 5 December 2024
Card Factory plc ("cardfactory")
cardfactory to enter the US with the acquisition of Garven Holdings, LLC.
Entry into biggest global celebration occasions market marks an important milestone in international growth ambitions.
cardfactory, the UK's leading specialist retailer of greeting cards, gifts and celebration essentials, today announces that it has acquired the entire issued share capital of Garven Holdings, LLC and its subsidiaries ("Garven"). Garven trades as Garven Design and Cadence Packaging and is a leader in the design and wholesale of gifts and celebration essentials, based in Minnesota, USA.
Strategic Rationale
In line with cardfactory's growth plan, this acquisition accelerates our partnerships strategy in one of our key international target markets. It marks cardfactory's physical entry into the US gifts and celebration essentials market, which represents the biggest market globally at circa £70 billion in total.
Garven has an established customer base of general and speciality retailers which will allow cardfactory to further explore design and buying synergies, alongside opportunities to introduce its own ranges into the US wholesale market.
Chief Operating Officer, Anne Schulze and Chief Financial Officer, Walter Jungbauer will continue to manage the Garven business.
Financial Consideration
The acquisition price of $25 million on a cash/debt free basis (subject to customary closing adjustments) was paid in cash at Completion on 4 December 2024 and implies an EV/EBITDA multiple of c.5x. The transaction has been funded from cardfactory's existing cash and debt facilities and the Company's leverage position remains comfortably below our target maximum of 1.5x. Based on current sales, the acquisition represents around 5% of cardfactory's revenue, with negligible benefit to be realised in the remainder of FY25.
Trading Update
Trading in the second half to date has been in line with our expectations and we have been encouraged by the start of the Christmas season. Our programme of productivity and efficiency savings, as announced at our Interim results in September 2024, also remains on track. Our expectations for the full year are unchanged, albeit we are yet to trade through the peak Christmas trading period. We will provide a further update to the market in our January trading statement which is scheduled for 14 January 2025. |
Expect the US partnership news imminently. FWIW. |
Gaining momentum now, could be a nice run to the next news. |
Christmas is coming – 3 retail shares ideas to benefit
Card Factory specialises in greeting cards and gifts, with around 1,000 stores across the UK and Republic of Ireland.
The second half of the financial year, which includes Christmas, usually accounts for the majority of its annual profit. This year, it's even more significant.
A quick look at recent performance shows a fall in profit at the half-year mark, and the valuation took a hit. But weaker performance was already expected, as management had guided towards more weight in the second half, even before the results.
The important thing is that there's been no change in their full-year guidance, which signals confidence from management, and we think some positives have been overlooked.
But with a recently expanded product range and a new model to drive store efficiencies, preparations are well underway for the Christmas rush.
Card Factory produces nearly all of its single greeting cards in-house, which means it can control quality and cost. This vertical integration is a big selling point.
Card Factory's average card sells for just £1.21, well below the market average, making it a price leader.
There are growth opportunities too.
In the UK, Card Factory has less than a 4% share of a £13.4bn market for greeting cards and celebration essentials, so there's room to grow locally. But the real growth story lies internationally where it's exploring promising markets like the US, which has a £4.5bn greeting card market.
Taking a step back, the business took a hit during the pandemic, but its recovery has been impressive, with a strong balance sheet and a disciplined approach to distributions.
The key risks are competition in the online space from more premium rivals like Moonpig, which is still a small part of Card Factory's business. The UK card market itself is also mature, so they need to either gain market share or expand overseas to drive growth, neither of which is easy. |
Favourable Signals For Card Factory: Numerous Insiders Acquired Stock
editorial-team@simplywallst.com (Simply Wall St)
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Card Factory plc's (LON:CARD) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Card Factory
Card Factory Insider Transactions Over The Last Year
The CEO & Executive Director Darcy Willson-Rymer made the biggest insider purchase in the last 12 months. That single transaction was for UK£90k worth of shares at a price of UK£0.97 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.89). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. |
After a lot of research, I will be increasing my holding of CARD shares on Monday morning. |
Closing report from II:
Retail was also in focus on Black Friday, a key day for the sector. Berenberg kicked off coverage of Next at 'buy', but adopted a less bullish view of Marks & Spencer, beginning at 'hold'.
Next rose 2.2%, while M&S shed 0.4%.
Berenberg reinitiated athleisure retailer JD Sports at 'buy', although its shares fell 1.2%.
JD was also in Berenberg's top consumer picks for 2025, joined by value retailer B&M, card and gifts seller, Card Factory, electrical retailer Currys and home furnishings firm Dunelm.
B&M was 1.1% higher, Card Factory 3.4% higher, Currys 0.2% higher and Dunelm 0.9% higher. |
The above from a Berenberg research note out today |
Berenberg's top picks for 2025 are B&M, Card Factory, Curry's, Dunelm, JD Sports and Warpaint, stocks which the broker said offer growth, yield or value - or a combination of all three. |
The handle should only go to either 86p or 83p if it breaks though that. |
on the way down it needed 7 days around 90p. so similar could be expected
good sign is that today it went down on low vol |
The cup does have a bit of a lip on it.
I'd prefer to view it as a reverse head and shoulders ;) |
Yeah, how far down the handle is it going to go though.........back to sub 80? |
Short
Marshall Wace Llp 0.58% -0.11% 26 Nov 2024 closed a little |
And…..we cannot even hold 90p ! |
I think 120p area is a natural test point next. Way over sold, should zip back up to equilibrium area. |
Bought the FD... T1=90p |
If the current upturn continues we could well be. |
+ive indicators. BTFD. Bowl! |
Four weeks until Christmas, get your cards. will we be back to a £1 by then? |
gooooooooooo go go
dance for me |
By the way "TRADES" in the header takes you directly to the list of trades. I agree that buys and sells are often listed incorrectly especially when delayed, as there is an unintelligent algorithm behind the scenes, not very clever AI? 😉 |
Often the sells and buys are mixed up.I have sometimes deliberately bought anOdd number of shares exemple 5341 so i can see my buys on the list and somtimes they are listed as sells |
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