Card Factory Share Discussion Threads

[iamkluless] 02/6/2021 14:13

Do we have any idea of when this rights issue may happen? Or even if management is still going ahead with it?

[aringadingding] 27/5/2021 20:13

Hi finkie... Healthy disagreement is all good with me. My rationales here for your assessment:

The latest trading update states the last 5 weeks were marginally down on the same weeks in 2019. For me given there is still a degree of social isolation in force, and that people are naturally cautious following a pandemic, that provides the explanation for the "slightly down" element. The year ended 31 Jan 2020 saw record revenue of £451m for the group, continuing a 5yr growth trend. So it's not "good" as in "knockout", but for me it's "good" as in "if trading simply returns to pre-pandemic levels this company is a value stock".

The management quality is more of a subjective thing but they look good to me. CEO effected change at Costcutter (not that much change is needed here, and should arguably be resisted). Chairman looks sensible and personable. CEO of Greggs as a non-exec. All makes sense to me.

[finkie] 27/5/2021 16:19

post 3118 because trading is good 'no' and management are high quality 'no' sorry but a couple of your assumptions are just that and plainly wrong.

[auguryinvesting] 27/5/2021 13:04

Investor long CARD checkout. I will be sharing my thoughts this weekend on our live members webinar 11:00 AM (EST).

AuguryResearch.com/card

[farrugia] 26/5/2021 08:08

i'm afraid that what happened at Revolution Bars Group today might well happen here. Institutions will demand a really depressed price to participate.

[muffster] 25/5/2021 18:57

One of the stand out quality metrics for Card Factory is that it passes 7 of the 9 financial tests in the Piotroski F-Score. The F-Score is a world-class accounting-based checklist for finding stocks with an improving financial health trend. A good F-Score suggests that the company has strong signs of quality.

[aringadingding] 25/5/2021 18:14

Yeah i think this is just a classic situation of the market being oversensitive to downside risk. Innate loss aversion. Fear is a more important factor than greed. To be fair to the market there is a greater risk of this company disappearing than nestle in the next 24 mths. I don't dispute that. But if this compang does not go bust, and i don't think it will, because trading is good and the management are high quality, then the time of the cash squeeze from a global mega pandemic will pass and in 5 yrs the shares will have gone up a lot. That's my forecast which i give to you for free and with the obvious disclaimer that i hold shares.

[porsche1945] 25/5/2021 17:37

What a pile of steaming shxte this company is, bailed out thank god, will stick to USD investments in the S&P/growth, dividend stocks are wealth destroying cxxp now, the ftse where it was in Dec 1999, sterling trashed, a covid brexit basket case, U.K. is uninvestable as far as I’m concerned.

[bbonsall] 25/5/2021 15:55

All the doom and gloom about raising £70 million. Why can’t They wait until a couple of good trading reports pushes the share price up and then dilution will be less? After the money is raised they will have less debt which is also positive.

[garycook] 25/5/2021 01:50

MM,s at work here driving the share price down.8,000 buyers to 3,000 sellers,but share price down 9% ???

[ken chung] 24/5/2021 09:28

Going down.Thanks for the wealth transfer. Lemmings and mushrooms only.

[bountyhunter] 23/5/2021 16:11

I guess they missed the bit in Friday's RNS about the potential £70m raise! I must confess I didn't pick up on that until I caught up with posts here. Primary Bid may be a possibility?

[wiseman1967] 23/5/2021 09:55

The Sunday Times has put a buy recommendation out on Card Factory describing it as consistently profitable.

[bbonsall] 21/5/2021 12:13

In normal times this company is highly cash generative. If not paying dividends and business returns to near normal they will generate cash that can pay down the debts quite quickly.
They said that the first five weeks were only marginally less than the same period in 2019. That was without the more recent opening up of shops in Scotland, Ireland and the Eire.

[fenners66] 21/5/2021 09:28

bbonsall "we cannot state the percentage dilution that £70 milliion represents."

Of course , but investing is all about forecasting the future , not waiting for it to happen and reacting.

Looks like the dilution just got a lot worse this morning.

Wiseman "It is surprising that a rights issue price was not set before making this announcement"

Absolutely agree. So was this management ineptitude or have they tried running the idea past major shareholders already and been knocked back ?

Those same major shareholders , with any sense , could probably smell blood.
Let the share price slide this morning , sell some and help the slide , knowing that they will get a larger slice of the company for the same £70m later....

[aringadingding] 21/5/2021 09:28

Call it 125. So 467m shares. Pre crisis profit of £66m would be eps of 13.9p and a share price of 80p is 5.7x PE... so a value purchase one might say. I guess the differentiator with clintons is card factory is all about the lower price point? I would prefer long term debt to be more like 1.5x ebitda than 2.5x, but seems they have a chance to get back on their feet here if trading growth continues.

[wiseman1967] 21/5/2021 08:50

It is surprising that a rights issue price was not set before making this announcement. Share price is already down 15% and rights issues tend to be done at 25-33% below prevailing share price so this would make a dilution higher than it need be. If gross proceeds of 75m gbp are needed, then assuming a price of 50p or 60p would require between 125 - 150m new shares on top of existing shares of 342m.

[barkypoo] 21/5/2021 08:40

Well Darcy was at the helm when Clintons went down so has form. This sadly feels like a business which is not bouncing back post Covid and where equity holders are now expected to hand £70m over to the banks. Never a good idea to invest in a repay banks rather than invest for growth scenario. Can see the shares slipping to low 60s and any rights issue will be around 40p so big dilution coming

[bbonsall] 21/5/2021 08:36

They are going to wait before the fundraising. The actual dilution will depend on the prevailing share price at the time of the fundraising. So we cannot state the percentage dilution that £70 milliion represents.

[crazi] 21/5/2021 07:42

I reckon about 30% dilution as there will be large fees to pay for raising the equity as well. Then they have also cancelled any dividends...

It's good they have secured better credit facilities but the above 2 points makes me very cautious for now...

[fenners66] 21/5/2021 07:22

£70m fundraise on the way or else penalty interest and charges due.
About 25% of current equity so a 20% dilution ?

Online sales have already dipped

[ken chung] 13/5/2021 12:08

Cases of vaccine resistant Indian Covid variant now doubling every week in the UK. Visit a shop, catch Covid, spread Covid. No thank you! Lemmings and mushrooms only.

[makinbuks] 11/5/2021 12:47

Yes, very welcome on a day like today