Card Factory Share Discussion Threads

[simmsc] 15/8/2021 19:00

Most likely. It would seem unusual for any director to buy shares (if an equity raise was likely). Good to hear that you had a good experience buying from card! Happy costumers usually leads to happy investors :--)

[bbonsall] 15/8/2021 18:36

Simmsc
That could be what prompted Darcy to buy 50000 shares recently.

[bbonsall] 15/8/2021 18:34

Incidentally, I used the Card Factory website on Wednesday for the first time. I created a personalised birthday card for my daughter’s birthday. It was efficient and easy, it cost £3.25 including first class post. The price is what you would pay at any other card shop for a standard card.
It arrived on Friday and I am very pleased, it is of excellent quality.

[simmsc] 15/8/2021 16:04

Spot on bbonsall. If they don't need to raise any new equity we can expect a strong rerating of the stock, because an equity raise seems to mostly already be priced in. It would be a double whammy in 1 go if this happens:- confirmation of recovery (rerate part 1)- confirmation of no dilution (rerate part 2)It would be pretty substantial from the level that we are now.

[bbonsall] 15/8/2021 09:59

“Furthermore, the Group must use best efforts to raise GBP70m net equity by July 22, or alternatively to prepay GBP70m using funding from other subordinated sources”

This is a direct quote from the June financial statement.
It is clear thar CARD is not committed to a rights issue as the market fears. It was not a strange way of announcing a rights issue, as one poster asserted above.
I believe that the alternative to a rights issue is the preferred route.

[tradertrev] 12/8/2021 11:38

Most likely outcome in my view is that once the recovery becomes more evident in the results, the company will have considerable optionality over this intention to raise £70m of equity. It seems likely that they won't need to raise the full £70m to keep the banks happy, and when that becomes clear they will be able to raise such smaller amount at a significantly higher share price than currently (if at all), with correspondingly much less dilution than currently perceived.
That's what my very recent investment in three tranches was based on anyway.
Fund managers (and short term traders) lack the vision to see beyond the statement about best efforts to raise £70m, perhaps believing they will have the upper hand in upcoming pricing negotiations. When the company is back on the front foot, it will have the upper hand. If the advisers would only respect pre-emption rights the fund managers wanting to get involved would have to buy in the market first, but that's a whole 'nother story!

[bountyhunter] 12/8/2021 07:59

Very strong 4.8% GDP growth April to June reported this morning including retail.

[warrenbuffet73] 11/8/2021 19:00

Why do shorters wish the worst on uk companies who employ good people. Scumbags. Stick to the bookies

[scepticalinvestor] 11/8/2021 18:30

Why do punters buy into bargepole, highly leveraged stocks like this? Great for shorting but not much else...

[makinbuks] 11/8/2021 18:22

You're point is mathematically correct and accepted. However, paying a dividend greater than EPS is not sustainable and the rights issue would not be at 60p, it would be more like 40p. I would also point out, that if you take up your rights you are not diluted and the capital you inject replaces debt so there is a saving in interest costs and fees to factor into your EPS calculation too.

It is my experience that management that acts swiftly and decisively to fix an issue, even if that is unpalatable at the time pays dividends more quickly that a management that dithers, discusses the pros and cons of what might happen and is very often overtaken by events

[aringadingding] 11/8/2021 11:45

Agreed, good post simmsc

2017 and 2018 were quite similar years to each other, bringing ABOUT £60m in Net Income and £80m in dividends paid.

June 2021 voting rights is 342m. Raising £70m at 60p would entail issue of 116m shares or total of 458m shares after the hypothetical fundraise.

So at present, a return to those 2017/8 total profit/dividend levels would imply:
17.5p EPS or 3.4x PE at 60p per share; 23p dividend per share or 38% dividend yield.

Or after that hypothetical fundraise:
13p EPS or 4.6x PE at 60p per share; 17.4p dividend per share or 29% dividend yield.

I realise that is very simplistic and there are probably lots of things wrong with that analysis. Feel free to let me know what, specifically, you think is wrong with it - were those dividends in 2017/8 temporary cash return in some way?

But: 1) a return to pre-pandemic situation is reasonable assumption and 2) cutting down the above numbers to some extent would be ok given they are so good.

[simmsc] 11/8/2021 09:43

I don't think they are being indecisive. The bank wants them to do the raise, but they feel they can go without a raise. The way it was worded was to a) please the bank that they will do it (if they need to) and b) send us the shareholders a signal that they think they can go without the raise. In the short term it has caused uncertainty, but in the long term likely to bring us shareholders bigger gains (due to lack of dilution)

[warrenbuffet73] 11/8/2021 09:06

Agreed, it’s the most odd way to announce a rights issue

[makinbuks] 11/8/2021 08:59

I think they've been indecisive and are being punished for it. If they'd gone for the rights issue early they would have had their £70m and would now be on the rise

[warrenbuffet73] 10/8/2021 20:08

That’s the problem. If Card grows its was out of this (and it has proved it can time after time in the past it’s cash generative) this will fly

[bbonsall] 10/8/2021 19:56

I think the share price is being held back for fear of a rights issue to raise £70million to clear some debt. The truth is that if CARD can trade well in the next few months it may not need a rights issue because it is very cash generative and could easily generate its own cash for repayment.

[warrenbuffet73] 10/8/2021 07:24

Every shop I go in the staff say they’ve never been busier so that must bode well. In addition people will be buying card factory concession cards in Aldi and Matalan now too. When this takes off it really will re rate to 90p quite quickly I think

[renewed1] 23/7/2021 09:00

The real win is if he came back and merged the two companies. synergies enormous.

[roxburyhouse] 22/7/2021 21:41

Is this the main board for the Card Factory?

Seems very quiet?

Anyhow here is a copy of what I posted earlier on the Lse chat and wondered what you guys thought?


As most here will know, Dean Hoyle and his wife are the founders of the Card a factory.

He is currently the chairman of The Works but as per the latest RNS a couple of days ago (copied below) he has handed his notice in and leaves in September.

Nobody knows where is is going but wouldn’t it be just great if he came back to CARD.

Look at his job description. Perfect.

“Following seven years' involvement with The Works, Dean Hoyle has notified the Board that he intends to step down as Chairman following the Company's AGM in September 2021. During his time as Chairman, The Works has undergone significant growth, including the opening of over 200 new stores and the development of our profitable online store and multi-channel offering. “

[wiseman1967] 06/7/2021 22:16

For the non observant amongst you - Darcy is a guy...even Tommy would have spotted that!

[bountyhunter] 06/7/2021 19:56

That's probably what Roger Daltry & co were thinking of... 😉

[casholaa] 06/7/2021 19:47

Surely, that should be the Lambada variant