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