assets was performed

using the Multi-Period Excess Earnings Method (MPEEM) to determine the fair value of the

customer relationships and the Relief from Royalty Method (RFR) to determine the fair value of

the brand acquired.

Both the MPEEM and RFR valuation methods relied on several key assumptions in reaching

a valuation for the customer relationships and branding. The MPEEM method used forecast

cash flows of the acquired business in order to generate the present value of future cash flows,

which represents the fair value of the assets acquired. The key assumptions in the customer

relationship valuation include the growth rate of sales, the discount rate applied and the

retention rate of existing customer relationships. The RFR method values the brand using the

projected future revenues of the acquired business and applying a benchmarked royalty rate

to determine the fair value of the brand acquired.

Customer relationships and Brands are intangible assets with a definite life, the average

remaining useful life of these classes of assets are:

• Brand – 14 years and 2 months.

• Customer relationships – 9 years and 2 months.

The Group has completed an impairment test as at 31 January 2026 in respect of the goodwill

allocated to the stores, Garven and Funky Pigeon CGUs.

In each case, the recoverable amount was determined based on a value-in-use calculation.

The cash flows used in the value-in-use calculation were based on the Group’s most recently

approved five-year plan, adjusted where necessary to exclude the costs and benefits

associated with future investments or initiatives (such as, for example, new stores) 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 purchases of goods for resale (for the stores CGU);

• The terminal growth rate applied; and

• The discount rate.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

156

Card Factory plc Annual Report and Accounts 2026

The values assigned to the variables that underpin the Group’s expectations of future trading

performance were determined based on actual performance and the Group’s expectations

with regard to future trends. Where applicable, amounts take into account the Group’s 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 GBP/USD 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 of the relevant CGU. The

values assigned to terminal growth rates and discount rates for each CGU are shown in the

table below:

	Terminal growth rate		Discount rate
CGU	FY26	FY25	FY26	FY25
Stores	0%	0%	10.5%	12.0%
Garven	0%	0%	11.5%	12.0%
Funky Pigeon	0%	N/A	11.5%	N/A

The Group applies a 0% terminal growth rate beyond the five-year term of the plan for all

CGUs, representing a sensitised view of the Group’s estimate of the long-term growth rate in

the markets in which each CGU operates. While 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.

The forecast cash flows are discounted using a pre-tax rate derived from the weighted average cost

of capital of the Group (determined using the capital asset pricing model, actual debt costs and

available market data), adjusted to reflect the specific risks associated with each CGU, including

the country risk, currency risk and size risk. In all cases, no impairment loss was identified and the

recoverable amount indicated sufficient headroom such that any reasonably possible change in

the key assumptions would not result in an impairment charge in respect of any CGU.

During the year, the Group recognised an impairment charge of £3.2 million in respect of the

online platform for cardfactory online. The charge to the cardfactory online assets reflects the

post-acquisition plans regarding future use of technology across the two platforms and this

has resulted in the existing cardfactory online assets being considered obsolete. No further

impairment review has been performed on this CGU as the remaining assets have a trivial net

book value.

Impairment testing: Intangible assets not yet available for use

Assets not yet ready for use relate to software assets under construction within the cardfactory

stores and Funky Pigeon CGUs that have both been considered for impairment as above.

11 Property, plant and equipment

	Freehold	Leasehold	Plant, equipment,
	property	improvements	fixtures & vehicles	Total
	£m	£m	£m	£m
Cost
At 1 February 2025	22.7	40.8	106.5	170.0
Additions	1.4	–	10.3	11.7
Acquisitions (note 29)	–	–	1.2	1.2
Disposals	–	–	(0.1)	(0.1)
At 31 January 2026	24.1	40.8	117.9	182.8
Depreciation
At 1 February 2025	5.7	40.4	75.2	121.3
Depreciation in the period	0.5	0.1	9.1	9.7
Impairment	–	–	0.3	0.3
Depreciation on disposals	–	–	(0.1)	(0.1)
At 31 January 2026	6.2	40.5	84.6	131.2
Net book value
At 31 January 2026	17.9	0.3	33.4	51.6
At 31 January 2025	17.0	0.4	31.3	48.7

Strategic Report Governance Financial Statements

157

Company Information

11 Property, plant and equipment continued

	Freehold	Leasehold	Plant, equipment,
	property	improvements	fixtures & vehicles	Total
	£m	£m	£m	£m
Cost
At 1 February 2024	22.6	40.8	95.7	159.1
Additions	0.1	–	11.3	11.5
Acquisition of Garven & Garlanna
(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 2026, the Group held assets under construction of £1.5 million (FY25: £nil) within

plant, equipment, fixtures and vehicles. These assets do not depreciate until brought into use.

The impairment charge of £0.3 million for plant, equipment, fixtures and vehicles has arisen as

part of the cardfactory stores impairment testing as discussed in note 12.

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.

	2026	2025
Right-of-use assets	£m	£m
Buildings	113.5	109.4
Motor vehicles	1.3	0.8
	114.8	110.2

The right-of-use assets movement in the year is as follows:

	2026	2025
	£m	£m
At the beginning of the year	110.2	99.2
Acquisition of Funky Pigeon	0.6	–
Acquisition of Garven	–	0.1
Additions:
Buildings	41.1	47. 5
Motor vehicles	1.4	0.3
Disposals	(0.4)	(1.0)
Depreciation charge:
Buildings	(36.4)	(35.7)
Motor vehicles	(0.9)	(0.6)
Net impairment (charge)/reversal	(1.1)	0.4
Effect of foreign exchange rates	0.3	–
At the end of the year	114.8	110. 2

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 while 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.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

158

Card Factory plc Annual Report and Accounts 2026

Impairment testing: Store assets

As described in note 10, the Group considers each individual store in the estate to be a CGU

for impairment testing purposes. The Group assesses indicators of impairment for the store

portfolio on the basis of whether an impairment charge (or reversal) could arise in respect of

an individual store, being the smallest group of assets to which separable cash flows can be

allocated. As a result of carried forward impairment charges, indicators of impairment linked

to economic performance and any stores planned to close, the Group identified a number of

stores with an indicator of potential impairment for FY26.

The recoverable amount of each store was determined based on the expected future cash

flows applicable to that 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. Shared costs applicable to the store estate are allocated to individual stores

on the basis of pro-rata revenue.

The significant assumptions in the store impairment model are consistent with those described

in note 10, with the addition of the allocation of central and shared overheads. The vertically

integrated and omnichannel nature of the Group with a single, central support function means

the allocation of shared overheads between divisions, CGUs and, for the purpose of store-level

impairment testing, to individual stores inherently involves judgement.

Central costs are reviewed on a line-by-line basis to identify amounts that are necessarily

incurred to generate the CGU cash flows, which includes identification of certain costs that

cannot be reasonably and accurately allocated to individual stores and are only necessarily

incurred to generate the cash flows of the CGU comprising the whole Group of stores.

Application of this approach and assumptions resulted in a net impairment charge of

£1.4 million in respect of stores, which is comprised of £1.4 million of impairment reversals

and £2.8 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 charge to impairment on right-of-use

assets of £1.1 million and a net charge to PPE of £0.3 million.

The Group considered a range of feasible alternative allocations of central overhead based on

different scenarios and differing judgements regarding the allocation of specific cost items.

This analysis indicated a potential range of impairment charges between £0.6 million and

£2.7 million. The Group believes that the position adopted in the Financial Statements

represents a balanced view of central overheads that are necessarily incurred and can be

allocated to individual stores on a reasonable and consistent basis.

Having considered scenarios consistent with those reviewed in the goodwill impairment tests,

the Group is satisfied that there are no other reasonable changes in key assumptions that

would result in a material change in the impairment charge recorded for stores.

Lease liabilities

	2026	2025
	£m	£m
Current lease liabilities	(32.8)	(21.7)
Non-current lease liabilities	(90.4)	(88.7)
Total lease liabilities	(123.2)	(110.4)

Lease expense

	2026	2025
	£m	£m
Depreciation expense on right-of-use assets	37.3	36.3
Impairment/(reversal of impairment) of right-of-use assets	1.1	(0.4)
Profit on disposal of right-of-use assets	(0.7)	–
Lease interest	8.7	8.0
Expense relating to variable lease payments 1	0.4	0.2
Total lease-related income statement expense	46.8	44.1

1. 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.

Accounting policies for leases are detailed in note 1. Assets, liabilities and the income

statement expense in relation to leases are detailed as follows.

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 while 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.

Strategic Report Governance Financial Statements

159

Company Information

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		Other
	Fixed	Share-based	instruments and	Tax	temporary
	assets	payments	hedge accounting	losses	differences	Total
	£m	£m	£m	£m	£m	£m
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
Credit/(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)
Acquisition of subsidiary	(0.7)	–	–	–	(4.9)	(5.6)
Prior year adjustment	(4.0)	–	–	–	0.1	(3.9)
Credit/(charge) to income
statement	(0.2)	0.2	–	0.3	(0.1)	0.2
Credit/(charge) to other comprehensive income	–	–	1.7	–	–	1.7
Charge to equity	–	(0.1)	(0.5)	–	–	(0.6)
At 31 January 2026	(7.7)	1.5	1.0	0.9	(4.7)	(9.0)

Other temporary differences includes deferred tax recognised on acquired intangible assets.

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 £0.9 million has been

recognised separately as it relates to losses under different tax authorities.

Deferred tax assets and liabilities are offset as follows:

	2026	2025
	£m	£m
Deferred tax assets	3.4	1.6
Deferred tax liabilities	(12.4)	(3.0)
Net deferred tax liability	(9.0)	(1.4)

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.

14 Inventories

	2026	2025
	£m	£m
Finished goods	58.5	60.5
Work in progress	0.4	0.6
	58.9	61.1

Inventories are stated net of provisions totalling £10.6 million (2025: £8.2 million). The cost

of inventories recognised as an expense and charged to cost of sales in the year, net of

movements in provisions, was £186.0 million (2025: £162.8 million).

15 Trade and other receivables

	2026	2025
	£m	£m
Current
Trade receivables	13.0	7.4
Other receivables	0.8	0.4
Prepaid property costs	1.6	5.0
Other prepayments	5.4	4.2
	20.8	17.0

The Group has net US Dollar-denominated trade and other receivables of £4.9 million

(2025: £1.6 million) and net South African Rand-denominated trade and other receivables of

£4.3 million (2025: £2.8 million). Trade receivables is recorded net of £0.8 million of specific

provisions related to potential irrecoverable debt.

Group revenue is principally attributable to the retail and wholesale sale of cards, dressings

and gifts. Revenue is subject to a single performance obligation fulfilled by receipt of goods at

the point of payment with minimal returns and refunds. Trade receivables are attributable to

retail partnerships and non-retail sales which generated revenue of £47.2 million

(2025: £22.2 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.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

160

Card Factory plc Annual Report and Accounts 2026

16 Cash and cash equivalents

	2026	2025
	£m	£m
Cash at bank and in hand	18.8	16.5
Cash presented as current assets in the balance sheet	18.8	16.5
Bank overdraft	(1.4)	–
Overdraft presented as current liabilities in the balance sheet	(1.4)	–
Net cash and cash equivalents	17.4	16.5

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, while 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

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:

	2026	2025
	£m	£m
Sterling	10.2	8.5
Euro	4.4	2.5
US Dollar	3.7	5.0
Australian Dollar	0.4	–
South African Rand	(1.3)	0.5
	17.4	16.5

17 Borrowings

	2026	2025
	£m	£m
Current liabilities
Bank loans and accrued interest	0.1	0.1
Bank overdraft	1.4	–
Total current liabilities	1.5	0.1
Non-current liabilities
Bank loans	83.8	73.9
Total non-current liabilities	83.8	73.9

Bank loans

Bank borrowings as at 31 January 2026 are summarised as follows:

			Interest margin
	Liability	Interest rate	ratchet range
	£m	%	%
31 January 2026
Secured revolving				Total facility size =
credit facility	85.0	Margin + SONIA	1.90–2.80	£160 million
Property mortgage	0.3
Bank overdraft	1.4
Debt issue costs	(1.4)
	85.3
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

Strategic Report Governance Financial Statements

161

Company Information

17 Borrowings continued

The Group’s financing facilities are principally comprised of a revolving credit facility (RCF)

originally entered into in April 2024. In August 2025, the Group exercised a £35 million Accordion

option with lender approval, to extend the total size of the RCF to £160 million (see note 1).

The facilities had an initial maturity date in April 2028, which was extended to November 2028

during FY26.

The facilities include £40 million of remaining accordion and a further extension option to

November 2029, both of which can be executed subject to certain administrative conditions

and lender approval.

The margin on the facilities is dependent upon the Group’s leverage position, with margins

between 1.9–2.8%. The 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 (calculated as the ratio of EBITDA plus IFRS 16

interest and depreciation to net finance charges plus IFRS 16 interest and depreciation). The

Group expects to operate comfortably within these covenant levels for the foreseeable future.

Other facilities include a property mortgage in the Group’s South African business, which has

been fully settled and extinguished since the period-end plus local overdraft facilities, which

are used for day-to-day liquidity management purposes.

Outstanding debt issue costs in respect of the April 2024 refinancing totalled £1.4 million

and are being amortised to the income statement over the remaining duration of the revised

facilities including £0.2 million of extension fees incurred in FY26.

18 Trade and other payables

	2026	2025
	£m	£m
Current
Trade payables	25.2	20.7
Other taxation and social security	19.8	21.4
Property accruals	2.8	5.5
Payroll accruals	8.6	8.9
Other accruals	17.5	20.3
	73.9	76.8

The Group has net US Dollar-denominated trade and other payables of £11.8 million (2025:

£15.8 million), net South African Rand-denominated trade and other payables of £1.4 million

(2025: £1.3 million), and net Euro-denominated trade and other payables of £2.6 million

(2025: £2.7 million).

19 Share capital and share premium

	2026	2025
	(Number)	(Number)
Share capital
Allotted, called up and fully paid ordinary shares
of one pence:
At the start of the period	348,004,716	345,576,361
Issued in the period (note 25)	3,591,206	2,428,355
At the end of the period	351,595,922	348,004,716

	£m	£m
Share capital
At the start of the period	3.5	3.5
Issued in the period (note 25)	–	–
At the end of the period	3.5	3.5

	£m	£m
Share premium
At the start of the period	203.2	202.7
Issued in the period (note 25)	0.6	0.5
At the end of the period	203.8	203.2

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

162

Card Factory plc Annual Report and Accounts 2026

Shares issued in the period relate entirely to those issued upon vesting of employee share

schemes (see note 25).

	2026	2026	2025	2025
Treasury shares	(Number)	(£’m)	(Number)	(£’m)
Ordinary shares of one pence:
At the start of the period	–	–	–	–
Purchase of shares into treasury	5,795,564	5.0	–	–
Transfer of shares to retained earnings	(28,730)	–	–	–
At the end of the period	5,766,834	5.0	–	–

On 30 October 2025, the Group announced the commencement of a share repurchase

programme, the purpose of which was to acquire shares to satisfy future awards under the

Group’s employee share schemes (see note 25).

On 28 April 2026, the Group announced the intention to return surplus cash to shareholders

via a £15 million share buyback programme. Shares purchased under the programme are to

be cancelled.

	2026	2025
Share capital in issue	(Number)	(Number)
Total allotted, called up and fully paid
ordinary shares as at 31 January 2026	351,595,922	348,004,716
Less: Shares held in treasury reserve	(5,766,834)	–
Total shares in issue	345,829,088	348,004,716

20 Notes to the cash flow statement

Reconciliation of operating profit to cash generated from operations:

	2026	2025
	£’m	£’m
Profit before tax	43.9	6 4.1
Net finance expense	15.5	15.2
Operating profit	59.4	79.3
Adjusted for:
Depreciation and amortisation	53.6	48.5
Impairment charge/(reversal) of right-of-use assets	1.1	(0.4)
Impairment of tangible assets	0.3	–
Impairment of intangible assets	3.2	–
Gain on disposal of fixed assets	(0.7)	–
Cash flow hedging foreign currency movements	4.7	(1.9)
Unrealised foreign exchange (gains)/losses	(1.3)	(0.1)
Share-based payments charge	2.3	2.3
Operating cash flows before changes in working capital	122.6	127.7
Decrease/(increase) in receivables	(2.7)	(3.3)
Decrease/(increase) in inventories	(1.4)	(11.2)
(Decrease)/increase in payables	5.9	(4.1)
Movement in provisions	(2.1)	(3.5)
Cash inflow from operating activities	122.3	105.6

Strategic Report Governance Financial Statements

163

Company Information

21 Analysis of Net Debt

	At 1 February		Non-cash	At 31 January
	2025	Cash flow	changes	2026
	£m	£m	£m	£m
Secured bank loans and accrued
interest (note 17)	(74.0)	(3.3)	(6.6)	(83.9)
Lease liabilities	(110.4)	45.7	(58.5)	(123.2)
Total debt	(184.4)	42.4	(65.1)	(207.1)
Add: debt costs capitalised	(1.4)	(0.2)	0.2	(1.4)
Add: bank overdraft	–	(1.4)	–	(1.4)
Less: cash and cash equivalents
excluding bank overdraft (note 16)	16.5	2.3	–	18.8
Net Debt	(169.3)	43.1	(64.9)	(191.1)
Lease liabilities	110.4	(45.7)	58.5	123.2
Net Debt excluding lease liabilities	(58.9)	(2.6)	(6.4)	(67.9)

	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
excluding bank overdraft (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)

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 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
Acquisitions (note 29)	–	2.5	–	2.5
Provisions utilised during the year	–	(0.4)	(1.2)	(1.6)
Provisions released during the year	–	(0.8)	–	(0.8)
Amounts provided during the year	–	0.3	–	0.3
At 31 January 2026	2.1	3.7	–	5.8
Current provisions as at 31 January 2026	2.1	1.2	–	3.3
Non-current provisions as at 31 January 2026	–	2.5	–	2.5
Total provisions as at 31 January 2026	2.1	3.7	–	5.8

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, leaving

£2.1 million outstanding. 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 2026. 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.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

164

Card Factory plc Annual Report and Accounts 2026

The costs incurred as a result of the restructuring programme associated with the closure of

the Getting Personal website in FY25 were wholly utilised in FY26.

The Group maintains provisions in respect of its store portfolio to cover the estimated cost of

restoring properties to their original condition upon exit of the property. 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.

We have recognised a £2.5 million provision for dilapidations related to the Guernsey property

acquired in the acquisition of Funky Pigeon in FY26, see note 29 for further details.

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 73 to

77 and in the Corporate Governance Report on pages 84 to 89.

Liquidity risk

The Group has continued to generate significant operating cash inflows in FY26. 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 £67.9 million (2025: £58.9 million)

and undrawn RCF facility of £73.7 million (see note 17).

The quantum, tenor and key terms of the Group’s financing facilities are set out in note 17 .

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 to	Two to	More than
	one year	two years	five years	five years	Total
	£m	£m	£m	£m	£m
At 31 January 2026
Bank loans	0.1	0.1	85.1	–	85.3
Lease liabilities	40.2	38.8	53.0	8.6	140.6
Trade and other payables	73.9	–	–	–	73.9
	114.2	38.9	138.1	8.6	299.8
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	7 7.8	–	–	–	7 7.8
	106.9	35.1	131.5	6.7	280.2

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.

The figures included under bank loans are aged based on the maturity date of the existing

facilities as laid out in note 17.

	Less than	One to	Two to	More than
	one year	two years	five years	five years	Total
	£m	£m	£m	£m	£m
At 31 January 2026
Foreign exchange contracts
– Inflow	61.2	45.4	29.9	–	136.5
– Outflow	(64.9)	(47.8)	(30.5)	–	(143.2)
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)

Strategic Report Governance Financial Statements

165

Company Information

23 Financial risk management continued

Foreign currency risk

The Group has an exposure to foreign currency risk due to a significant proportion of the

Group’s goods for resale 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 while 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 valuation of the Group’s US Dollar-denominated

financial instruments to a 10 cent movement in the US Dollar to GBP exchange rate at the

balance sheet date, holding all other assumptions constant.

	2026			2025
	Impact on profit	Impact on cash flow	Impact on profit	Impact on cash flow
	after tax	hedging reserve	after tax	hedging reserve
	£m	£m	£m	£m
10 cent increase	(3.2)	(3.9)	(2.2)	(2.8)
10 cent decrease	3.7	4.5	2.6	3.3

The Group generates a small proportion of its total revenue in Euros as a result of its operations

in the Republic of Ireland and Australian Dollars (AUD) as a result of its supply contracts in

Australia. Euro and AUD receipts are used to settle obligations denominated in those currencies

with any surplus 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 permits up to 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 as a result of the revaluation of such

hedges given a 50 basis point increase or decrease in the interest rate for the year. As of

31 January 2026, the Group no longer holds any interest rate hedges.

		2026		2025
	Impact on profit	Impact on cash flow	Impact on profit	Impact on cash flow
	after tax	hedging reserve	after tax	hedging reserve
	£m	£m	£m	£m
50 basis point
interest rate increase	–	–	(0.3)	–
50 basis point
interest rate decrease	–	–	0.3	–

A change of 50 basis points in the SONIA rate would cause a movement of +/- £0.3 million in

profit after tax if the current RCF balance was maintained throughout the year.

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, where possible, counterparties are limited to high

credit-quality financial institutions and exposures are monitored on a monthly basis. We typically

maintain cash balances at a level required to meet our working capital requirements, minimise

our cash drawings on debt facilities and net interest expense. Short-term cash surpluses are

invested in treasury deposit accounts with reputable banking institutions.

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 £47.5 million in the year (2025:

£22.2 million) and trade receivables at 31 January 2026 were £12.4 million (2025: £7.4 million).

Total trade and other receivables at 31 January 2026 are £20.8 million (2025: £17.0 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 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.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

166

Card Factory plc Annual Report and Accounts 2026

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 2026, our capital allocation policy is unchanged and the Board has proposed a final

dividend of 3.7 pence per share in respect of the 2026 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.

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 long-term target is to maintain a maximum

Adjusted Leverage position of 1.5 times.

Details on Group borrowings are set out in note 17. 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:

	2026	2025
	£m	£m
Derivative assets
Non-current
Foreign exchange contracts	0.7	0.9
Current
Foreign exchange contracts	1.0	2.4
Derivative liabilities
Current
Foreign exchange contracts	(4.9)	(0.3)
Non-current
Foreign exchange contracts	(3.4)	(0.4)
Net derivative financial instruments
Foreign exchange contracts	(6.6)	2.6

Foreign exchange contracts

At 31 January 2026, the Group held a portfolio of foreign currency derivative contracts with

notional principal amounts in GBP totalling £143.2 million (2025: £88.1 million) to mitigate the

exchange risk on future US Dollar-denominated trade purchases.

Foreign currency derivatives with a notional value of £76.5 million were designated in cash flow

hedging relationships at 31 January 2026 (2025: £39.7 million). Of this amount, £27.7 million is

expected to unwind in the next 12 months with an average strike price of 1.30, £27.1 million is

expected to unwind between 13 and 24 months at an average strike price of 1.30, and

£21.7 million is expected to unwind between 25 and 72 months at an average strike price

of 1.34. 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 £66.6 million representing a fair

value liability of £3.4 million (2025: £48.4 million representing a fair value asset of £1.2 million)

were not designated as hedging relationships.

Fair value movements in foreign currency derivatives are recognised in other comprehensive

income/expense to the extent the contract is part of an effective hedging relationship.

The fair value movements of £4.7 million that do not form part of an effective hedging relationship

have been charged to the income statement (2025: £1.5 million) within cost of sales.

Strategic Report Governance Financial Statements

167

Company Information

24 Financial instruments continued

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 2026	£m	£m	£m	£m
Financial assets measured at fair value
Derivative financial instruments	0.2	1.5	–	–
Financial assets not measured at fair value
Trade receivables	–	–	20.8	–
Cash and cash equivalents	–	–	18.8	–
Financial liabilities measured at fair value
Derivative financial instruments	(3.7)	(4.6)	–	–
Financial liabilities not measured at fair value
Secured bank loans	–	–	–	(83.9)
Unsecured bank overdrafts	–	–	–	(1.4)
Trade and other payables	–	–	–	(73.9)
	(3.4)	(3.2)	39.6	(159.2)

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)

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.

25 Equity-settled share-based payment arrangements

cardfactory Restricted Share Awards and Long Term Incentive Plan

The Company grants restricted share awards (RSAs) to the Executive Directors, members of

the senior management 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 and senior management 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 management. Further details on Executive Director share awards are provided in the

Remuneration Report on pages 96 to 107.

cardfactory 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	average	Number	average
	of options	exercise price	of options	exercise price
Outstanding at 1 February 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
Granted during the year	2,205,624	£0.01	1,699,864	£0.77
Exercised during the year	(2,288,138)	£0.01	(1,331,798)	£0.49
Forfeited during the year	(406,667)	£0.01	(858,140)	£0.69
Outstanding at 31 January 2026	7,359,204	£0.01	3,427,821	£0.75

The weighted average remaining contract for options under the SAYE scheme is 1.6 years and

under the RSA/LTIP scheme is 1.4 years.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

168

Card Factory plc Annual Report and Accounts 2026

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.

		2026		2025
	RSA/LTIP (1)	SAYE	RSA/LTIP (1)	RSA/LTIP (2)	SAYE
Granted during the year	2,205,624	1,699,864	2,431,769	48,923	1,493,898
Fair value at grant date	£0.97	£0.27	£0.93	£0.99	£0.46
Share price at grant date *	£0.97	£0.94	£0.93	£0.99	£1.12
Exercise price *	£0.01	£0.77	£0.01	£0.01	£0.75
Expected volatility	40%	41%	48%	43%	47%
Expected term (years)	3	3	3	1.25	3
Expected dividend yield	N/A **	5.1%	N/A **	N/A **	4%
Risk free interest rate	3.87%	3.75%	4.38%	4.24%	4.30%

* 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 2026 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:

	2026	2025
All amounts exclude national insurance costs	£m	£m
RSA or LTIP	2.0	2.0
SAYE	0.3	0.3
Total share-based payment expense	2.3	2.3

26 Capital commitments

The Group had £2.1 million of capital commitments relating to the purchase of a printing

machine at 31 January 2026 (2025: £nil).

27 Contingent liabilities

There were no material contingent liabilities at 31 January 2026 (2025: £nil).

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 2026, the

Group donated £1.2 million (2025: £1.4 million) to the Foundation from carrier bag sales and

has an outstanding balance owed to the Foundation of £0.1 million at 31 January 2026

(2025: £0.1 million).

A full listing of the Group’s subsidiary undertakings is provided in the notes to the Company

accounts on page 175.

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. Further details of Directors’ remuneration are set out in the Directors’

Remuneration Report on pages 96 to 107. Directors of the Company and their immediate

families control 0.4% 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 Funky Pigeon

On 14 August 2025, the Group acquired 100% of the issued share capital of Funkypigeon.com

Limited (‘Funky Pigeon’) from WHSmith plc for cash consideration which, following finalisation

of customary adjustments for closing cash, debt and working capital, totalled £25.7 million.

Acquisition-related costs totalling £1.7 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 non-recurring in nature as seen in the glossary on page 178 to 181.

The purchase price allocation for the acquisition of Funky Pigeon was prepared in accordance

with IFRS 3 with the fair values of the assets and liabilities acquired set in the table overleaf.

Strategic Report Governance Financial Statements

169

Company Information

29 Business combinations continued

	As at
	14 August 2025
Fair value of identifiable net assets	£m
Non-current assets	9.0
Property, plant & equipment	1.2
Intangible assets	7.2
Right-of-use assets	0.6
Current assets	2.4
Inventories	1.1
Trade & other receivables	1.3
Cash at bank and in hand	–
Total assets	11.4
Current liabilities	(7.9)
Trade & other payables	(4.0)
Deferred income	(0.1)
Deferred tax	(0.7)
Lease liabilities	(0.6)
Provisions	(2.5)
Total liabilities	(2.7)
Net assets	3.5
Add: acquired intangible assets (note 10)	19.7
Less: deferred tax on acquired intangible assets	(4.9)
Add: Goodwill (note 10)	7.4
Total consideration paid	25.7
Cash at bank and in hand acquired	–
Net cash outflow on acquisition	25.7

The acquired business operates funkypigeon.com, an established online personalised card and

attached gifting business, which is supported by its standalone team in Bristol and Guernsey.

Over the prior two financial years, Funky Pigeon on average generated c.£32 million revenue

per annum and c.£5 million EBITDA.

The acquisition of Funky Pigeon accelerates cardfactory’s existing digital strategy, providing

a platform for online growth, particularly in the direct-to-recipient card and attached gifting

market. By combining Funky Pigeon’s digital platform with our existing omnichannel offer,

cardfactory intends to leverage its 24 million unique store customers to develop a highly

competitive online presence in the celebration occasions market. Our vision for online is

to expand our digital presence by becoming an online destination to help our customers

celebrate all of life’s moments.

The total cash consideration for the transaction was £25.7 million on a cash/debt free basis,

of which £24.1 million was paid on the acquisition date and the remaining amount settled

on finalisation of the completion accounts in October 2026. There is no further contingent or

deferred consideration payable.

The Group 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:

• The Group measured the acquired lease liabilities using the present value of the remaining

lease payments at the date of acquisition. The right-of-use assets were measured at an

amount equal to the lease liabilities.

• Recognising a provision (£2.5 million) in relation to costs expected to be incurred to return

leased property to its original state as disclosed in note 22.

The fair value of the net assets acquired is £3.5 million. The Group has recognised £11.5 million

of identifiable customer-related intangibles assets and £8.2 million of brand-related intangible

assets, see note 10 for further details. This also led to the recognition of a deferred tax liability

of £4.9 million, which is a timing difference that will unwind over the life of the intangible

assets. This gives a total fair value of acquired assets of £18.3 million, which is lower than the

fair value of the consideration paid (including cash acquired) of £25.7 million, the balance has

resulted in recognition of £7.4 million of goodwill, which is not tax-deductible. We consider

that goodwill is appropriately recognised as we expect to achieve synergies with our existing

Online business in integrating the operations of Funky Pigeon with the Group as part of our

digital strategy.

Funky Pigeon contributed revenue of £13.5 million and a loss of £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 Funky Pigeon had been completed on the first day of the financial year,

Group revenues for the year to 31 January 2026 would have been £597.9 million and Group

profit after tax would have been £34.1 million.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

170

Card Factory plc Annual Report and Accounts 2026

PARENT COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 January 2026

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 January 2026

Note

2026

£m

2025

£m

Non-current assets

Investments 4 316.2 316.2

Deferred tax assets 0.5 0.4

316.7 316.6

Current assets

Trade and other receivables 5 0.1 6.5

Total assets 316.8 323.1

Current liabilities

Trade and other payables 6 (4.4) (3.3)

Net assets 312.4 319.8

Equity

Share capital 7 3.5 3.5

Share premium 7 203.8 203.2

Treasury shares 7 (5.0) –

Merger reserve 2.7 2.7

Retained earnings 107.4 110.4

Equity attributable to equity holders of the parent 312.4 319.8

The Company’s profit for the year to 31 January 2026 was £12.4 million (2025: profit of

£20.3million).

The Financial Statements on pages 171 to 177 were approved by the Board of Directors

on27April 2026 and were signed on its behalf by

Matthias Seeger

Chief Financial Officer

Company number 09002747

capital

£m

premium

£m

Treasury

£m

Merger

reserve

£m

Retained

earnings

£m

Total

equity

£m

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

Total comprehensive income for the year

Profit or loss – – – – 12.4 12.4

Transactions with owners,

recordeddirectly in equity

Deferred tax on share-based payments – – – – (0.1) (0.1)

Shares issued – 0.6 – – – 0.6

Treasury shares purchased – – (5.0) – – (5.0)

Share-based payments – – – – 2.2 2.2

Dividends

– – – – (17.5) (17.5)

At 31 January 2026 3.5 203.8 (5.0) 2.7 107.4 312.4

1. Dividends includes £0.3 million (FY25: £0.5 million) dividend equivalents payable on employee share awards.

The notes that accompany these Financial Statements are included on pages 172 to 177.

Strategic Report Governance Financial Statements

171

Company Information

Parent Company Statement of Changes In EquityParent Company Statement of Financial Position

PARENT COMPANY CASH FLOW STATEMENT

For the year ended 31 January 2026

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

For the year ended 31 January 2026

Note

2026

£m

2025

(Restated)

£m

Cash (outflow)/inflow from operating activities 10 21.6 19.3

Corporation tax paid – –

Net cash (outflow)/inflow from operating activities 21.6 19.3

Cash flows from financing activities

Shares issued under employee share schemes 3 0.6 0.5

Treasury shares purchased (5.0) –

Dividends paid

(17.2) (19.8)

Net cash outflow from financing activities (21.6) (19.3)

Net increase in cash and cash equivalents – –

Cash and cash equivalents at the beginning of

theyear – –

Closing cash and cash equivalents – –

1. The cash flow statement has been amended to present dividends paid as cash flows from financing activities.

Comparatives for FY25 have also been reclassified. In FY25, dividends paid were presented as cash flows from

investing activities, in error. This change is presentational only, and there are no changes to any of the current or

prior year cash flows or closing cash balances as a result of this reclassification. See note 1 for further detail.

The notes that accompany these Financial Statements are included on pages 172 to 177.

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 127 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, 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 as follows 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 145 of the consolidated Financial Statements, have not had a material effect

on the Company’s Financial Statements.

172

Card Factory plc Annual Report and Accounts 2026

Notes to the Parent Company Financial StatementsParent Company Cash Flow Statement

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 145 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.

Income statement

The Company made a profit after tax of £12.4 million for the year ended 31 January 2026

(2025: £20.9 million), including £12.6 million dividends received from subsidiary undertakings

(2025: £19.7 million). 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 cardfactory Restricted Share Awards Scheme (RSA) and the cardfactory 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.

Prior period adjustment

In December 2025, the Company received an enquiry from the Financial Reporting Council

requesting further information on the Group’s Annual Report & Accounts for the period ended

31 January 2025. This brought to our attention a classification error in the presentation of the

Parent Company’s cash flow statement.

Dividends paid were incorrectly classified as ‘cash flows from investing activities’ in the FY25

Parent Company cash flow statement. To reflect these transactions in compliance with IAS 7

‘Statement of cash flows’ the FY26 Parent Company cash flow statement has been amended to

show dividends paid as ‘cash flows from financing activities’. Comparatives for FY25 have also

been reclassified. There are no other changes to any other statements or supporting notes.

This amendment has no impact on the consolidated Financial Statements of the Group (see

pages 138 to 170). The amendment is presentational only and does not affect the cash flows,

opening nor closing cash balances of the Company for any of the periods presented.

The FRC’s review was based solely on the Group’s published annual report and accounts and

does not provide assurance that the annual report and accounts are correct in all material

respects. The FRC’s role is not to verify the information provided, but to consider compliance

with reporting requirements.

Strategic Report Governance Financial Statements

173

Company Information

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

For the year ended 31 January 2026

1 Accounting policies continued

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 96 to 107.

3 Dividends

On 27 June 2025, the Group paid a final dividend of 3.6 pence per share (totalling £12.6 million)

in respect of the FY25 financial year. This brought total dividends paid in respect of FY25 to

4.8pence per share (totalling £16.8 million).

On 12 December 2025, the Group paid an interim dividend of 1.2 pence per share

(totalling£4.6 million) in respect of the FY26 financial year.

FY26 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

2026 of 3.7 pence per share, equivalent to approximately £13.0 million. The final dividend will

be payable to shareholders on the share register on 29 May 2026, with payments to be made

on 3 July 2026.

Dividends paid in the year:

Pence per

2026

£m

2025

£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

Final dividend for the year ended 31 January 2025 3.6p 12.6 –

Interim dividend for the year ended 31 January 2026 1.2p 4.6 –

Total dividends paid to shareholders in the year 17.2 19.8

Dividend equivalents totalling £0.3 million (2025: £0.5 million) were accrued in the year in

relation to share-based long-term incentive schemes.

4 Investments in subsidiaries

£m

At 31 January 2025 and 31 January 2026 316.2

The Company evaluates its investments in subsidiary undertakings annually for any indicators

of impairment. Management have considered that, as the balance sheet net asset value

exceeds the market capitalisation as at 31 January 2026, there is a potential indicator of

impairment of the Company’s investments, and as a result, management have performed an

impairment review.

Management consider that the value in this investment closely aligns with the goodwill

allocated to 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.

The Company investment impairment review considers the ability of the subsidiaries to repay

the investment value via dividends as opposed to the stores goodwill impairment review, which

looks at the carrying amount of specific assets. As a result, we have performed a value-in-use

assessment that follows the same methodology and largely applies the same assumptions as

discussed in note 10 on page 156, however, management have also taken into account the

fact that the Group’s borrowing facilities held in CF Bidco Limited impact upon the ability of the

subsidiary to pay dividends to the Company. Otherwise, the methodology, assumptions and

cash flows of the value-in-use model follow those discussed in note 10.

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 investments and we have performed sensitivity analysis to inform this conclusion.

174

Card Factory plc Annual Report and Accounts 2026

4 Investments in subsidiaries continued

Subsidiary undertakings

At 31 January 2026 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 gift bags and packaging *******

Funkypigeon.com Limited Online sale of personalised

products and gifts

Same as the Company

* 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.

5 Trade and other receivables

2026

£m

2025

£m

Amounts owed by Group undertakings – 6.3

Prepayments and other debtors 0.1 0.2

0.1 6.5

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

2026

£m

2025

£m

Amounts owed to Group undertakings 3.0 –

Trade payables 0.1 2.2

Accruals 1.3 1.1

4.4 3.3

Strategic Report Governance Financial Statements

175

Company Information

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

For the year ended 31 January 2026

7 Share capital and share premium

2026

(Number)

2025

(Number)

Share capital

Allotted, called up and fully paid ordinary shares of one pence:

At the start of the period 348,004,716 345,576,361

Issued in the period (note 25) 3,591,206 2,428,355

At the end of the period 351,595,922 348,004,716

£m £m

Share capital

At the start of the period 3.5 3.5

Issued in the period (note 25) – –

At the end of the period 3.5 3.5

£m £m

Share premium

At the start of the period 203.2 202.7

Issued in the period (note 25) 0.6 0.5

At the end of the period 203.8 203.2

Shares issued in the period relate entirely to those issued upon vesting of employee share

schemes. See note 25 to the consolidated Financial Statements.

Treasury shares

2026

(Number)

2026

(£m)

2025

(Number)

2025

(£m)

Ordinary shares of one pence:

At the start of the period – – – –

Purchase of shares into treasury 5,795,564 5.0 – –

Transfer of shares to retained earnings (28,730) – – –

At the end of the period 5,766,834 5.0 – –

Share capital in issue

2026

(Number)

2025

(Number)

Total allotted, called up and fully paid ordinary shares

asat31January 2026 351,595,922 348,004,716

Less: Shares held in treasury reserve (5,766,834) –

Total shares in issue 345,829,088 348,004,716

The Company has only one class of shares, which are ordinary shares of one pence each,

carrying no right to a fixed income. No shareholders have waived their rights to dividends.

During the 2026 financial year, 3,591,206 shares (2025: 2,428,355 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.

On 30 October 2025, the Group announced the commencement of a share repurchase

programme, the purpose of which was to acquire shares to satisfy future awards under the

Group’s employee share schemes.

On 28 April 2026, the Group announced the intention to return surplus cash to shareholders

via a £15 million share buyback programme. Shares purchased under the programme are to

be cancelled.

176

Card Factory plc Annual Report and Accounts 2026

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.

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

2026

£m

2025

£m

Profit/(Loss) before tax (excluding dividends received) (0.4) 0.5

Dividends received 12.6 19.8

Operating profit/(loss) 12.2 20.3

Adjusted for:

Share-based payment charge 2.2 2.3

Operating cash flows before changes in working capital 14.4 22.6

Decrease/(Increase) in receivables 6.4 (3.3)

Increase/(decrease) in payables 0.8 –

Cash inflow/(outflow) from operating activities 21.6 19.3

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:

2026

£m

2025

£m

Management services 2.0 2.0

Dividends received from Group undertakings 12.6 19.8

Inter-company working capital cash flows from

Groupundertakings 7.2 3.1

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 96 to 107. Directors of the Company control 0.04% of the ordinary

sharesofthe Company.

Strategic Report Governance Financial Statements

177

Company Information

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.

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

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 FY26 to FY25, 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.

Sales by Printcraft, the Group’s printing division, to external third-party customers and

wholesale partnerships sales are excluded from any LFL sales measure.

Reconciliation of Revenue to LFL Sales

cardfactory

Stores

£m

cardfactory

Online

£m

cardfactory

LFL

£m

Revenue FY26 514.0 7.2 521.2

VAT/other 99.6 1.4 100.9

Adjustment for stores not open in both periods (12.0) – (12.0)

LFL Sales FY26 601.6 8.6 610.1

Revenue FY25 506.8 8.8 515.6

VAT/other 99.1 1.9 101.0

Adjustment for stores not open in both periods (3.1) – (3.1)

LFL Sales FY25 602.8 10.7 613.5

LFL Sales Growth -0.2% -19.9% -0.5%

Note: percentages are calculated based on absolute figures before rounding.

GLOSSARY

178

Card Factory plc Annual Report and Accounts 2026

Glossary

Company Information

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

FY26

£m

FY25

£m

Operating Profit

59.4 79.3

Add back:

Depreciation 47.0 45.2

Amortisation 6.5 3.3

(Gains)/Losses on disposals (0.7) 0.1

Impairment charges/(reversals) 4.6 (0.4)

EBITDA 116.8 127. 5

Add back/(deduct) unrealised losses/(gains) on derivative contracts 4.7 (1.5)

Add back one-off restructuring costs 0.4 1.9

Add back acquisition-related transaction costs 1.7 0.7

Adjusted EBITDA 123.6 128.6

1. While 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 FY26, the Directors have identified the following items that they believe to meet the

definition of ‘one-off/non-underlying’ for this purpose.

• Transaction costs related to the acquisition of Funky Pigeon of £1.7 million.

• Amortisation charged relating to intangible assets recognised as a result of the acquisitions

inFY25 and FY26 of £2.1 million.

• One-off restructuring costs of £0.4 million associated with the closure of the Getting

Personal platform and streamlining central operations, the Ezhakeni site closure in

SouthAfrica and the Property acquisition at Garlanna in Ireland.

• Unrealised losses of £4.7 million on derivative contracts held at 31 January 2026.

• Impairment of the CF Online intangible assets due to our considerations of use of

technology in our digital strategy following the acquisition of Funky Pigeon.

The following items are taken into account in arriving at Adjusted PBT for the equivalent period

last year (FY25):

• 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.

Reconciliation of Adjusted PBT to Profit Before Tax

FY26

£m

FY25

£m

Profit Before Tax 43.9 64.1

Add back/(deduct):

Unrealised losses/(gains) on derivative contracts 4.7 (1.5)

CF Online Intangible impairment 3.2 –

Amortisation of acquired intangibles 2.1 0.3

Acquisition-related transaction costs 1.7 0.7

One-off restructuring costs 0.4 1.9

Non-recurring refinancing charges – 0.5

Adjusted PBT 56.0 66.0

Strategic Report Governance Financial Statements

179

Company Information

GLOSSARY CONTINUED

Adjusted PBT continued

The following table reconciles the impact of adjusting items as outlined on Adjusted Gross

Profit, adjusted operating profit and Adjusted Profit Before Tax.

Reconciliation of adjusting items on the income statement

FY26

£m

FY25

£m

Gross profit 188.7 193.8

(Deduct)/Add back one-off restructuring/transformation costs (0.2) 0.6

Add back/(deduct) unrealised losses/(gains) on derivative contracts 4.7 (1.5)

Adjusted Gross Profit 193.2 192.9

Operating expenses (129.3) (114.5)

Add back acquisition-related transaction costs 1.7 0.7

Add back one-off restructuring costs 0.6 1.3

Add back amortisation of acquired intangibles 2.1 0.3

Add back CF Online Intangible impairment 3.2 –

Adjusted operating profit 71.5 80.7

Finance costs (15.5) (15.2)

Adjusted Profit Before Tax 56.0 66.0

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

FY26

£m

FY25

£m

Adjusted PBT 56.0 66.0

Tax charge (12.7) (16.3)

Tax impact of non-underlying items (2.2) (0.2)

Adjusted PAT 41.1 49.5

Weighted average number of shares 348,196,571 346,910,019

Weighted average number of dilutive share options 771,642 2,295,420

Weighted average number of shares for diluted

Earnings Per Share 348,968,213 349,205,439

Adjusted EPS 11.8p 14.3p

Adjusted Diluted EPS 11.8p 14.2p

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

FY26

£m

FY25

£m

Current Borrowings (including overdraft) 1.5 –

Non-Current Borrowings 83.8 74.0

Add back Debt Issue Costs 1.4 1.4

Gross Borrowings 86.7 75.4

Less cash (18.8) (16.5)

Net Debt (excluding leases) 67.9 58.9

Add back lease liabilities 123.2 110.4

Net Debt (including leases) 191.1 169.3

Leverage & 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 within 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 2026. As described in the financial review, 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.

180

Card Factory plc Annual Report and Accounts 2026

Financial position APMs continued

Leverage & Adjusted Leverage continued

Calculation of Leverage

FY26

£m

FY25

£m

Net Debt (as calculated on the previous page) (A) 67.9 58.9

EBITDA (as calculated on the previous page) (B) 116.8 127.5

IFRS 16 depreciation (37.3) (36.3)

IFRS 16 impairment (charge)/reversal (1.1) 0.4

Gains/(losses) on modification/disposal 0.7 (0.1)

IFRS 16 interest (8.7) (8.0)

EBITDA less rent costs (C) 70.4 83.5

Leverage (A/B) 0.6x 0.5x

Adjusted Leverage (A/C) 1.0x 0.7x

Cash flow APMs

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.

Adjusted Free Cash Flow excludes the impact of cash flows 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 and £3.3 million related to repayment of COVID Grant funds. No adjustments for

cash flows that are one-off in nature have occurred in FY26.

Calculation of Free Cash Flow

FY26

£m

FY25

£m

Net cash inflow from operating activities

(excluding transaction costs) 112.0 88.9

Less:

Capital Expenditure (19.4) (18.4)

Lease Payments (including Interest) (45.7) (45.6)

Net Finance Costs (6.2) ( 7.8)

Non-operating income – 0.7

Free Cash Flow 40.7 17. 8

Adjusted Free Cash Flow 40.7 28.8

Free Cash Conversion

Closest IFRS Equivalent: No equivalent; however, it is calculated with reference to Free cash

flow which is reconciled to Net cash inflow from operating activities in this section and

Adjusted Profit after Tax, which is reconciled to profit after tax in this section.

Free cash conversion is adjusted Free Cash Flow as defined divided by adjusted profit after tax

as defined in this section and expressed as a percentage.

Calculation of Free Cash Conversion

FY26

£m

FY25

£m

Adjusted Free Cash Flow 40.7 28.8

Adjusted profit after tax 41.1 49.5

Free Cash Conversion 98.9% 58.2%

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.

Strategic Report Governance Financial Statements

181

Company Information

ADVISERS AND CONTACTS

Corporate brokers

UBS Limited

5 Broadgate

London EC2M 2QS

Tel: 020 7567 8000

Investec Bank plc

2 Gresham Street

London EC2V 7QP

Tel: 020 7597 4000

Auditor

Forvis Mazars LLP

One St Peter’s Square

Manchester M2 3DE

Tel: 0161 238 9200

Principal bankers

National Westminster Bank plc

Leeds Corporate Office

3rd Floor

2 Whitehall Quay

Leeds LS1 4HR

Registrars

Equiniti Limited

Highdown House

Yeoman Way

Worthing

BN99 6DA

Tel: 0371 384 2030¹

Investor relations

Teneo

The Carter Building

11 Pilgrim Street

London EC4V 6RN

Tel: 020 7260 2700

Registered office

Century House

Brunel Road

Wakefield 41 Industrial Estate

Wakefield

West Yorkshire WF2 0XG

Company Registration No: 9002747

1. Lines are open 8.30am to 5.30pm (UK time),

MondaytoFriday, excluding English public holidays.

182

Card Factory plc Annual Report and Accounts 2026

Advisers and contacts

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CBP035902

Annual Report andAccounts 2026

Card Factory plc

Century House

Brunel Road

Wakefield 41 Industrial Estate

Wakefield West Yorkshire WF2 0XG