Card Factory Share Discussion Threads

[montyhedge] 22/9/2014 17:24

To much competition, for me on this one trick pony.

[gohilster] 22/9/2014 16:47

Roller coaster day! But took the opportunity to add bb2, and reassured by the blue finish on a very red day!

[gohilster] 22/9/2014 07:43

Thanks bb2! Tempted to top up also. Christmas trading should be excellent and the management clearly have a good record of delivering growth and results. Nice dividend too due to high cash generation. Happy holder.

[battlebus2] 19/9/2014 12:20

Card Factory makes its debut
It's important not to read too much into Card Factory's (CARD) reported pre-tax loss. That's because £22.8m of exceptional charges relating to the value retailer's IPO in May, as well as borrowing costs that eased as the balance sheet was restructured by the listing, skewed the bottom line in the first half.

It's more meaningful to look at underlying operating profit, which jumped 9 per cent to £26.1m on like-for-like sales growth of nearly 3 per cent. Chief executive Richard Hayes told us new merchandising, improved product quality and ranges, and market share gains from maturing stores had all contributed to the strong like-for-like growth. Meanwhile, store openings boosted sales further, with 37 opened in the half year, bringing the total to 749. Card Factory has launched 50 stores a year over the past decade, and Mr Hayes said this year would be no exception. The group's online portal, gettingpersonal.co.uk, is gathering momentum, too. Sales there rose by 16 per cent to £5.5m, while cash profits more than doubled to £0.8m.

The business model is vertically integrated, so almost everything that Card Factory sells is designed in house. That means it can deliver some of the best operating margins in the sector. In the first half, margins were maintained at 17.5 per cent, but they're typically higher in the second half as a result of the Christmas trading period, so the full-year margin tends to hover around the 22 per cent mark. Mr Hayes says there's also a huge focus on cost control and efficiency in areas such as the supply chain, employee costs and rent negotiations with landlords. "The vertically integrated model we operate enables us to minimise costs and maximise margins," he explained.

The business is very cash generative and will announce a maiden dividend when it reports full-year results. Investec expects pre-tax profit of £73.2m for the full year, giving EPS of 16p.

CARD FACTORY (CARD)
ORD PRICE: 215p MARKET VALUE: £733m
TOUCH: 214-216p 12-MONTH HIGH: 225p LOW: 196p
DIVIDEND YIELD: nil PE RATIO: 51
NET ASSET VALUE: 69p* NET DEBT: 61%
Half-year to 31 Jul Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2013 137.2 3.7 1.1 na
2014 149.4 -7.9 -2.2 0
% change +9 - - -
Ex-div: na

Payment: na

*Includes intangible assets of £331m, or 97p a share

IC VIEW:
Card Factory's shares have slipped below their 225p IPO price, which was itself at the bottom of the initial range, to trade on 13 times forward earnings. Yet the business has a proven track record, some of the highest margins in the industry, plans to pay a decent dividend - based on the current price, the shares are due to yield 3.1 per cent - and a big store roll-out programme. The market could be undervaluing the stock, so we initiate coverage with a buy.

[battlebus2] 19/9/2014 12:16

Lots of buying today including a few more for myself :))

[battlebus2] 18/9/2014 07:38

Still reading through olded, i'm happy with steady growth.

[olded] 18/9/2014 07:29

All looks very positive to me and the business continues to perform strongly. More growth to come as they expand and increase their online offering. Dividend should be decent too. What are your thoughts bb2?

[battlebus2] 18/9/2014 07:14

Revenues up 8.9% to £149.4m (H1 FY14: £137.2m)

· Like-for-like (LFL) sales up +2.6% (H1 FY14: +3.3%) (see Note 2)

· Underlying operating profit growth of 9.3% to £26.1m (H1 FY14: £23.9m)

· Underlying EBITDA growth of 10.1% to £30.2m (H1 FY14: £27.5m)

· Underlying LTM EBITDA increased to £83.1m, being EBITDA for the twelve months ended 31 July 2014

· Leverage reduced to less than 1.8x underlying LTM EBITDA



Note

Underlying profit figures exclude costs relating to the IPO, the senior debt refinancing and mark-to-market movements on derivatives not designated as a hedging relationship.


Statutory results

· Statutory loss before tax of £7.9m (H1 FY14: profit of £3.7m) reflects £22.8m of non-underlying expenses principally relating to charges associated with the IPO and senior debt refinancing (H1 FY14: non-underlying income of £1.9m)

· Total reported net debt reduced significantly to £144.2m (H1 FY14: £368.7m), being net debt of £146.7m (H1 FY14 £372.9m) less debt costs capitalised of £2.5m (H1 FY14: £4.2m), again reflecting the IPO and senior debt refinancing transactions

[exbroker] 17/9/2014 11:51

A few small sellers of the Indexing stock about today, with the Jocks voting Thursday the trackers are sitting on their hands till Friday, they are benchmarked against the closing price.

[olded] 11/9/2014 14:52

A nice push and settle above 220p would be a very bullish signal. Definitely trying, even on a red day like today!

[olded] 11/9/2014 14:52

A nice push and settle above 220p would be a very bullish signal. Definitely trying, even on a red day like today!

[dixies] 11/9/2014 13:40

Interim's due 18th Sep.

[battlebus2] 11/9/2014 12:15

New highs again with results due anytime this month.

[battlebus2] 10/9/2014 14:26

New highs today :))

[olded] 08/9/2014 17:30

Reassuringly steady despite market being heavily in the red today.

[battlebus2] 28/8/2014 17:41

Joined you today exbroker, good timing I hope.

[johnthespacer] 26/8/2014 17:49

I think the market is made by the price of their goods people don't take long to become customers when they can get a card for 89p instead of 1.99 or more....I suppose the supermarkets are competition too for the fact that one shop gets the groceries and the cards sorted..

[edwardt] 22/8/2014 15:32

interested in this one - looks like a good business model. anyone got any views on how they can take market share from the competition?

[exbroker] 08/8/2014 19:24

Hi John
I have just bought a few, I fancy a bit of a bounce after the figures and into the index inclusion in September, they look st for the 250 Index but I will confirm nearer the date when the market caps have settled down a bit, its a game of many variables!!

[johnthespacer] 30/7/2014 07:02

Card Factory also own this website



It is an online shop for personalised gifts

[johnthespacer] 29/7/2014 09:57

Hello all!

Just thought I would create a Thread to discuss all things Card Factory...

I have bought in to see how it goes based on their year on year Growth as can be seen on the investors website above.

Thanks

[johnthespacer] 29/7/2014 09:54

Their Investors Website is



Their Retail website is

[hydrus] 24/5/2014 09:17

Anybody have broker forecasts for card? Also an idea of what the yield is likely to be?