Card Factory Share Discussion Threads

[sparsam] 03/6/2020 08:57

I think when stores open people will bulk buy cards. Lots of condolence cards, re planned wedding days etc, bulk buy will happen as if there are queues which is likely then who wants a 2nd trip in the short term. Imo

[mallorca 9] 03/6/2020 08:45

Guy's,

my only advise to you is please read the conditions of the new banking covenants …

banking covenants now to be reviewed monthly … and … CARD MUST seek additional finance (placing) should the debt exceed 3 x EBIT - which it is about to.

This is all in yesterdays RNS.

[lastchance23] 03/6/2020 00:45

Ok shorters, time to clear things up for real investors.

FACT - every shop is facing this problem, every shop is adapting, read the trading update and provisions to increase basket value and convenience per shop to reduce frequency, if you buy more then less volume required. Secondly click and collect has been in the works for some time, my guess is they will be prepping orders and also creating bundles/packs to simplify shops. The online growth is not capped at the 275% they just made, this trend could continue, they have a second fulfilment centre and have revised strategy for global. Finally, as bonbon points out look at beaches many people don't care, this will survive and may thrive. If you think cards are gone, how come Captain Tom Moore got so many for his 100th!!!

The Invesco situation in my opinion, is just looking to safeguard its investment, it only sold a tiny portion yesterday together with the cumulative new price level, that is what these companies do, it is safe to reduce position as new levels are achieved. It owns 16%, even buffet doesn't usually buy more than 10% in a single stock DYOR.

[sbb1x] 02/6/2020 23:32

Invesco still have 16.39% to sell.The large distressed seller needs to clear.Let the trend be your friend and never swim against the tide Once they clear.... this moves up, but NOBODY KNOWS WHEN THERE DONE .when the large seller stopped in AA at 18p.... it went to - 29 in about 2 weeks Card should be higher and will be higher.Patience people.

[dave0011] 02/6/2020 21:58

boonboon…. if people are not allowed in stores in large volumes then the boom can't happen, a card shop selling mostly items of low value is not Ikea, I doubt 100's of people will queue to buy a card. They've already made it known they'll only open 10% of stores on 15th June, this means its far better for them to keep staff furloughed, ask yourself why? taxpayer funding their stores, things like that adon't go down with the general public, once the covid situation settles down people will look to blame anyone for the inevitable rise is taxes.

[boonboon] 02/6/2020 21:50

Have you seen the crowds at the beaches and the queues for IKEA? I expect a pent up shopping frenzy once the stores reopen.

[dave4545] 02/6/2020 20:19

dave0011

Spot on. I was made to wait outside my local sainsburys for 10 mins and there was only 3 people shopping in there with one on the till, painfully slow for us and for them it's going to affect them.

And I'm def avoiding the high streets for a good while and plenty of others will so cannot see them getting back to normal and things were pretty tough before covid

[paulof2] 02/6/2020 19:08

That’s a good point regarding people spending a lot of time in there once the stores open for small purchases.

My main issue here is people rave about the online growth but the online sales are absolutely nowhere near enough to prop up the business, in fact they could barely even prop up a few stores.

It’ll be tough times ahead for Card factory and i reckon this has bust written all over it. One of the unfortunate companies going into the crisis in a weak position with masses of debt that it is so reliant on mass footfall with small purchases that it simply will struggle to survive. If it does manage to cling on probably due to a large equity raise that would dilute existing shareholders massively.

Would not want to be a company with 1000 high street stores at the moment regardless of the industry in this climate. These shops are often in areas filled with people going picking up cards on their lunch break form work etc, how long before those numbers return to the past, and more importantly will they ever as companies move to embrace more working from home as standard?

Once the government support systems stop this is in deep deep trouble.

[dave0011] 02/6/2020 19:00

Card Factory have a real problem looming, high rents for prime position greetings card shops which over the coming months will be very limited in footfall, how can you get 2m or even 1m gap in a narrow card shop, worse still people tend to spend a long time in card shops choosing their purchases, this when mixed with low cost items is a very scary mix.
Can you imagine limiting these store to just 4 customers at any one time which could be a real possiblilty

[paulof2] 02/6/2020 18:32

Think if the market turns and starts going down again this could really struggle.

Some value may arise low 30s

[lastchance23] 02/6/2020 18:06

>>Mallorca don't bank all your chips on Invesco, they are a complex finance organisation, which had a big position. The only sink coming, is the kitchen sink when someone sees a value opportunity.

[mallorca 9] 02/6/2020 17:55

More sold by Investco.

This will sink very fast !

[nav_mike] 02/6/2020 16:40

Must admit I was surprised the auditors didnt take a hatchet to the carried value of goodwill given the uncertainty of future earnings

[phar lap] 02/6/2020 16:34

Comment on results in the small cap value report on Stockopedia.



Preliminary Results FY 01/2020

In normal circumstances, this share would look an astonishing bargain, being on a PER of only 2.5 times underlying basic EPS just reported, of 15.7p. However;

1) Covid. So profit this year FY 01/2021 are likely to be severely lower

2) Even before covid, the company was on a downward profit trajectory

3) The big one - debt. I was relaxed about the debt previously, but this is much more of a problem now that covid has caused a likely collapse in profits, with the shops being forced to shut.

Online trading has been strong since lockdown.

Re-opening strategy - planning to re-open c.10% of stores c.15 June. This is interesting, and it supports my hunch that many retailers would only open their most profitable sites whilst the furlough scheme is still paying staff wages, and acts as a major incentive to retailers to keep their less profitable sites closed, an unintended consequence.

Liquidity - it says borrowing facilities are enough, but I suspect an equity fundraising is looking a near certainty now. Banks seem happy to plug the gap, especially when Govt guarantees are available. But banks don't like taking on risk, hence extended bank facilities tend to come with pressure to raise fresh equity.

My opinion - it doesn't interest me at all now, due to the stretched balance sheet, which is likely to look grim once all the covid shutdown losses have been factored in. Shareholders should be braced for heavy dilution from a future equity raise. If it ends up being a distressed raise (like the one from Ted Baker (LON:TED) yesterday), then that could destroy a lot of the remaining shareholder value. It seems safest to steer clear of CARD, in my opinion. Obviously that's just an opinion, which could turn out to be right or wrong.

[lastchance23] 02/6/2020 15:51

Give investors 2-3days to contemplate, remember this has lost most of the institutional investors, it probably isn't in many etf's, so this is a baseline price. If someone sees potential in the global prospects in their renewed strategy we will see new levels, tempted to add a few, either today or morning.

[qs99] 02/6/2020 15:18

I do think Invesco may then try and sell into this strength which is odd when they appear to be a decent play IMO

[dave4545] 02/6/2020 14:55

Simple.

They have big seller Invesco

Results were not that great

100's of day traders in this on twitter who do not hold shares, bit obvious this would happen.

[rumobejo] 02/6/2020 10:31

The business has in place an existing £200m Revolving Credit Facility ("RCF") maturing in October 2023 with our commercial banks, who have remained supportive of the business during this period. Alongside the current bank facilities, the Bank of England have confirmed access to additional funding under the Covid Corporate Financing Facility ("CCFF").