Card Factory Share Discussion Threads

[mallorca 9] 27/7/2020 10:39

From RNS dated 2nd June .....

'Given the recent announcements by the Government we are planning to open 10% of our stores around the 15(th) June, ensuring that we are compliant with the requirements for "Covid-Secure" to enable us to test trading under these new conditions'.

Nothing new has been announced since the above. Currently circa 90% of stores are closed with their staff on Furlough.

The Furlough scheme is the only thing propping this up.

[fenners66] 27/7/2020 09:11

"lastchance23
27 Jul '20 - 04:33 - 2655 of 2655

Fenners66<< I distinctly remember the 2m saving comment on debt interest, I would of used the news updates on HL, it is on one of them on right tab."

I genuinely don't recognise the £2m comment , first you said it was in one of Karen's announcements, so I re-read them, now you say it could be in a HL news feed.

So is it an official RNS or not ?
Can you reproduce?

As far as saying that there are other companies struggling - I have not mentioned going concern, you just did - I have mentioned the specific New Covenant tests being applied here - whether or not others are struggling it changes nothing about the covenant tests applied here.

We have been discussing this for a while

What that does do however is add pressure to the lenders. They know as we do that if CV shutdowns etc continue there will be fallout for them , so they will not sit on their hands.

My contention has been since CF covenant tests have changed ; both by test and by frequency ; from 6 months to monthly, after 4,5,6... months of zero profit that rolling 12 month EBITDA test gets worse.

You think they are happy to move from a 6 month test to monthly?
Do you know what work and added worry that is for the BOD?
Why did they agree?
Because they were over a barrel , they had no choice.

As I said IF the test is debt to EBITDA the ratio doubles once they get to 6 months without any profit , or earlier if those 6 months are a loss, then failing the test comes over the horizon very quickly.

The good thing about that point is - it's maths.
It's not warm fuzzy words or we think this or that... its in the maths.

I walked past the nearby shop again Sat morning 2 customers one way , none the other.....

"the risk is baked into the share price "

we have been discussing this for weeks - you thought the risk was baked into the share price , then , in the 50's now we are around 40.

Its the impact of the rolling EBITDA test, is it rapidly getting worse ?

[lastchance23] 27/7/2020 04:33

Fenners66<< I distinctly remember the 2m saving comment on debt interest, I would of used the news updates on HL, it is on one of them on right tab. Regarding the covenants, apart from having revised covenants, and revised debt financing, and additional covid liquidity options; I have seen several businesses have their covenants waived through this covid situation. Also regarding your going concern comment, this is on nearly half the ftse at the moment, they are all issuing warnings; should card need funding, they have further options, and there are many more steps, and plenty more time, most of the risk is baked into the share price

Mallorca<< It is apparent you just think high street, so its bust...The high street is changing, but if it gets to the point of multiple types of store closure, then it reduces footfall to the other entities such as coffee shops, restaurants, cinemas, clubs, bowling alleys, gyms etc. I feel they will do their best to support businesses like card, because with a rescaling of commercial property from more home working, they are going to want to occupy the space. Long term landlords will also know there is not likely to be a queue of replacement tenants, so you have to take a balanced viewpoint, that under these circumstances businesses that were profitable prior to covid will for the most part be given some room to manouvere. I do feel the online presence does make a difference, and I believe banks will look at the business as a whole in terms of future financing. Restructure and some store closures are possible, but I think they should focus on the most profitable stores in major locations anyway.

On a separate matter got an email about free delivery on personalised cards, not sure what cost is, but I'm guessing they've done a deal with royal mail.

[pioneer2222] 26/7/2020 22:23

Nearly all of the shops are open, add that to the long list of things you have got wrong. Honestly mate you have something wrong with you. I used to work at their HO and my mum runs one of the stores, and for you to wish or hope they fall into administration is awful you're an awful human being. Secondly you're deluded to think any of your comments do anything to the share price.

[hardupfedup] 25/7/2020 14:32

how do you get to 90 % stores closed --- absolute twaddle

[monte1] 25/7/2020 11:53

mally

That is simply not true - virtually all Card stores are open and trading.

Quite what level of trade they are experiencing is a different question, but they are open for business.

[mallorca 9] 25/7/2020 11:22

Tuesday will be very interesting.

I believe that circa 90% of the stores are still closed with wages for those stores being met by the Governments Furlough Scheme.

I doubt whether CARD could currently afford to open those stores and take on the wage bill.
I'm expecting therefore that they will announce that those stores will remain closed until end October.
Lease costs are still accruing however with very little income.
Once we reach end October and the Furlough scheme ends then it's very difficult to see the business being able to operate .

Re raising funds , which the covenants also require if possible, I am not sure that they would get a placing away.

The Directors have to fulfil their legal obligations and I am therefore expecting that Tuesday's update will include warnings as to the Companies ability to continue.

This business was tipped as a short before COVID.
I'll be surprised if there is not a significant mark down in the share price on Tuesday.

Lastchance, you seem to be consoling yourself in that other retailers are also struggling. Begs the question - why would you go long on anything in retail (except perhaps the likes of Amazon). The whole sector is dying. CARD will be one of the 1st to completely disappear though.

[fenners66] 24/7/2020 13:47

lastchance - read through the Covid update and have got most of the way through the preliminary year end accounts... still not found your £2m a month comment , can you help please ?

Did find this though:-

"Based on the above indications the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. However, this material uncertainty, may cast significant doubt on the Group and Company's ability to continue as a going concern and therefore to realise its assets and discharge its liabilities in the normal course of business. "

[lastchance23] 24/7/2020 12:04

fenners66<< In one of Karen's last trading statements she stated they had strong liquidity to cover covid and were saving £2m in debt interest payments a month. Unfortunately Mallorca lives off smarties and skittles so the high E numbers lead to ADHD and he is unable to use a calculator and factor this into his trade.

Mallorca<< How many times do you need to be told... the market is the market, if gains are wiped out because of the market it is not the business. Look at M&S, The works, WH smiths etc, a sector pullback.

I am not young, or old, but somewhere in between; I bought silver about 18 months ago when everyone was buying gold, had idiots tell me fools gold, poor mans gold, right now I don't look so foolish...

[fenners66] 24/7/2020 01:46

I looked in on the local shop yesterday about 4.00pm - there were 2 customers at one stage, but there where none on my first trip past.

Maybe they would be light this time of year.... but this store must be losing money at the moment.

Lastchance could you explain your "save £2million a month in interest" comment please ?

[hardupfedup] 23/7/2020 16:00

have they got a new website -- had an email to say need to make new acct ?

[mallorca 9] 23/7/2020 13:44

Oh dear,

I guess that it's all going to plan for 'Lastchance'

[stevieb2190] 23/7/2020 13:25

I went into a large branch this morning..3 staff pratting about and 3 gloomy looking customers, this shop would struggle at 50% rent...i am amazed that people keep saying theres value and the fundamentals look good...rubbish...forget anything about pre covid fundamentals, they have gone for good..as i ssid way way before covid the crazy opening policy was just trying to cover the imminent problems..

[mallorca 9] 23/7/2020 12:23

Dear oh dear oh dear - bring on Dooms Day.

Let's guess ,

stores to stay closed.
Attempted fund raising diluting share price to 5p

Dear oh dear oh dear

[mallorca 9] 23/7/2020 11:50

Just sell !!

Lot's of other recovery stocks out there ... BOO

[1novice] 23/7/2020 11:37

We have 5 in a 3 mile radius of town.
The two on the high st have 3 staff each and in the last hour had 15 customers between them. How do I know? I sat watching

[mallorca 9] 23/7/2020 11:35

Dear oh dear oh dear


It's Dooomed Mr Mainwaring

[mallorca 9] 23/7/2020 11:28

Dear oh dear !

[mallorca 9] 23/7/2020 09:49

We're Dooomed Capt Mainwaring , Dooomed

[fenners66] 23/7/2020 09:16

"there are House of Fraser stores paying no rent but still losing money and that a business rates correction could dramatically change the situation in terms of saving stores. However with yesterday's announcement, Frasers Group will again have to carefully review the viability of a number of stores within its portfolio. "

Frasers albeit biased take on rates - says that even with no rent stores losing money.....