Acquisition of S A Greetings

Acquisition of S A Greetings

Released : 25 Apr 2023

25 April 2023

Card Factory plc

("Card Factory")

Acquisition of South Africa Greetings

Card Factory, the UK's leading specialist retailer of greeting cards, gifts and celebration essentials, is pleased to announce that it has acquired the entire issued share capital of SA Greetings Corporation (Pty) Ltd and its subsidiaries, which trade as SA Greetings, for £2.5m, which has been paid in cash.

SA Greetings is the leading wholesaler of greeting cards and gift packaging in South Africa.  It also operates 24 'Cardies' retail stores, with four further stores operated by franchisees, and owns and operates a roll-wrap production facility. Its head office and main warehouse are located in Johannesburg, with sales offices in Durban and Cape Town.  

The acquisition was financed from Card Factory's working capital and is expected to be earnings enhancing. SA Greetings realised an EBITDA of £591,000 (unaudited), and a PBT of £165,000 from net sales of £9.4m (unaudited) during the 12 months to 28 February 2023 and had a net asset value of £5.8m and gross assets of £8.5m on this date.  (Exchange rate applied:  20 ZAR to 1 GBP 1).

South Africa is one of the target territories for Card Factory's partnership expansion. The acquisition of SA Greetings, supports this strategic growth pillar by providing access to key wholesale accounts through the company's printing, merchandising and warehousing capacity.

Darcy Willson-Rymer, Chief Executive Officer, commented:

"We are delighted to have completed the acquisition of SA Greetings and look forward to working with our new colleagues. Under the continued leadership of SA Greetings MD, Willie Engelbrecht, we will closely collaborate to further enhance and develop opportunities for the Card Factory and SA Greetings businesses. 

SA Greetings brings with it significant experience operating a wholesale business, which can inform and support development of our retail partnership business, and is entirely aligned with Card Factory's strategic plan for international expansion.  As well as giving us a foothold into our target South African market, we will also be using their mature printing, merchandising and warehousing facilities to understand how we can deliver similar local capability in other target markets."

Enquiries

Card Factory plc                                                                        via Teneo (below)

Darcy Willson-Rymer, Chief Executive Officer

Simon Comer, Interim Chief Financial Officer

Teneo                                                                                           +44 (0) 207 353 4200

James Macey White / Jo Blackshaw                                             [email protected]